Ajay Kumar Mittal, J. - (1.) IN this appeal filed under section 260A of the Income -tax Act, 1961 (in short "the Act"), at the instance of the Revenue it has been submitted that the following substantial question of law arises in this appeal for the consideration of this court, from the order of the Income -tax Appellate Tribunal, Chandigarh Bench, "B" Chandigarh (for brevity, "the Tribunal") passed on February 5, 2003, in I.T.S.S. No. 19/ CHANDI/2008 for the block period April 1, 1998, to February 5, 2003 : Whether, on the facts and in law, the Hon'ble Income -tax Appellate Tribunal was justified in holding the recording of satisfaction under section 158BD by the Assessing Officer of the person searched and consequent issuance of notice under section 158BD on September 2, 2005 was belated and beyond the period prescribed by law when section 158BD read with section 158BE does not specify that satisfaction has to be recorded by the Assessing Officer before completion of assessment under section 158BC of the Income -tax Act, 1961 ?
(2.) BRIEFLY , the facts may be noticed. The assessee, an individual, is carrying on business of manufacturing hosiery goods in the name and style of "M/s. Dhruv Fabrics." Search operations under section 132(1) of the Act were carried out against Shti S. K. Bhatia, a yarn dealer, on February 5, 2003, and certain loose papers were seized. A notice under section 158BD of the Act was issued to the assessee on September 2, 2005, which was served on her on September 8, 2005. The assessee filed a return for the block period from April 1, .998, to February 5, 2003, wherein the undisclosed income was declared at nil. Survey was conducted at the premises of the assessee on February 19' 2003, wherein she surrendered Rs. 2.75 crores. The assessee had claimed that the unaccounted transactions with the Bhatia group were covered in the surrender made on February 19, 2003. The Assessing Officer did not accept this and finalized the assessment on September 28, 2007, at undisclosed income of Rs. 91,96,083 under section 158BC read with section 158BD of the Act. The assessee feeling dissatisfied preferred an appeal to the Commissioner of Income -tax (Appeals) (in short "the CIT(A)"). The appellate authority accepting the contention of the assessee, deleted the addition, vide order dated June 30, 2008. The Revenues appeal to the Tribunal was dismissed by accepting the preliminary plea of the assessee that assumption of jurisdiction under section 158BD of the Act by the Assessing Officer was not valid as the Assessing Officer of the person searched, while framing block assessment under section 158BC in the case of S. K. Bhatias group was required to record his satisfaction that undisclosed income discovered, belonged to some person other than the person searched. The block assessment in the case of S. K. Bhatias group was finalized under section 158BC on March 30, 2005, and the satisfaction recorded to initiate action under section 158BD of the Act against the assessee was on July 15, 2005, which was clearly beyond time envisaged by the aforesaid provisions. Hence, this appeal.
(3.) THE point for consideration in this appeal is, whether initiation of proceedings under section 158BD of the Act, by recording satisfaction on July 15, 2005, and issuing a notice dated September 2, 2005, which was served on the assessee on September 8, 2005, was valid when the block assessment against the person searched had been finalized under section 158BC of the Act on March 30, 2005.;