Judgment:
1. This appeal by the assessee is against the order of CIT(A), Bhopal.
The first five grounds revolves around one issue i.e., maintainability of appeal before the CIT(A). The brief facts of the case are that a search under Section 132 was carried out on the residential premises of Shri Paresh Agrawal, M.D. of M/s. Sul (India) Ltd. on 2-2-1996. During search proceedings, a diary was seized from the residence which was marked as Annexure 'A/1'. From the said diary, it appears that the appellant-company had suppressed production of DOC and, therefore, it was inferred that income by the company was concealed during assessment year 1995-96. A notice under Section 158BD read with Section 158BC was accordingly issued to the appellant-company on 26-3-1997. The Assessing Officer finally passed an order under Section 158BD read with Section 158BC determining the income of appellant for the block period from 1986-87 to 1995-96 and from 1-4-1995 to 2-2-1996 at Rs. 7,23,222. The appeal was dismissed by CIT(A) on the ground that search under Section 132 was conducted on 2-2-1996 and, therefore, first appeal against the order under Section 158BC lies before ITAT.2. Before us, the ld. A.R. of the assessec, Mr. M. Mehta, contended that no search was conducted at the premises of the assessee.
Therefore, provisions of Sections 132 and 132A of the Act were not applicable. Once these provisions are held inapplicable, the assessment framed under Section 158BD read with Section 158BC is not proper. He invited our attention to Clause (da) of Sub-section (2) of Section 246, which is reproduced as under :- an order of assessment made by an Assessing Officer under Clause (c) of Section 158BC, in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132A, on or after the 1st day of January, 1997.
According to him, this clause very clearly indicates that appeals against the order under Section 158BC were to be filed before the CIT(A) after first day of Jan., 1997, only if search was initiated under Section 132 or books of account, other documents or assets requisitioned under Section 132A. Therefore, the appellant was entitled to file the appeal before the CIT(A) under the general clause whereby he could challenge any demand raised by the Income-tax authorities. He also brought to our attention provisions of Section 158BE whereby Sub-section (1) provides time limit for completing the block assessment under Section 158BC and Sub-section (2) provides time limits for completion of block assessment under Section 158BD. Shri Mehta also submitted that in the alternative if it is held that this appeal ought to have been filed before the Tribunal, the delay in filing the said appeal in the present circumstances be condoned and admitted as having been filed in time. On the other hand, Ld. D.R. argued that there was no question of condonation for the appeal which has not been filed at all because the appeal filed before the Tribunal is against the order of CIT(A). He also stressed the words contained in Section 158BD, "the provisions of this Chapter shall apply accordingly". According to him, once a search is conducted and if it is found that documents relate to some other person, then such documents etc. are required to be handed over under Section 158BD to the Assessing Officer having jurisdiction upon such other person. However, in that case provisions of this Chapter will apply accordingly. Therefore, for all practical purposes, assessment shall be deemed to have been framed under Section 158BC and all provisions will apply. He also emphasised that reasons for filing the appeal before the Tribunal was that in case of search conducted before 1st day of Jan., 1997, the assessing authority had to take prior approval of Commissioner for finalising assessments. This condition of prior approval from Commissioner was amended to approval from Joint Commissioner for searches conducted after 1st Jan., 1997.
3. We have considered the rival contentions carefully and do not find any force in the contention of Ld. A.R. of the asscssee because even if no search is conducted under Section 132 or requisition made under Section 132A, block assessment can be framed under Section 158BD read with Section 158BC if documents etc. found during the search relate to any other person are handed over under Section 158BC to the assessing authority having jurisdiction over such connected person. Once the assessment has been framed under Section 158BC, then the right of appeal has been provided under Section 153(1)(b) and appeal should have been filed with the Tribunal if search was conducted before 1st Jan., 1997. We also do not find merit in the argument that the assessee could have filed appeal under Section 246 under the general clause and he was not covered by Clause (da) of Sub-section (2) of Section 246. We do not find any reason for going to Section 246 when specific right of appeal is provided under Section 253(1)(b). In these circumstances, we also do not find merit in the contention that delay should be condoned because no appeal as such has been filed before us. The appeal which has been filed is against the order of CIT(A) and does not amount to filing of appeal under Section 253(1)(b). We are not adjudicating ground No. 6, which relates to merit because there is no finding on this matter by the CIT(A). Under these circumstances, we confirm the order of CIT(A).
However, the assessee is at liberty to file appeal before the Tribunal.