The satisfaction recorded by the Assessing Authority in a related appeal can be deemed sufficient for initiating proceedings under Section 158BD, and failure to raise objections at the initial stage may be deemed as acquiescence to the jurisdiction of the authority.

VINEET KOTHARI, J.

1. This Appeal has been filed by the Assessee Smt. V. Vijayalakshmi, under Section 260-A of the Income Tax Act, 1961, in short, ‘Act’ raising the following Substantial Questions of Law, arising out of the order from the learned Income Tax Appellate Tribunal, in short, ‘Tribunal’ dated 06.06.2008, in I.T. (SS) A. No. 94/MDS/2007, dismissing the appeal of the Assessee for Block Assessment Period from 01.04.1995 to 13.09.2001:

(1) Whether the Appellate Tribunal is correct in law in concluding that the assessment framed in terms of Section 158BD of the Act was valid even though there was no satisfaction recorded by the Assessment Officer of the searched person in the course of framing of the Block Assessment in his hands and further even though there were no seized materials indicating payment of on-money with a view to justify the addition of Undisclosed Income in this regard?

(2) Whether the Appellate Tribunal is correct in law in sustaining the action of the Respondent in framing the Block Assessment in terms of Section 158BD of the Act even though the decision of the Honourable Supreme Court and the decision of this Honourable Court were cited and noticed in the impugned order to support the propositions canvassed on the validity of the Block Assessment framed in the hands of the Appellant?

(3) Whether the Appellate Tribunal is correct in law in sustaining the action of the Respondent on the jurisdictional issue even though the directions of the Appellate Tribunal while passing the order in the hands of the searched person for initiating and framing of the assessment in the hands of the Appellant in terms of Section 158BD of the Act would not override the mandatory provisions in the said section for recording of satisfaction of Undisclosed Income assessable in the hands of the Appellant while completing the assessment of the searched person?

(4) Whether the Appellate Tribunal is correct in confirming the addition of Rs. 15,39,739/- (enhanced figure) being the on-money payment worked out by the Respondent and the Commissioner of Income Tax (Appeals) solely based on the Sworn Statements of the searched person and the seller of the property in spite of the decision of the Supreme Court laying down the mandatory principles for not making addition in the Block Assessment depending upon and citing the Sworn Statements alone?

2. Learned counsel for the Appellant/Assessee has urged before us that the Assessing Authority failed to record any reasons while initiating the proceedings of Assessment under Section 158BD of the Act against the present Assessee, namely, Smt. V. Vijayalakshmi, mother of Mr. S.V. Srinivasan, against whom a Search under Section 132 of the Act was conducted on 13.09.2001 and then proceedings for Assessment under Section 158BC of the Act were initiated. He, therefore, submits that the assessment in the hands of the mother - present Assessee - Smt. V. Vijayalakshmi - is without any basis in the absence of satisfaction being recorded and the Tribunal has erred in holding that the satisfaction recorded by the learned Tribunal while dealing with the earlier appeal of the son - Mr. S.V. Srinivasan - can be taken as sufficient for initiating the proceedings under Section 158 BD of the Act against the mother - present Assessee. Regarding the ‘Additions’ made for the sale of property in the hands of the mother-present assessee, he submitted that there were inconsistencies in the statements recorded by the authorities at the time of search of the searched person Mr. S.V. Srinivasan and the seller of the property and, therefore, no such additions could be made in the hands of the present assessee-mother - Smt. V. Vijayalakshmi under Section 158BD of the Act.

3. On the other hand, Mr. T.R. Senthil Kumar, learned Senior Standing Counsel, appearing for the Respondent/Revenue, supported the impugned order of the learned Tribunal and submitted that during the course of Search under Section 132 of the Act ag