TMI Blog2008 (6) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... days due to non-availability of the photocopies of the seized material. The assessee had filed its block return on1st Jan., 1999declaring an income of Rs. 23,47,930. The assessment came to be completed under s. 158BC/143(3) on16th March, 1999, wherein the undisclosed income of the assessee had been computed at Rs. 1,04,94,584. Aggrieved the assessee has filed appeal to CIT(A) before whom the assessee had challenged the additions substantially and had also challenged the levy of interest under s. 158BFA(1). Against the order of the learned CIT(A), the assessee had filed appeal to this Tribunal in appeal No. IT(SS)A No. 4/Del/2000 which had decided substantial issue and in regard to the issue of the levy of interest under s. 158BFA(1) vide its order in IT(SS)A No. 4/Del/2000 dt. 31st March, 2006 had vide para No. 23 of its order restored the issue to the file of the CIT(A) to adjudicate the issue raised before the learned CIT(A) as the CIT(A) had not adjudicated the same with a speaking order. In consequence to the direction of this Tribunal in IT(SS)A No. 4/Del/2000 referred to supra, the learned CIT(A) had vide his appellate order in appeal No. 1/171/2006-07 dt.19th Dec., 2006had u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest is charged not for the failure of the assessee to pay any tax demand belatedly but it is in the nature of penalty and to attract the penal provisions, there has to be some element of lack of bona fides. It had been further held that the interest charged under s. 158BFA(1) is penal in nature insofar as it is levied to penalize the assessee for the default committed by him in furnishing the block return after the time specified in the notice under s. 158BC. As per s. 158BC, the assessee is not only required to file the block return, but it is also expected on its part that he will file the correct return of income and filing of such correct return of income is not possible unless the copies of the seized materials and/or copies of the statement recorded during the search are made available to him by the Department. It had been further held by the Tribunal that once the assessee makes a request for the copies and after such request is made and necessary follow up is made, if the Department does not supply copies of the seized material, then a fault cannot be traced on the part of the assessee for delay caused in furnishing the block return. It is also held that since the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was thus his submission that the term used in s. 158BFA(1) was "shall", which made the levy of interest compulsory and automatic. It was his further submission that the waiver or reduction of the same could be considered only by an administrative act and not in appellate proceedings. In regard to the merits, it was the submission that the notice under s. 158BC had been served on 22nd Aug., 1997 and the time-limit for the filing of return in response to the said notice expired on 15th Oct., 1997 and only on 1st Oct., 1997 the assessee had made its first request for the copies of the seized material. It was the submission that the provisions of s. 132(9) permitted the assessee to obtain copies of the seized material by making the necessary application to the AO. It was the further submission that the assessee knew that once search was completed the notice under s. 158BC would be issued and he would have to file its return of income. It was his further submission that only after the expiry of nearly 30 days after the service of the notice under s. 158BC, the assessee had requested for the copies of the seized documents. It was thus his submission that the interest levied under s. 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to file his correct return of income and he has only one chance to do it then obviously the assessee should also have the documents on the basis of which he would be able to prepare such return. This is because as per the provisions of s. 158BB the undisclosed income of the block period is to be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of the evidence found as a result of search or requisition of books of account and other documents etc. as reduced by the aggregate of the total income, or as a case may be, as increased by the aggregate of the losses of such previous years, determined. Thus for the purpose of computing undisclosed income in this case the same should be on the basis of the evidences found in the course of search or relatable to the evidences found in the course of search. If the assessee does not have the copies of the documents/evidences, which have been seized in the course of search, obviously the assessee would be at a substantial disadvantage. The principles of natural justice also demand that the assessee should have the copies of the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to verify as to whether the delay is attributable to the assessee. In the present case, it is noticed that the search had been concluded on27th March, 1997and the notice under s. 158BC has been served on22nd Aug., 1997. The assessee has within reasonable time requested the AO to grant the assessee the copies of the seized material. In the letter dt. 1st Nov., 1997 the assessee has specifically also clarified that without the seized material the assessee would not be able to file the block return. Further, from the letter dt.20th Nov., 1998, which is the acknowledgement of having taken all the photocopies required, it is noticed that the group companies' details are in relation to 10 persons. It is further noticed that after obtaining the seized material on20th Nov., 1998within 40 days on1st Jan., 1999the assessee has filed its block return. This being so, it would have to be held that the delay in filing block return was not on reasons which are attributable to the assessee. Further, the Revenue has also not been able to place before us any evidence to show that the assessee had by its action delayed the obtaining of the copies of the seized material. This being so, the delay in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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