TMI Blog2005 (1) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(3)/158BC determining the total undisclosed income at Rs. 1,34,13,424. The original block assessment was made on 29-11-1996 in consequence to a 'search' conducted at the residence and other places of the assessee on 3-11-1995. Being aggrieved with the assessment order made by the Assessing Officer under section 158BC on 29-11-1996, the assessee preferred an appeal before the Tribunal being the 1st appellate authority. The Tribunal vide its order dated 01-06-2000 in appeal no. IT(SS) A No. 9 (Cal.) of 1997 allowed relief on certain points and set aside the following points for fresh adjudication by the Assessing Officer after providing opportunity of being heard to the assessee:- (i) Rs. 9,06,961 unrecorded credit notes (ii) Rs. 3,66,746 Sundry Creditors; and (iii) Rs. 65,000 Cash payment outside the Ledger (Assessment Year 1994-95) In addition to the aforesaid issues, the Tribunal also directed the Assessing Officer to compute the gross profit by applying the rate of 12 per cent on the undisclosed sales/profit shown by the assessee for the block period as well as on unverifiable vouchers for the block period from 1-4-1995 to 3-11-1995 for the purpose of tax. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer to decide the same afresh after providing a reasonable opportunity of being heard to the assessee and as such period of limitation to make fresh assessment order on these issues is subject to the provisions contained in section 153(2A) of the Act read with section 158BH of the Act. He further clarified that the Tribunal's order dated 8-10-2001 passed in MA No. 74 (Cal.) of 2001 is not related to these issues, and as such the period of limitation as provided under section 153(2A) is not to be reckoned from the Tribunal's order dated 8-10-2001 passed in MA No. 74 (Cal.) of 2001. The Tribunal's order dated 8-10-2001 in MA No. 74 (Cal.) of 2001 has substituted the Tribunal's earlier order dated 1-6-2000 only in respect to the direction given by the Tribunal to compute the gross profit by applying the rate of 12 per cent on the undisclosed profit shown by the assessee for the broken period from 1-4-1995 to 3-11-1995. He, therefore, contended that the Assessing Officer's fresh assessment order on the aforesaid three issues, which are related to the unrecorded credit notes, sundry creditors and cash payment made outside the ledger, having been made on 28-3-2003 is beyond the prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of January, 1997; (b) within two years from the end of the month in which the last of the authorizations for search under section 132 or for requisition under section 132A, as the case may be, was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. (2) The period of limitation for completion of block assessment in the case of the other person referred to in section 158BD shall be- (a) one year from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997; and (b) two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. Explanation 1 - In computing the period of limitation for the purposes of this section, the period- (i) during which the assessment proceeding is stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner or, as the case may be the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner: Provided that where the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time upto the 31st day of March, 2002. (3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A), be completed at any time- (i) *** [omitted by the Finance Act, 2001 w.e.f. 1-6-2001]. (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is clarified as under- "besides, all other provisions of the Act shall apply to the assessments to be made under this Chapter. In other words, the provisions relating to regular IT proceedings, obligations for the payment of assessment of tax under section 140A before filing the return showing an undisclosed income, recovery proceedings, appellate proceedings, etc. shall be applicable." It is, thus, clear that the matters which has not been otherwise provided under Chapter XIV-B shall be governed by the provisions of the IT Act. It is the intention of the department that save and except as otherwise provided in Chapter XIV-B, all other provisions of the Act shall, mutadis mutandis, shall be applied to the block assessment. The intention of the legislation to apply all other provisions of the Act to the proceedings under Chapter XIV-B is thus very much clear however, that is subject to the provisions as otherwise provided in Chapter XIVB of the Act. Since in the Chapter XIVB, no provision is provided for time limit for completing the fresh assessment in pursuance of an order under section 250/254/263 or 264, we have to refer to the time limit provided in section 153(2A), whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment should be set aside to complete the same de novo. Even if fresh assessment is to be made in respect of any one issue in pursuant to the order under section 250 or section 254 or section 263 or section 264, the provisions of section (2A) of section 153 would be applicable for the purpose of completing the fresh assessment on the said issue which has been set aside for fresh adjudication. The decisions cited by the Ld. Counsel for the assessee in the following cases may be referred to: -------------------------------------------------------------------------- (i) Order of ITAT, Kolkata Bench 'C' in Peerless Consultancy Services (P.) Ltd. ITA No. 1105/Kol/03 Assessment Year 1996-97 Dated 15-01-2004. (ii) decision of Madras High Court in M. Kailannan 261 ITR 466 (iii) decision of MP High Court in Gulabchand Motilal 174 ITR 117 (iv) decision of Allahabad High Court in Kamla Devi 217 ITR 330 (v) Order of ITAT, Kolkata Bench 'A' in Saratkumar Jhunjhunwal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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