2003 (1) TMI 713 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction and validity of proceedings u/s 158BC.
2. Limitation period for assessment u/s 158BE.
3. Merits of additions and interest charged u/s 158BFA(1).

Summary:

1. Jurisdiction and Validity of Proceedings u/s 158BC:
The assessee challenged the proceedings u/s 158BC, claiming they were without jurisdiction and bad in law. The CIT(A) upheld the order, rejecting the legal grounds regarding jurisdiction but allowed some relief regarding the quantum of undisclosed income.

2. Limitation Period for Assessment u/s 158BE:
The assessee argued that the assessment was time-barred. The search was concluded on 21-4-1999, and the prohibitory order u/s 132(3) could not extend the limitation period. The Tribunal agreed, citing the Bombay High Court decision in CIT v. Mrs. Sandhya P. Naik, which held that a restraint order does not amount to seizure and cannot extend the time limit for framing the order. Thus, the assessment completed on 29-5-2001 was beyond the permissible period and was quashed.

3. Merits of Additions and Interest Charged u/s 158BFA(1):
Given the quashing of the assessment order on the grounds of limitation, the Tribunal did not find it necessary to adjudicate on the merits of the case, including the additions and interest charged u/s 158BFA(1).

Conclusion:
The appeal was allowed, and the assessment order was quashed due to being barred by limitation.