TMI Blog1999 (4) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... and disposed of as follows : 3. Ground No. 1 reads as follows : The learned ACIT erred in bringing to tax salary income as undisclosed income for assessment years 1987-88 to 1992-93 as follows : A. Y. Salary 1987-88 Rs. 41,784 1988-89 Rs. 47,466 1989-90 Rs. 50,329 1990-91 Rs. 55,401 1991-92 Rs. 74,044 1992-93 Rs. 88,620 "Since there was nothing found in regard to the above income during the search and since even otherwise the salary received from Reserve Bank of India from which adequate and proper tax was deducted at source, such income could not be considered as 'undisclosed income' as defined. As the salary income for above years was not 'undisclosed income', the Ld. ACIT had no jurisdiction to assess the same under section 158BC. The additions made being untenable in law kindly be deleted in full." As discussed supra, the assessee was employed with Reserve Bank of India during the assessment years 1987-88 to 1992-93, the period covered under the block assessment period. The Assessing Officer noted that the assessee had not filed his income-tax returns for the assessment years 1987-88 to 1992-93 though his salary was assessable. The assessee produced ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of undisclosed income, but still if the Assessing Officer is of the opinion that it has escaped assessment, his remedy under section 148 is not ruled out. Section 158BB which prescribes procedure for computation of undisclosed income must yield to the basic theme of the block assessment that it is intended to assess undisclosed income found as a result of search. It therefore, becomes necessary to examine whether in a case like the present one income earned by the assessee from a public institution like RBI from which adequate tax would have been deducted at source, constitutes undisclosed income. He further submitted that the assessee was working with RBI, and it cannot be said that in the normal course, (he RBI, would not have disclosed in its return under section 206 the salary received by the assessee from which undoubtedly they had deducted tax at source. Unfortunately for the assessee, he could produce tax deduction certificate only for assessment year 1992-93. His file containing salary certificates was lost in the dacoity that took place at his residence. But he had maintained a Note Book in which the details of salary received by him as also tax deducted at source foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. 6. We have considered the rival submissions and perused the facts on record. In our opinion, the learned Assessing Officer has taken a very narrow view in interpreting undisclosed income. It appears, according to him, that if the assessee has not filed a return, it means that there is no disclosure for the purpose of the Act as envisaged under section 158B(b). Such a restrictive view is not at all warranted by the provisions of law. Section 158B(b) defines' undisclosed income' to include income or property which has not been or would not have been disclosed for the purposes of this Act. In this connection, it is significant to note that a non-disclosure has been mentioned in a general way. It has nowhere been stated that the disclosure has to be seen with reference to the assessee's return in whose case block assessment is being made. A disclosure for the purpose of the Act would be wide enough to include a case where employer submits his return of tax deduction from salaries under section 206 of the Act in which the incomes earned by the various employees have been disclosed. In the assessee's case, it is an accepted position that RBI would have filed a return under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from section 158BF. Similarly, Explanation 3 does not regard all cases of non-filing of return of cases of concealment. In the present case, tax was deducted at source adequately and being under a bona fide impression that no return is required to be filed, the assessee did not file the return. If this constituted reasonable cause, then even under Explanation 3 to section 271(1)(c) income would not have constituted concealed income. Even under section 147, if tax was deducted at source (in this case it was adequately deducted by the RBI) no action could be taken because there would be no escapement of tax. Thus, the D.R.'s argument that by non-filing of the return there has resulted an undisclosed income for the purpose of Chapter XIV is without merit 9. It is true that there is no place for equitable principles in tax legislation, but it is also well known that tax and equity need not be sworn enemies. In one of the recent cases i.e., S. Nagaraj v. State of Karnataka 1993 Suppl. (4) SCC 595, decided by the Hon'ble Supreme Court, Justice Sahai speaking for the Court explained the law on the subject thus: "Justice is a virtue which transcends all barriers. Neither the rules of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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