TMI Blog1999 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of Rs. 22,310 and Rs. 28,800 respectively. The assessment for assessment year 1992-93 and assessment year 1993-94 were framed under section 143(1) vide order dated 10th December, 1993 accepting the return of the assessee. However, the assessment for assessment year 1993-94 was re-opened under section 143(2) and she was finally assessed under section 143(3) on the total income of Rs. 31,800 against the returned income of Rs. 28,800 vide order dated 15th September, 1994. The returns for assessment years 1994-95 and 1995-96 were filed on 13-2-1996 declaring income of Rs. 31,670 and Rs. 21,756 respectively. These returns were filed for the purpose of regular assessment before the issue of Notice under section 158BC. However, the return for the block period in pursuance of Notice under section 158BC was filed on 20th December, 1996 declaring undisclosed income of Rs. 16,000 as under:-- Assessment Amount years 1986-87 to 1988-89 'Nil' 1989-90 Rs. 2,000 1990-91 Rs. 2,800 1991-92 Rs. 3,200 1992-93 to 1995-96 'Nil' 1996-97 Rs. 8,000 ------------------- Total : Rs. 16,000 ------------------ In the course of the assessment proceedings, it was noticed by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Tribunal. 6. The Ld. counsel for the assessee Mr. Vora has assailed the order of the Assessing Officer. Firstly, he objected to the observations of the Assessing Officer that the sum of Rs. 10,790 being part of deposit with M/s. Om Traders was from undisclosed source. He drew our attention to the statement of affairs of assessment years 1992-93 and 1993-94 appearing at page 10 and page 12 to show that cash balance on 31-3-1993 was Rs. 58,090 while credit has been given by the Assessing Officer only for the income of these two years minus withdrawals. According to the ld. counsel for the assessee, credit should have been given for the sum of Rs. 58,090 which was the cash available with the assessee on 31-3-1993 particularly, when such statement of affairs was accepted by the Department vide order dated 15th September, 1994 under section 143(3) in respect of assessment year 1993-94. Therefore, the question of holding the sum of Rs. 10,790 as income from the undisclosed sources did not arise. He then contended that income of Rs. 31,670 declared by the assessee before the issue of Notice under section 158BC being income from known sources could not be held as undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the provision of clause (c) of section 158B. According to him, if the assessee had not filed any return before the date of search and due date for filing of the return has expired, then it has to be considered as undisclosed income within the meaning of clause (c) of section 158BB and no deduction is to be allowed against such income. Since in the present case, due date of the return in respect of assessment years 1994-95 and 1995-96 had expired and no return had been filed before the date of search, the entire income of the assessee could be considered as undisclosed income and therefore, the Assessing Officer was justified in considering the income relating to assessment year 1994-95 and assessment year 1995-96 as undisclosed income though the income for assessment year 1995-96 could not be taxed being below the taxable limit. 8. Rival submissions of the parties as well as the materials placed before us have been considered carefully. We have also gone through the case law as well as the scheme of the Act. Regarding the first submission of Mr. Vora, we agree with him that the sum of Rs. 10,790 in respect of assessment year 1996-97 cannot be held as income from und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Chapter XIVB. Undisclosed income has been defined in section 158B. So what is to be assessed is the undisclosed income as defined in section 158B. Section 158BB provides how to compute such income. If the income does not fall within the ambit of section 158B, then in our opinion, the question of computation would not arise in view of the fact that provisions of section 158BA are non obstante provisions which would prevail over the procedural provisions of section 158BB. 10. The scope of provision of section 158B(b) defining undisclosed income were considered by this Bench in the case of Parakh Foods Ltd. to which one of us (JM) was party. In that case, it was held in para 21 that definition clause in section 158B is in two parts. First part is inclusive one which enlarges the natural meaning of undisclosed income while the second part is a restrictive one which specifies its boundaries inasmuch as the Legislature has used the words "has not been or would not have been disclosed". It was also held that scope of these two have to be considered with reference to the date of search. In para 23, at page 416, the Tribunal considered the natural meaning of the words " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer for assessment year 1994-95 was just slightly higher than the taxable limit. In view of these facts, it cannot be said that assessee would not have disclosed such income to the Department. Assessee cannot be punished merely because he/she failed to file his/her income before the due date or before the date of search. There may be cases that due to various circumstances, beyond the control of the assessee the return could not have been filed on or before due date and the search might have taken place just after the due date. In such case, it would be unreasonable to hold that assessee would not have disclosed such income particularly when assessee is legally permitted to file the valid return under section 139(4) i.e., after the expiry of the due date specified under section 139(1). Though such income would fall under clause (c) of section 158BB, but would be outside the scope of section 158B. Therefore, such income cannot be taxed under section 158BA. Therefore, in our considered opinion, where there is a conflict between the provisions of section 158BB and section 158BA read with section 158B the provisions of section 158BA must prevail being charging section and non ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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