TMI Blog2012 (7) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the proceeding” appearing in clause (iii) of Explanation-1 to mean a reopening of the assessment under Section 148. With respect, the reasoning appears to be convoluted and untenable. The reopening of the proceeding referred to in clause (iii) of Explanation-1 is the reopening of the proceedings for the assessment which have been completed in part by an earlier incumbent of office, and not the reopening of the assessment under Section 148 - in favour of assessee. - ITA No.169/2012 - - - Dated:- 12-7-2012 - MR. JUSTICE S. RAVINDRA BHAT, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. M. P. Rastogi and Mr. K. N. Ahuja, Advocates. For Respondent: Mr. Anupam Tripathi, Sr. Standing Counsel. R.V. EASWAR, J.: 1. This is an appeal by the assessee under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act‟). By order dated 13.03.2012, the following substantial question of law was framed: - Whether the Income Tax Appellate Tribunal is right in holding that the block assessment order passed on 30th July, 2002 is not barred by limitation as Section 129 read with proviso to Explanation 1 to Section 158 BE of the Income Tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. It is evident from the above paragraph that the CIT (Appeals) did not accept the plea of limitation. 5. The Revenue preferred IT (SS) A.No.303/Del/2003 before the Income Tax Appellate Tribunal, Delhi Bench (hereinafter referred to as the Tribunal‟). In this appeal the order of CIT (Appeals) deleting the additions was challenged. The assessee filed cross-objections before the Tribunal in CO No.28/Del/2008 in which the ground taken was that there was no valid search since the warrant of authorisation was issued by the Joint Director of Income Tax (Investigation) under Section 132 of the Act and therefore, the assessment framed under Section 158BC was bad in law. The Tribunal passed a consolidated order on 03.07.2009 dismissing the appeal filed by the Revenue. So far as the assessee‟s cross-objection is concerned the Tribunal held that no valid warrant of authorisation had been issued under Section 132 in the assessee‟s case as the Joint Director of Income Tax (Investigation) was not competent to sign the warrant of search and since there was no valid search, the Assessing Officer was not empowered to frame the block assessment order under Section 158BC. On thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to file a return in prescribed form and verified in prescribed manner setting forth his total income including the undisclosed income for the block period. The first proviso to this section states that notice u/s 148 is not required to be issued for such proceedings. This clearly means that notice u/s 158BC is analogous to a notice u/s 148, which is issued for reopening the assessment already completed. It is also clear from the legislative history that before introduction of chapter XIVB, a notice u/s 148 had to be issued in respect of the years for which the concealed income was detected in the course of search. Such income is known under chapter XIVB as undisclosed income , which has been defined in section 158B(b). This brings us to the provision contained in clause (iii) of Explanation 1 of section 158BE. This provision inter-alia deals with the time taken for reopening the whole or any part of the proceeding. This time has to be added while computing the limitation date u/s 158BE (b). However, the time cannot exceed the period of 60 days under the proviso to Explanation 1 of section 158BE. If this time of 60 days is reckoned from 01.06.2002, the order is in time as it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129 of the Act we find that it provides for the procedure to be followed when there is a change of incumbent of an office . The Section is as under: - Change of incumbent of an office. 129. Whenever in respect of any proceeding under this Act an income-tax authority ceases to exercise jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor: Provided that the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard. 11. We do not see how this provision helps the Revenue. It is applicable when in the same jurisdiction, there is a change of incumbent and one Assessing Officer is succeeded by another. In such a case, the main Section provides that the successor officer is entitled to continue the proceeding from the stage at which it was left by his predecessor subject to the caveat, expressed in the proviso, that if the assessee demands that before the proceeding is continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case the assessment proceedings were commenced only by the Assessing Officer at Delhi by notice issued on 11.06.2002. Thereafter there was no change in the incumbent of the office so as to attract the provisions of Section 129. In such a situation there is no scope for importing the proviso to Section 129 to extend the period of limitation. Even factually there is nothing on record to show that the assessee made any request or demand before the Assessing Officer in Delhi that the previous proceedings, if any, should be reopened or that before any order of assessment is passed against her, she should be reheard. Therefore, both factually and legally there is no scope for invoking Explanation-1(iii) to Section 158BE of the Act to extend the period of limitation. The assessment under section 158BC ought to have, therefore, been completed on or before 30.06.2002 as per Section 158BE (1) (b) of the Act. Since it was completed only on 30.07.2002, it is barred by limitation. 12. In our opinion and for the above reasons the Tribunal erred in relying on clause (iii) of the Explanation-1 to Section 158BE to hold that the block assessment order passed on 30.07.2002 is within the period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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