TMI Blog2014 (1) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings - Cargo Clearing Agency (Gujarat) v. Joint Commissioner of Income Tax [2008 (8) TMI 86 - GUJARAT HIGH COURT] sections 147/ 148 of the Act are not applicable to the assessment under Chapter XIVB of the Act – Decided against Revenue. - Tax Case No. 17 of 2011 - - - Dated:- 15-1-2014 - Shri Yatindra Singh, C.J. And Shri Manindra Mohan Shrivastava,JJ. For the Appellant : Shri Anand Dadariya For the Respondent : Shri GN Purohit, Senior Advocate with Shri Abhishek Oswal, Advocate JUDGEMENT 1. The only question involved in this tax case is, 'Whether sections 147/ 148 of the Income Tax Act, 1961 (the Act) providing for reassessment are applicable to the block assessment under Chapter XIVB of the Act or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment on 13.03.2005. This notice was on the basis of same material on which the CIT had passed the order under section 263 of the Act. 8. The Assessee filed a writ petition namely WP(T)-1676 of 2005, challenging the notice under section 148 of the Act. However, no interim order was granted in the writ petition and the assessment proceedings before the AO continued. The AO by his order dated 29.03.2006, assessed the undisclosed income of Rs. .2,96,74,778/-. 9. The Assessee filed an appeal before the Commissioner of Income Tax (Appeals) (the CIT-A). It was allowed on 29.05.2006 and the order of the AO was set aside essentially on the following findings: (i) The block assessment cannot be reopened under sections 147 and 148 of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the CIT-A dated 29.05.2006. It was dismissed essentially on the ground that sections 147/ 148 of the Act were not applicable to the block assessment under Chapter XIVB of the Act. Hence, the present appeal. QUESTIONS FOR DETERMINATION 12. We have heard counsel for the parties. The appeal was admitted for hearing on 06.07.2011 on the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case and in law the tribunal was justified in holding that the provisions of Section 148 of the Act are not applicable to the block assessment order passed under Chapter XIVB of the Act and thereby allowing relief to the assessee; (ii) Whether on the facts and circumstances of the case, the CIT(A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 17. At the relevant time, Chapter XIVB provided the 'block period' to mean, the previous years relevant to ten assessment years preceding the previous years in which the search was conducted and up to the date of commencement of the search. 18. Section 158BH of the Act is in Chapter XIVB of the Act. It is titled 'Application of other provisions of the Act': It applies other provisions of this Act to the block assessment under this chapter. It was necessary to clarify this as this chapter provides a special procedure in case of search for assessing the income for the block period. 19. Nevertheless, a provision will become applicable by virtue of 158BH only if it can be applied on its wording to Chapter XIVB. The question is, can it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to be construed strictly. 22. Section 147 of the Act is titled as 'Income Escaping Assessment'. It provides that if the Assessing Officer has reason to believe that any income chargeable to the tax has escaped in any assessment year, he could re-assess the income subject to fulfilling other conditions mentioned in that section. 23. Section 148 is titled as 'Issue of notice where income has escaped assessment'. It provides issuance of notice before making the assessment, re-assessment or re-computation under Section 147 of the Act. 24. Section 147 of the Act uses the words 'in any assessment year'; it does not use the words 'in any assessment year or for any block period'. Had it used the words 'in any assessment year or for any blo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cargo-Clearing case) and has held that sections 147/ 148 of the Act are not applicable to the assessment under Chapter XIVB of the Act. We agree with the same and are unable to subscribe to the view taken by the Gauhati High Court in the Peerchand case. 30. The material for notice for reassessment under section 148 of the Act is the same as was for passing order under section 263 of the Act. The order under section 263 of the Act has been set aside by the Tribunal on the ground that the initial order passed by the AO was not prejudicial to the interest of the Revenue. 31. In view of above, the CIT-A has held that once the order under section 263 has been set aside, the same material cannot be used for notice under section 148 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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