TMI Blog2005 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (for short "the Act"): The facts briefly are that a search was conducted under section 132 of the Act in the residential premises in which the appellant as well as his elder brother, Dr. Rajendra Lahoti, reside. During the search, books of account of the appellant were found, but not seized. On the basis of the said books of account, the appellant filed a return disclosing income from his profession at Rs. 44,800 under section 139(4) of the Act on March 31, 1997. Thereafter, the Assistant Commissioner of Income-tax, Circle 1, Indore, made an assessment of undisclosed income of the appellant for the block period comprising of the assessment years 1988-89 to 1996-97. Aggrieved by the order of assessment dated December 29,1997, the appellant filed appeal before the Income-tax Appellate Tribunal, Indore Bench, Indore, and the Income-tax Appellate Tribunal held that for some of the assessment years, the appellant had no taxable income and for some other assessment years, the tax had been deducted at source. For the assessment year 1996-97, the appellant contended before the Tribunal that since he had maintained the books of account and in his return of income filed under section 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,800, in exercise of his said right under section 139(4) of the Act, this is not a case where the provisions of Chapter XIV-B of the Act relating to assessment of "undisclosed income" could be applied. Mr. R.L. Jain, learned senior counsel appearing for the Department, on the other hand, submitted that for the assessment year 1996-97, the appellant was required to file the return of income under section 139(1) of the Act on or before July 31, 1996, but the appellant had not filed the return on or before July 31, 1996. He submitted that the search was conducted on December 20, 1996, and only thereafter the appellant filed his return of income for the assessment year 1996-97 on March 31, 1997, to save himself from the consequences of assessment of "undisclosed income" under Chapter XIV-B of the Act. He relied on the decision of the learned single Judge of the Madras High Court in B. Noorsingh v. Union of India [2001] 249 ITR 378, wherein it has been held that in search cases where the time for filing the return under section 139(1) of the Act has not expired, income disclosed in the books of account is not treated as undisclosed income, but once search takes place, the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false. Section 158BA. Assessment of undisclosed income as a result of search.-(1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995, a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. (2) The total undisclosed income relating to the block period shall be charged to tax, at the rate specified in section 113, as income of the block period irrespective of the previous year or years to which such income relates and irrespective of the fact whether regular assessment for any one or more of the relevant assessment years is pending or not. Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be normally held that his income has not been disclosed for the purpose of this Act. This interpretation given by us finds support in the language used in sub-section (3) of section 158BA of the Act which provides inter alia, that where the assessee proves to the satisfaction of the Assessing Officer that any part of income referred to in sub-section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income under section 139(1) of the Act for the previous year has not expired and such income or the transactions relating to such income are recorded on or before the date of the search or requisition of the books of account or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block period. Thus, if the assessee does not disclose any income in the return filed before the due date of filing such return under section 139(1) of the Act, notwithstanding the fact that his income is reflected in books of account at the time of search, his income is to be assessed as undisclosed income. Mr. Chaphekar, learned senior counsel appearing for the appellant, su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
