TMI Blog2004 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, on the following substantial question of law: "Whether the Appellate Tribunal is right in law in cancelling the assessment under Chapter XIV-B in the light of the specific provision contained in section 158BB(1)(c) of the Income-tax Act?" In brief, the respondent/assessee is a partnership firm. A search was conducted by the revenue authorities under section 132 of the Income-tax Act, 1961 (for brevity "the Act") on February 23, 1996, pursuant to a warrant of search issued by the competent authority to search M/s. A. R. Mercantile Private Limited at 26, Fagun Chambers, Commander-in-Chief Road, Madras-600 105. During the course of the search, certain books and documents (nine in number) relating to the assessee were seized. On scrutiny, it was noticed that the assessee earned taxable income for the assessment year 1995-96, but no return was filed till the date of the search. Therefore, the Assessing Officer based on the materials seized during the search viewed the same as a detection of undisclosed income and initiated action under section 158BD of the Act, which reads as follows: "Section 158BD. Undisclosed income of any other person.-Where the Assessing Officer is satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r committed an error in treating the income of the respondent/assessee as undisclosed income and therefore, declared the assessment order under Chapter XIV-B, section 158BD of the Act is null and void. Hence, the above appeal on the substantial question of law is referred to above. Substantiating the contention of the Revenue, learned standing counsel invited my attention to section 158B(b) of the Act, contending that the case of the respondent/assessee clearly attracts the undisclosed income as defined under section 158B(b) of the Act. Learned standing counsel, based on the decision of this court in B. Noorsingh v. Union of India [2001] 249 ITR 378 contended that mere payment of advance tax by itself does not establish the intention to disclose the income. The decision in B. Noorsingh's case [2001] 249 ITR 378 (Mad), relates to 10 the constitutional validity of section 158BB of the Act, which deals with the computation of undisclosed income for the block period. R. Jayasimha Babu J., while dealing with section 158BB(1)(c) of the Act, as to whether the assessee who had paid advance tax is entitled to file the return of income after the expiry of the due date, particularly aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntil it is disturbed by any further regular assessment, it remains as tax levied and collected in accordance with law. The fact that the Assessing Officer, when not accepting the correctness of the revised returns, has a power to check the computation of income and examine the correctness of the total income declared therein, cannot nullify the validity of the tax levied and collected on the basis of the return filed by the assessee. Even if the Assessing Officer does not make any regular assessment, the result only would be that the tax payable and which has been paid on the basis of the returns filed by the assessee is deemed to have been accepted as properly paid and no further demand can be made since the regular assessment has not been made within the prescribed time. On the other hand, if the assessee, even after filing the return, felt that the total income was not correctly shown by him, he can, under section 139(5), file a revised return within the prescribed time and, apart from that, he can also file a claim for refund in accordance with section 237 read with section 239 of the Act. The claim for refund has to be made within two years and if such person satisfies the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003] 261 ITR 367 (SC) and (ii) Saurashtra Cement and Chemical Industries Ltd. v. ITO [1992] 194 ITR 659 (Guj)[FB] both, held as follows: "There cannot be any manner of doubt that when the assessee pays advance tax the advance tax payment is assessed by the assessee on the basis of self-assessed income. The advance tax reflects the income admitted by the assessee. When the assessee pays the advance tax he discloses his income at the particular point of time, which may or may not be taxable on a subsequent date, on the return submitted by him under section 139 or under sub-section (1) of section 142 because of the assessee's tax planning or he may claim exemption and refund of the tax paid, but for doing so he will have to show the income on which the advance tax is paid and then claim refund or complete exemption, as the case may be, as permissible under the relevant statute.....Disclosure of the self-assessed income by the assessee would only entitle the assessee to claim refund or exemption from tax as the assessee is required to show the income on the basis of which the advance tax is paid or ultimate claim is made. The moment the advance tax is paid the taxable income at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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