TMI Blog1999 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... flected in their accounts filed with their respective Assessing Officers. The assessee has filed the income-tax return for the assessment year 1994-95 disclosing a loss of Rs. 11,630. An intimation under section 143(1)(a) of the Act of 1961 has been issued on March 27, 1997, accepting the returned loss. For the assessment year 1995-96, the assessee has disclosed an income of Rs. 3,16,310. An intimation has again been issued under section 143(1)(a) of the Act of 1961. In this year notices under sections 142(1) and 143(2) of the Act have been issued to the assessee. For the assessment year 1996-97, the petitioner has disclosed an income of Rs. 55,240. Intimation has been received in this year also under section 143(1)(a) of the Act of 1961. For all these three years the assessee has approached the Settlement Commission for settlement of his income in these years. His application has been admitted and the matter regarding income of the assessee, for all these three years is pending before the Settlement Commission and in the application before the Settlement Commission the assessee has further offered additional income aggregating Rs. 2,80,000 in all these three aforesaid years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of search the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. Chapter XIV-B provides for special procedure for assessment of search cases. The provisions of section 158B provide the definition of "block period" and "undisclosed income". The provisions of section 158BA provide that in case of a search after 30th day of June, 1995, the Assessing Officer shall proceed to assess "the undisclosed income" in accordance with the provisions of this Chapter. The provisions of section 158B provide how the undisclosed income shall be computed of the block assessment period. The provisions of section 158BD provide where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and the Assessing Officer shall proceed against such other person and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be settled in the settlement proceedings. For all these three years will be settled by the Settlement Commission. When neither the Assessing Officer has any information regarding "undisclosed income" of the assessee nor there is any scope for assessing the income of the assessee by him, for the assessment years 1995-96 to 1997-98. There is no justification for issue of notice to the assessee under section 158BC/BD. Chapter XIX-A deals with the settlement of cases. Section 245B provides that the Central Government shall constitute a Commission to be called the Income-tax Settlement Commission for the settlement of cases under this Chapter. Clause (b) of section 245A defines the case. "Case" means any proceeding under this Act for the assessment or reassessment of any person in respect of any year or years, or by way of appeal or revision in connection with such assessment or reassessment, which may be pending before an income-tax authority on the date on which an application under sub-section (1) of section 245C is made. The provisions of section 245F provide the power and procedure of the Settlement Commission. The statute has conferred all the powers on the Settlement Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer can proceed for assessment in pursuance of the notice under section 158BC/BD in the case of this assessee, when its income for these years is pending before the Settlement Commission. Learned counsel for the Revenue could not explain the justification how the Assessing Officer can proceed in the case of this assessee for assessment in pursuance of the notice under section 158BC/BD. Mr. Mallick, learned counsel for the Revenue, submits that the issue regarding the income of the assessee for the assessment years 1995-96 to 1997-98 is pending before the Settlement Commission but that was a case of regular assessment and no matter regarding search is pending before the Settlement Commission. On an application of the assessee before the Settlement Commission, the Settlement Commission has admitted the application of the assessee for settlement of his income vide order dated May 27, 1998. For settlement of its total income, the income-tax liability for the assessment years 1995-96, 1996-97 and 1997-98. How it can be said that income of these years were not subject-matter of the settlement before the Settlement Commission. Not only that, but the attention of the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (2) further provides that until an order is passed under sub-section (4) of section 245D, then, subject to the provisions of sub-section (3), of that section, the Settlement Commission shall have exclusive jurisdiction to exercise the powers and perform the functions of an income-tax authority under this Act in relation to the case. Sub-section (3) and sub-section (4) of section 245D provide that where the application is allowed to be proceeded with under sub-section (1), the Settlement Commission may call for the relevant records from the Commissioner and after examining of such records, the Settlement Commission may also direct the Commissioner to make or cause to be made such further enquiry or investigation and furnish a report on the matter covered by the application. Sub-section (4) further provides that after examination of the records and the report of the Commissioner received and after giving an opportunity to the applicant and to the Commissioner to be heard, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the Commissioner un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 158BC. How the Assessing Officer can proceed to assess the income of the assessee, when the dispute regarding assessable income for the assessment years 1995-96 to 1997-98 is also pending before the Settlement Commission. To sum up. No. 1 : The Income-tax Officer has no material to justify that the assessee had undisclosed income which can he assessed under Chapter XIV-B of the Act. No. 2 : The search was in the case of Super Forgings and Steels Limited and not in the case of this assessee, while the Assessing Officer has not proceeded to assess the income of Super Forgings and Steels Ltd. in pursuance of notice under section 158BC, on the basis that the dispute regarding the income of Super Forgings and Steels Ltd. is pending before the Settlement Commission. How the Assessing Officer can proceed to assess the income of the assessee for the assessment years 1995-96 to 1997-98 in pursuance of notice under section 158BC/BD, while the matter regarding the total income for those years is also pending before the Settlement Commission. No. 3 : Any income which is assessable on the basis of seized papers, the matter to assess that income is pending on ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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