TMI Blog2018 (12) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... deem it fit, on the answer given by us, to allow the appeals thus setting aside the proceedings initiated, under section 148 read with section 147, against the assessee. - I. T. A. Nos. 28 and 29 of 2010. - - - Dated:- 14-8-2018 - K. Vinod Chandran And Ashok Menon JJ. For the Appellant : E. K. Nandakumar , Senior Advocate, P. Benny Thomas , P. Gopinath , K. John Mathai and Ramesh Cherian John For the Respondent : P. K. R. Menon , Senior Counsel, Government of India (Taxes) and Jose Joseph , Standing Counsel, for Government of India (Taxes) JUDGMENT K. VINOD CHANDRAN J.- 1. The assessee, a practising advocate, is before this court raising the following questions of law from the orders of the Tribunal, which refused to interfere with the assessment under section 143(3) of the Income-tax Act, 1961 (for brevity IT Act ) : (i) Whether the Tribunal was correct in having sustained the reassessment carried out under section 147, when the reason recorded of the bank transactions not having been treated as undisclosed income, on which notice was issued under section 148, was a mere change of opinion ; the block assessment having taken note of the said tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 158BC read with section 143(3) of the Act and was dated November 29, 2002. 4. On August 12, 2003, a fresh notice is seen issued under section 148 of the Income-tax Act, purportedly after obtaining permission from the Additional Commissioner of Income-tax. The Assessing Officer, the next incumbent in the office of the Assistant Commissioner of Income-tax, Central Circle, Thiruvananthapuram, as seen from the order at annexure B, opined that the copies of the bank accounts were received during the course of post-search enquiries and though the same was noticed during the completion of block assessment, it was decided that the difference in investments in banks over and above the professional income could not be brought to tax in the block assessment, since the details were obtained through post-search enquiries. Immediately it is to be noticed that no such reservation was made by the officer completing the block assessment. A reassessment under section 147, thus was made for three years, being 1997-98, 1998-99 and 1999-2000, in which period the credits were found in the bank accounts. The appeals filed by the assessee before the first appellate authority were rejected. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2007] 291 ITR 500 (SC). It is pointed out that the earlier assessment under section 158BC was a block assessment initiated on a search under section 132. It is trite that when a block assessment is initiated on search, the assessment has to be confined to those materials recovered on search. The bank details obtained by the Assessing Officer was on enquiry conducted, post search, and hence, could not be relied on by the Assessing Officer under section 158BC. To advance such a proposition, the learned senior counsel places reliance on CIT v. S. Ajit Kumar [2018] 404 ITR 526 (SC) ; [2018] 302 CTR (SC) 7. The bank details having been recovered in the post-search enquiry, there could be a fresh proceeding initiated under section 147 dehors the earlier proceedings under section 158BC without any reference to the period of limitation as seen from the proviso. The mere fact that the earlier order at annexure-A quoted section 143(3) would not result in the proviso being made applicable, since it was on a mere inadvertent omission. The reassessment is liable to be sustained and so are the orders by the appellate authorities, argues learned senior counsel. 7. At the outset, we have to no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This was necessitated since the bank statements available were partial and the assessee was apparently not having the passbooks. Hence, whatever material was obtained from the banks was in pursuance of the enquiry conducted based on the material recovered at the time of search. The material recovered at the time of search, as is evident from the above extracts, were partial and, hence, the Assessing Officer called for further details and the banks supplied statements showing the entiretran sactions in the respective accounts during the block period. The said details could definitely have been relied upon by the Assessing Officer at the time of block assessment. 9. We also see that there is a proposal to treat the bank accounts as professional receipts. An objection was filed and some of the credits were found to have been explained. It was then that the Assessing Officer, though found some of the credits of a substantial nature to be nothing but professional fees, found such amounts credited in the bank accounts would be inclusive of the professional income. Then, a conscious statement was made to quantify the unaccounted professional receipts with reference to the unaccou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be followed. The power of survey being specifically provided under section 133A, any material or the evidence found or collected in a survey which has been simultaneously made at the premises of a connected person can be utilized while making the block assessment. 11. In the present case also, the block assessment indicates that certain details were obtained at the time of search and more details were called for from the respective branches of the banks in which the assessee maintained accounts. These details were available with the Assessing Officer before the block assessment was made and there would have been absolutely no difficulty in relying on them, since it is an information available with the Assessing Officer relatable to the material discovered on search. The cited decision, in fact, would help the assessee to contend that the Assessing Officer at the time of block assessment having not made any addition on that count, after having specifically noticed the transactions, and decided to treat them as inclusive of professional receipts, a new incumbent cannot take a different stand which would lead to the subsequent order being vitiated for reason of it being a me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were prima facie inadmissible. Essentially what was permitted was correction of the errors apparent on the face of the record, i.e., as revealed from the documents accompanying the return. A debatable issue could have been taken up only under section 143(2). It was held that the intimation under section 143(1)(a) though was deemed to be a demand notice under section 156, this does not preclude the right of the Assessing Officer to proceed under section 143(2). 15. Amendments were made subsequently also, which we are not concerned with since the amendment made with effect from April 1, 1989 is what is applicable in the present case, the assessment years being 1997-98 and 1998-99. The subsequent amendment was on June 1, 1999 and the subject assessment year in the cited decision was 2001-02. Suffice it to notice that by the subsequent amendment the issuance of intimation was also no longer mandatory and acknowledgment of the return was alone mandated. It was in that context that the hon'ble Supreme Court found that there is no assessment as such under section 143(1). Even with respect to the earlier years, with which we are concerned, a mere intimation would not preclude a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 158BC read with section 143(3) of the Act. As has been found in Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC) ; [2010] 3 SCC 259 section 158BH makes all provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. Section 142 and section 143(2) and (3) are, hence, applicable in the case of block assessments also. When section 143(3) has been resorted to, in making a block assessment, then necessarily there should have been an initiation of proceedings under section 148 within four years from the end of the relevant assessment year. The relevant assessment years here are 1997-98 and 1998-99. The limitation under the proviso to section 147 would operate respectively from March 31, 2002 and March 31, 2003. The block assessment was made on November 29, 2002, for which there is no limitation applicable, resorting also to section 143(3). For initiating a proceeding under section 147, the scrutiny assessment having been carried out, the limitation would be applicable, is the contention of the assessee. We need not go into this controversy since we have found that the block assessment could have taken note of and took note of the bank transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
