TMI Blog2006 (6) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out at the business and residence premises of the assessee on 4-9-2002. Block assessment under section 158BC was passed on 30-9-2004 on an undisclosed income of Rs. 1,48,94,580. Therefore ld. CIT issued a notice under section 263 on 19-4-2005 wherein he mentioned that assessee had filed a regular return for the assessment year 2002-03 on 1-9-2004 disclosing an income of Rs. 53,27,812. The ld. CIT noted that the said return of income was not filed by the assessee during the time allowed under section 139 and was, therefore, non est. He was of the view that while completing a block assessment the income disclosed by the assessee in the said return for the assessment year 2002-03 should have been considered by the Assessing Officer as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 2002-03 as the undisclosed income in the block assessment order after taking cognizance of the settled law. (iii) Before completion of the block assessment order dated 30-9-2004 passed by the Assessing Officer, a regular return for the assessment year 2002-03 was filed on 1-9-2004, which was within the knowledge of the Assessing Officer. (iv) Since the assessee's application is pending before the Hon'ble Settlement Commission, it will not be proper for any other authority to interfere in the matter. (v) The assessee had paid advance tax for the assessment year 2002-03 amounting to Rs. 5,71,000 on 14-3-2002 i.e. before the date of the search and it was claimed on behalf of the assessee that there are number of decisions in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer on 30-9-2004 was erroneous insofar as it is prejudicial to the interest of the revenue and hence he set aside that assessment and directed the Assessing Officer to include the said income at Rs. 53,27,812 in the block assessment. 3. Before us, ld. A.R. of the assessee argued that the return for the assessment year 2002-03 was not due on the date of search and the same was filed after getting Photostat copies of seized material and books on 5-7-2004 and after obtaining audit report, the assessee filed a return on 1-9-2004 declaring regular income of Rs. 53,27,812. Secondly, assessee has paid advance tax for the assessment year 2002-03 amounting to Rs. 5,71,000. This sum was paid on 14-3-2002 whose certificate is filed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s according to the amendment made by the Finance Act, 2002, wherein such income is to be included in the block assessment. 4. We have considered the rival submissions and perused the material on record. The ld. CIT is in fact banking upon the provisions of section 158BB(1)(ca) for the proposed action. The said section 158BB(1)(ca) reads as under: "158BB. (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to show in his order under section 263 that the sum of Rs. 1,48,94,580 does not include the income for the previous year 2001-02. Notwithstanding ld. CIT ignored the provisions of section 158BB(1)(c) which reads as under: "158BB. (1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of book of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. counsel that entire income filed in the belated return was entered into regular books of account, entries therein were made on that basis, audit was done and audit report was obtained, advance tax was paid, though not commensurate with the declared income but that alone will not make the case to fall in clause (ca) as against clause (c). For shortfall in payment, the Assessing Officer may charge interest under sections 234B and 234C but cannot bring his case to clause (ca) when it squarely fell in clause (c). The case laws cited by the ld. counsel for the assessee clearly support the proposition that where entries are made in the regular books of account in the normal course of business, then income computed on the basis of such ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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