2004 (4) TMI 522 - AT - Income Tax

Summary

Issues:
1. Whether the income filed after the due date should be treated as undisclosed income under section 158BB of the Income-tax Act.
2. Whether the assessment of income for the assessment year 1998-99 as undisclosed income under section 158BC was justified.

Analysis:

Issue 1:
The first issue in this case revolves around whether the income of Rs. 2,86,650 filed after the due date should be considered as undisclosed income under section 158BB of the Income-tax Act. The Revenue contended that the income was filed after the due date and should be treated as undisclosed income. They argued that the learned CIT(A) erred in not considering the provision of section 158BB(ca) of the Income-tax Act. However, the CIT(A) deleted the addition, stating that the Assessing Officer did not find any material during the search operation to support the income being classified as undisclosed. The Tribunal upheld the CIT(A)'s decision, emphasizing that the income in question had already been part of the regular income, subjected to tax deductions at source and advance tax, and was not based on any undisclosed sources.

Issue 2:
The second issue pertains to the assessment of income for the assessment year 1998-99 as undisclosed income under section 158BC. The Assessing Officer treated the income as undisclosed as the return was filed after the due date, within the block period from 1-4-1989 to 24-8-1999. The Revenue argued that the CIT(A) should have considered the violation of filing the return beyond the due date and after the search operation. However, the assessee contended that the income had already been part of the regular income, filed under section 139(4) on 31-3-2000, and subjected to regular assessment under section 143(3). The Tribunal agreed with the assessee, stating that the income was not undisclosed as it had been accounted for in the regular assessment and was not based on any material found during the search operation.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, upholding the decision of the CIT(A) to delete the addition of Rs. 2,86,650 as undisclosed income. The Tribunal emphasized that the income in question had already been part of the regular income, subjected to tax deductions, and was not supported by any material found during the search operation to be classified as undisclosed income under the Income-tax Act.