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2002 (9) TMI 73 - HC - Income TaxNotices under section 158BC - Search And Seizure - Block Assessment - The grievance of the petitioner in the original petition is that the second respondent-Assessing Officer is trying to by-pass the provisions of law by ignoring Chapter XIV-B and making hasty steps to complete the assessment under section 143(3) or 144 which is not authorised by law and hence there is no statutory remedy to keep the second respondent within the limits of his powers. - A Division Bench of the Gujarat High Court in N.R. Paper and Board Ltd. v. Deputy CIT, had an occasion to consider the matter in details and held as follows that the notices issued under section 143(2) were in respect of the regular assessment and the Assessing Officer was within his jurisdiction to proceed with the same as per section 143(3) and make a regular assessment of the total income/loss of the previous year for the assessment year 1995-96 notwithstanding the fact that the said previous year was included in the block period for the purpose of assessment of the undisclosed income and that such assessment was already done and was the subject-matter of challenge before the Tribunal . We agree with the reasons given in the above cases and hold that there is no bar for continuing the regular assessment including the block period.
Issues:
1. Interpretation of provisions under Chapter XIV-B of the Income-tax Act, 1961. 2. Assessment procedure for undisclosed income detected during search and seizure operations. 3. Authority of Assessing Officer to conduct assessments under different sections of the Act simultaneously. Analysis: Issue 1: Interpretation of provisions under Chapter XIV-B of the Income-tax Act, 1961. The case involved a writ appeal challenging a judgment regarding the assessment of undisclosed income for the block period under Chapter XIV-B of the Income-tax Act, 1961. The respondent, a practising advocate, was assessed for the assessment year 1993-94 under section 143(1) of the Act. The dispute arose when the Assessing Officer proposed to complete the assessment under section 143(3) or 144, bypassing the provisions of Chapter XIV-B. The court analyzed the relevant sections, particularly section 158BA, which mandates assessment of undisclosed income detected during search operations under the new procedure introduced in 1995. The court emphasized that assessments under Chapter XIV-B are additional to regular assessments, as clarified by the Explanation in the Act. Issue 2: Assessment procedure for undisclosed income detected during search and seizure operations. The court examined the contention that once proceedings are initiated under Chapter XIV-B, no other assessment proceedings can be conducted. However, the court disagreed with this view, citing precedents such as Malayil Bankers v. Asst. CIT and Caltradeco Steel Sales (P.) Ltd. v. Deputy CIT, which clarified that regular assessments can proceed alongside assessments under Chapter XIV-B. The court also referred to the decision of the Gujarat High Court in N.R. Paper and Board Ltd. v. Deputy CIT, which affirmed the Assessing Officer's jurisdiction to conduct regular assessments even if the previous year is part of the block period for undisclosed income assessment. Issue 3: Authority of Assessing Officer to conduct assessments under different sections of the Act simultaneously. The court addressed the argument that once an assessment is framed for a block period under section 158BC, the Assessing Officer is barred from conducting assessments under section 143. Rejecting this contention, the court held that there is no prohibition on continuing regular assessments, including those within the block period. Consequently, the court set aside the judgment of the single judge, dismissing the original petition and allowing the assessment proceedings to continue as per the interim order in the writ appeal. In conclusion, the court clarified the interplay between regular assessments and assessments under Chapter XIV-B, emphasizing that both can proceed simultaneously. The judgment provides guidance on the interpretation of relevant provisions under the Income-tax Act, ensuring proper assessment procedures for undisclosed income detected during search operations.
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