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2011 (10) TMI 461 - HC - Income TaxOrder of the block assessment - challenge on the assumption of jurisdiction and on the point of limitation - Held That - The steps were taken to bring the assessee s case under Section 158BD was right. The date of service was 28.11.1996 and the assessment was to be completed on or before 30.11.1997. The date of the order of the High Court for stay was 19.11.1997 and the stay was vacated on 12.1.2001. Therefore, the stay period works out to 1536 days whereas the total available period including the stay is 1536 days and hence the assessment order since passed within 1535 days, it is in order and in time. Even otherwise, the High Court s order vacating the stay was received in the Commissioner s office on 1.2.2001. The limitation for passing the block assessment expires on 12.2.2001. Hence, the assessment was completed on that date - against assessee.
Issues:
1. Jurisdiction and limitation in block assessment 2. Validity of assessment under Section 158BE 3. Confirmation of jurisdiction for block assessment Analysis: Issue 1: Jurisdiction and Limitation in Block Assessment The appeal challenged the order passed by the Appellate Tribunal for the block period from 1986-1987 to 1996-1997. The Tribunal remanded the matter to the Assessing Authority for fresh consideration. The key contention was regarding the period of limitation for the block assessment against the assessee. The search on the assessee was conducted within the authority's power as per Section 132(1)(B)(iia) of the Income Tax Act. The assessment order was passed on 12.2.2001, which the assessee argued was beyond the prescribed limitation period. However, the Tribunal held that the assessment was completed within the limitation period based on the date of service of notice to the petitioner, which was 28.11.1996. Issue 2: Validity of Assessment under Section 158BE The assessment in question was made under Section 158BD of the Act, which deals with undisclosed income of any other person. The period of limitation for such assessments is specified under Section 158BE(2)(a) of the Act, which mandates completion within one year from the end of the month in which the notice under the Chapter was served. The Tribunal considered the timeline of events, including the stay granted by the High Court, and concluded that the assessment order was passed within the statutory limitation period. Issue 3: Confirmation of Jurisdiction for Block Assessment The Tribunal confirmed the jurisdiction to frame the block assessment despite challenges raised by the assessee. The Tribunal's order highlighted that the assessment order was passed within the prescribed time limit, taking into account the relevant dates of service of notice and the stay period granted by the High Court. The Tribunal's decision was based on a thorough examination of the provisions of the Income Tax Act and the specific circumstances of the case. In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decision on the substantial questions of law raised by the assessee. The judgment provides a detailed analysis of the jurisdiction, validity of assessment, and the period of limitation in the context of block assessment under the Income Tax Act, 1961.
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