9911796707
|
Home
Issues Involved:
1. Whether the assessment order dated 28-4-1997 determining the undisclosed income of the assessee for the Block Period is barred by limitation and liable to be quashed. Issue-wise Detailed Analysis: 1. Limitation Period for Block Assessment: The primary issue revolves around whether the assessment order dated 28-4-1997 is barred by limitation as per section 158BC(c) of the Income-tax Act, 1961. The search was conducted on 20-10-1995, and the assessment order was passed on 28-4-1997. The key point of contention is the interpretation of the period to be excluded for obtaining an audit report under section 142(2A). Facts: - The search in the business premises of the assessee was conducted on 20-10-1995. - The Assessing Officer (AO) appointed an auditor on 1-10-1996 to audit the accounts for the block assessment years 1986-87 to 1995-96, with a directive to submit the audit report by 20-2-1997. - The auditor submitted the report on 9-4-1997. - The assessee argued that only the period from 11-10-1996 to 20-2-1997 should be excluded, while the Revenue contended that the period until 9-4-1997 should be excluded. Legal Provisions: - Section 158BE(1)(a) stipulates a one-year period from the end of the month in which the last search authorization was executed. - Explanation 1 to section 158BE provides for the exclusion of the period during which the assessee was directed to get accounts audited under section 142(2A). Arguments: - The assessee argued that the period to be excluded is only the originally fixed period unless extended under section 142(2C), which was not done in this case. - The Revenue argued that the period to be excluded should be until the actual submission of the audit report, within the 180-day limit. Tribunal's Findings: - The Tribunal noted that the AO's letter to the auditor was not in conformity with section 142(2A), which directs the assessee, not the auditor. - The Tribunal emphasized that the period to be excluded is from the date of the AO's direction to the date the assessee is required to furnish the audit report. - The Tribunal concluded that the period to be excluded is from 11-10-1996 to 20-2-1997, totaling 102 days. - As the block assessment order was made on 28-4-1997, it was beyond the permissible period after including the 102 days exclusion. Conclusion: The Tribunal held that the block assessment order was passed beyond the time limit contemplated under section 158BE(1)(a) and annulled the entire block assessment order. The appeal of the assessee was allowed on this ground. Additional Considerations: - The Tribunal rejected the Revenue's argument that the period of 180 days should be excluded irrespective of the date fixed by the AO. - The Tribunal emphasized that the provisions of Chapter XIV-B, which contain a non obstante clause, should be strictly followed, and the analogy of section 153 Explanation 1(iii) cannot be extended to block assessments. Final Decision: The block assessment order dated 28-4-1997 was annulled as it was passed beyond the statutory time limit, and the appeal of the assessee was allowed.
|
