9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (4) TMI 458 - HC - Income TaxSearch and seizure- block assessment- The respondent-assessee has been engaged in the business of hire purchase, leasing of assets and intercorporate deposits, etc. Between January 3, 1997 and February 28, 1997 a search was conducted under section 132 of the Act by the Income tax Department in the premises of the assessee. During the said search certain incriminating documents were found which transpired that the assessee-company had not disclosed its true and correct income in its returns for the preceding assessment. Therefore, notices under section 158BC of the Act were issued on January 13, 1997 and July 10, 1997 against the respective assessees requiring them to submit the returns of income disclosing therein their true and correct income for the block assessment period. Assessee filed appeals before the Tribunal contending that the block assessment order were barred by limitation. The revenue challenged the maintainability of the appeals. Held that- allowing the appeals, the assessee ought to have filed these appeals against the order of the block assessment before the Commissioner (Appeals) and not before the Tribunal and the Tribunal has no jurisdiction to entertain the appeals and its order could not be allowed to sustain in law. Since the search was initiated in both the case after January 1 1997, under section 158(1)(b), the limitation for completion of block assessment under section 158BC was two years. Therefore, the block assessment orders passed against the assessee were within the period of limitation.
Issues Involved:
1. Jurisdiction of the Tribunal to entertain appeals against block assessment orders. 2. Limitation period for completion of block assessment under section 158BC of the Income-tax Act. Issue-wise Detailed Analysis: 1. Jurisdiction of the Tribunal to entertain appeals against block assessment orders: The appellant-Revenue challenged the Tribunal's jurisdiction to entertain appeals against block assessment orders. The Tribunal had held that it had jurisdiction because the search was initiated before January 1, 1997, and thus, appeals could lie to the Tribunal under section 253(1)(b) of the Income-tax Act. The Revenue contended that the search was initiated after January 1, 1997, and therefore, appeals should have been filed before the Commissioner of Income-tax (Appeals) under section 246A(1)(k). The court analyzed the relevant provisions: - Section 158BA(1) states that the Assessing Officer shall proceed to assess undisclosed income if a search is initiated after June 30, 1995. - Section 158BC outlines the procedure for block assessment, including serving notice and determining undisclosed income. - Section 158BE(1)(a) and (b) provides the time-limit for completion of block assessment, specifying one year for searches initiated before January 1, 1997, and two years for searches initiated on or after January 1, 1997. - Section 253(1)(b) allows appeals to the Tribunal for searches initiated before January 1, 1997, while section 246A(1)(k) provides for appeals to the Commissioner of Income-tax (Appeals) for searches initiated on or after January 1, 1997. The court concluded that the term "search initiated" means the commencement of the actual search, not merely the signing of the authorization. Therefore, the search was initiated on January 3, 1997, and January 8, 1997, when the officers entered the premises and began the search. Consequently, the Tribunal did not have jurisdiction, and appeals should have been filed before the Commissioner of Income-tax (Appeals). 2. Limitation period for completion of block assessment under section 158BC: The Tribunal had held that the block assessment orders were barred by limitation, applying a one-year period based on the assumption that the search was initiated before January 1, 1997. The Revenue argued that the search was initiated after January 1, 1997, and thus, the limitation period was two years. The court examined the provisions of section 158BE(1)(a) and (b), which set the limitation period for completing block assessments. Since the search was initiated on January 3, 1997, and January 8, 1997, the applicable limitation period was two years from the end of the month in which the last of the authorizations for the search was executed. The court concluded that the block assessment orders were passed within the two-year limitation period. Therefore, the Tribunal's finding that the orders were barred by limitation was incorrect. Conclusion: The court held that the Tribunal had no jurisdiction to entertain the appeals, and the block assessment orders were passed within the limitation period. Both substantial questions of law were answered in favor of the appellant-Revenue. The appeals were allowed, and the Tribunal's orders were set aside.
|
