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TMI Blog2002 (9) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in exercise of power vested in him under the provisions of section 142(2A) of the Act, appointed one Shri P.P. Maitra, Chartered Accountant as Auditor to audit the accounts of the assessee for the block assessment years 1986-87 to 1995-96. This was done by the Assessing Officer vide his letter dated 1-10-1996 addressed to the auditor. The said letter further directs that the auditor shall audit and submit the audit report to the Assessing Officer by 20-2-1997 positively. The auditor however carried out the audit and gave his report dated 9-4-1997 to the Assessing Officer. The case of the assessee is that in terms of section 158BE(1)(a) the time limit for completion of block assessment is one year from the end of the month in which the last of the authorizations for search under section 132 was executed. It is not in dispute that the search was completed on 20-10-1995 which is the starting point of time for the purpose of computing the period of limitation. The terminal point in terms of section 158BE(1)(a) would be 1 year from the end of the month October, 1995, i.e. on or before 30-10-1996. The block assessment order had been passed on 28-4-1997. It is not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the provisions of section 142(2C) are mandatory and nothing can be inferred or left to the discretion of the Assessing Officer. 9. The learned D.R. while relying on the order of the Assessing Officer also drew out attention to the provisions of section 153 of the Act which prescribes the period of limitation for completion of assessments and reassessments. She referred to Explanation 1(iii) of the said section which excludes the period during which the assessee was directed to obtain audit report in terms of section 142(2A) is to be excluded. Explanation 1(iii) reads as follows : 'the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section.' 10. Her submission was that the use of the word 'last day on which the assessee is required to furnish a report of such audit' only refers to the period of 180 days as contemplated under sub-section (2C) of section 142. She submitted that on the same principles Explanation 1 of section 158BE is to be interpreted, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equisitioned on or after the 1st day of January, 1997. Explanation 1 : In computing the period of limitation for the purposes of this section, the period - (i) during which the assessment proceeding is stayed by an order or injunction of any court, or (ii) commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section, shall be excluded. Explanation 2 : For the removal of doubts, it is hereby declared that the authorisation referred to in sub-section (1) shall be deemed to have been executed, (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipts of the books of account or other documents or assets by the Authorised Officer. 12. It is not in dispute that the provisions of section 158BE(1)(a) applies to the present case as the search was conducted on 20-10-1995. The period to be exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner or Commissioner (which determination shall be final) and paid by the assessee and in default of such payment, shall be recoverable from the assessee in the manner provided in Chapter XVII-D for the recovery of arrears of tax. (3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any enquiry under sub-section (2) or any audit under sub-section (2A) and proposed to be utilised for the purpose of the assessment. (4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. 13. A reading of sub-section (2A) would show that the Assessing Officer is required to direct the assessee to obtain an audit report within a specified time having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 142(2A) should be applied in its undiluted form, disregarding the consequences. A reading of provisions of section 142(2C) would also suggest that the assessee shall obtain the audit report within the period originally fixed. Extension of time is allowed only on an application by the assessee in this regard and only when the assessee shows good and sufficient cause. Even under such circumstance the maximum period including the originally period and the extended period cannot extend beyond 180 days from the date on which the assessee receives direction in this regard from the Assessing Officer. Admittedly in this case the audit report was originally directed to be filed on or before 20-2-1997 but no extension of time was either sought by the assessee or the Assessing Officer had not extended the period within which the audit report was to be furnished. Now we shall revert to the provisions of section 158BE Explanation 1(ii) under which the period to be excluded is only the commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited and the ending on the day on which the assessee is required to furnish a report of such audit. As we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be decided only on the express provisions as contained in Chapter XIV-B of the Act relating to block assessments. Section 158BA(1) contains a non obstante clause which states that notwithstanding anything contained in any other provision of the Act, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of Chapter XIV-B. Due to the operation of the non obstante clause, this exclusion of time by extending the Analogy of section 153 Explanation 1(iii) is not possible in cases of block assessment. The wordings of Explanation 1(ii) of section 158BE and Explanation 1(iii) of section 153 are also not in pari materia the same. The conclusion that one can draw on a plain reading of section 153 Explanation 1(iii) in our view is that the period as fixed under section 142(2A) alone needs to be excluded and not a period of 180 days referred to in section 142(2C). For all these reasons we are unable to accept the argument of the learned D.R. For the reasons stated above the appeal of the assessee is allowed on this ground of appeal. [Part of para 15 and para 16 are not reproduced here as it involve minor issues.] - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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