9911796707
TMI Blog2010 (11) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... I , REVA KHETRAPAL ,JJ. Appellant represented by:Mr. N.P. Sahni, Advocate. Respondent represented:Mr. Ajay Vohra, Ms. Kavita Jha, Ms. Akansha Aggarwal, Mr. Somnath Shukla, A.K. SIKRI, J. 1. In all these appeals, common question of law arises for determination. The question of law which was framed in ITA 811/2007 runs as follows:- "Whether on the facts of the present case, the Tribunal was justified in law in deleting the addition of Rs.8,67,010 made as undisclosed income of the assessee for assessment year 1999-2000 under Section 158BC of the Act?" 2. Except the difference of amount which is deleted in other cases, the question of law is identical. Therefore, we are proceedings to discuss the question of law on the basis of facts appearing in ITA 811/2007. Record of factual matrix does not need a large canvas. Succinctly stated, the facts are that on 13th January, 2000, a search and seizure operation was carried out on Shyam Telecom Group of Companies (to which these assessee group of companies belonged). There was no specific search warrant in the name of the assessee company. However, according to the department, since the papers relating to the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to file the income tax return on or before the due date in the prescribed from and verified in the prescribed manner. (2) After the return is filed, for the purpose of making assessment, the Assessing Officer may serve notice under Section 142 (1) of the Act. However, if it is found that such a person has not made a return within the time allowed under sub Section (1) of Section 138, Clause (i) of sub Section (1) of Section 142 of the Act authorizes the Assessing Officer to serve a notice regarding such defaulting person to furnish a return of his income by the dates specified therein. If the return is not filed within the time allowed under Section 131 (1) or under a notice issued under Section (1) of Section 142, such person may still furnish the return of previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. 5. Chapter-XIV B of the Act, which was inserted by the Finance Act, 1995 w.e.f. 1st July, 1995 deals with said procedure for assessment of search cases and it starts with Section 158B which provides certain definitions for the said Chapter. Clause (a) there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act on the basis of seized documents, as if no return was filed. The contention of the assessee that income may be treated as disclosed was not accepted on the basis of the following discussion:- "I do not agree with the submission made by the assessee. A provision contained in a section under any chapter cannot be interpreted in isolation, rather it should be interpreted keeping in mind all other provisions of that chapter. Provisions of section 158B are contained in Chapter XIV-B which also contains section 158 BA and 158 BB. Section 158 BA lays down procedure for assessment of undisclosed income as a result of search. The section starts with the words "Notwithstanding anything contained in any other provisions of this Act . the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter". Section 158 BB gives the procedure for computation of undisclosed income of the block period and is also contained in Chapter XIV-B. As per Section 158 BA therefore, the provisions of section 158 BB have to be applied for computation of undisclosed income. I will like to quote the decision of the Hon‟ble Calcutta High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the assessee would not have disclosed such amounts in the return to be filed, for which the period had not expired, it was observed as under: "At the time of hearing, ld. AR for the assessee while taking us through the paper books demonstrated that the shares in question which were sold was already disclosed to the department prior to the date of search. The assessee earned capital gain which was reflected in the balance sheet as on 31.3.1998 and that the said balance sheet was filed with the department alongwith the return of income for the AY 1998-99. Acknowledgement for filing of the return of income for the AY 1998-99 on 30th December, 1999 has been filed at page 39 of the paper book. In the circumstances, we are of the considered opinion that when the investment in shares in question on which capital gain was realized by the assessee had been shown I the balance sheet filed by the assessee, prior to the date of search, it cannot be assumed that capital gain derived on the sale of such shares would have been shown by the assessee. In the above circumstances, in view of the order of the Delhi High Court in the case of CIT Vs Mrs. Kumkum Kohli, 276 ITR 589 (Del) (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h had taken place on 23rd Feb., 1996, but for the asst. yr. 1995-96 even though the assessee had not filed the return, it had paid advance tax of Rs. 4,80,000 in three instalments on 15th Sept., 1994, 12th Dec., 1994 and 15th March, 1995 much before search and the Division Bench accordingly held that the income of the assessee in that case cannot be treated to be as 'undisclosed income' for the purpose of assessment under Chapter XIV-B of the Act. But, in the present case, the search took place on 20th Dec., 1996 and there was no material to show that before 20th Dec., 1.996 the appellant had in any manner disclosed his income to the authorities under the Act. Thus, even if we accept the contention of Mr. Chaphekar learned senior counsel, that Sub-section (3) of Section 158BA of the Act is not exhaustive of the cases in which income should not be treated as undisclosed income, in the present case, we find no material to establish that the appellant had, in any manner, disclosed his income for the purpose of the Act before the date of search on 20th Dec., 1996. 12. Before Madras High Court, the issue cropped up, albeit in other context where the provisions and constitutionality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational and non-arbitrary manner, the assessees further in relation to their conduct. Parliament can legislate with respect to the assessees who comply with the requirements of law and extend such concessions as it deems fit to such assessees, which concessions it may choose to deny to those who have violated the law and such violations have been established by reason of the action taken by the authorities. It is in that background and with the object of laying down a special procedure for the assessment of the assessees who fail to comply with the law by not disclosing in full their taxable income and by not paying the taxes properly due from them that Chapter XIV-B consisting of sections 158B 158BH was inserted in the Income-tax Act by the Finance Act, 1995, with effect from July 1, 1995. The assumption made in the scheme of the Act that a person who comes forward with the return or with further information after a search, does so only on account of the detection already effected under the search and the likelihood of further exposure is a reasonable assumption and it can in no way be regarded as arbitrary. The special procedure provided in Chapter XIV-B is meant to apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
