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TMI Blog2013 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... t of block period, if it is attributable to the part of the accounting period of the year in which the search has been conducted, it is possible only of and only when the assessee has produced before the AO such of his books of account which are maintained in the normal course of business activity of the assessee, wherein is recorded the entries indicating the generation of income to the part of the accounting period and then only to exclude that part of the income from that segment of accounting period and allow the assessee to file a return excluding the income in the later assessment and not otherwise. In the present case, the assessee never made any offer for bringing to the notice of the Assessing Officer such a possibility by producing relevant material and in fact we find that the assessee is not even informed about the activity to the Revenue - Therefore this appeal is to be allowed against the order of the Appellate Tribunal being without any rhyme or reason and not in consonance with the statutory provisions and not even in consonance with the material on record - In favour of the Revenue - ITA NO 2760/05 - - - Dated:- 13-9-2010 - SHYLENDRA KUMAR D. V. and KEMP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee admitted the loan transaction and that he had in fact advanced Rs. 50 lakhs to the said Balakrishna. 5. It appears, during the search, the officials of the Department found that the assessee also had business premises at No. 369/54, 80 Feet Road, Rajaji-nagar, Bangalore, and for gathering better information, had conducted a survey of this premises, in exercise of the power conferred under section 133A of the Act and found that the business was being carried at that premises under the name and style of Mahaveer Jewellery and Bankers. This survey under section 133A at the business premises of the assessee the consequence of the search under section 132, which had been conducted at the residential premises of the assessee, though the survey, it appears, had followed immediately on the heels of the search. 6. It appears, the assessee, much later filed a return of income for the assessment year 1999-2000 and had claimed that the said Rs. 50 lakhs was the income of the accounting period April 1, 1999, to March 31, 2000. As a sequel to the search of the residential premises of the assessee on July 19, 1999, the officials of the Department followed up the matter by issuing a not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search had taken place on July 19, 1999, and a substantial part of the accounting period was still ahead, i.e., up to March 31, 2000, and the assessee could have earned considerable income and whereafter alone the assessee could have filed the return of income for the assessment year 1999-2000 and, therefore, bringing to tax some part of the income of this accounting period, i.e., from April 1, 1999, to July 19, 1999, alone was permissible for the block assessment and with the specific case of the assessee being that the income out of Rs. 50 lakhs for this period, a sum of Rs. 1,26,100 should have been assessed for the regular assessment year 1999-2000 and the Assessing Officer and the Appellate Commissioner having not chosen to action in accordance with this claim of the assessee, the Tribunal should allow the appeal. 11. It is this contention of the assessee which found favour with the Tribunal and the Tribunal has, therefore, allowed the appeal of the assessee, reversed the orders of the Assessing Officer and the Appellate Commissioner and has directed the Assessing Officer to proceed on the basis of the return filed by the assessee. 12. It is now the Revenue's turn to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory provisions as stand now are as if they were on the statute book since the inception, i.e., since the introduction of Chapter XIV-B into the Act, but have also misunderstood the definition of the phrases "undisclosed income" and the "block period" in section 158B of the Act and the undisclosed income as found in clause (b) of section 158B of the Act. Section 158B of the Act reads as under : "158B. Definitions.-In this Chapter, unless the context otherwise requires,- (a) 'block period' means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted under section 132 or any requisition was made under section 132A and also includes the period up to the date of the commencement of such search or date of such requisition in the previous year in which the said search was conducted or requi-sition was made : Provided that where the search is initiated or the requisition is made before the 1st day of June, 2001, the provisions of this clause shall have effect as if for the words, 'six assessment years', the words, 'ten assessment years' had been substituted ; (b) 'undisclosed income' include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso been taken through the statutory provisions with some detail by Sri Seshachala. 20. We find that the object of introducing Chapter XIV-B into the statute book is to ensure that the need for invoking reopening provision, viz., section 147 of the Act and a limitation placed therein are all in the interests of the Revenue, as, perhaps, the Legislature in its experience and wisdom had thought it fit that the recourse to the provision of section 147 of the Act had only encouraged dishonest assessees and was also counter productive for the Revenue and the purpose of providing a degree of protection to honest assessees, who had already filed their returns of income and also not to keep tinkering with the concluded assessment, have all been over a period, fully taken advantage of by unscrupulous, evasive assessees making illegal gains at the cost of the Revenue and at the cost of the society and, therefore, in our opinion, the provisions of Chapter XIV-B call for a strict construction and not to either vaguely or loosely relieve an erring assessee from the rigour of these statutory provisions. 21. If an undisclosed income is found to attract the provisions of Chapter XIV-B, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting period and allow the assessee to file a return excluding the income in the later assessment and not otherwise. As is rightly submitted by Sri Seshachala, in the present case, the assessee never made any offer for bringing to the notice of the Assessing Officer such a possibility by pro-ducing relevant material and in fact we find that the assessee is not even informed about the activity to the Revenue. No other question arises. Therefore, this appeal is to be allowed against the order of the Appellate Tribunal being without any rhyme or reason and not in consonance with the statutory provisions and not even in consonance with the material on record, but being one passed more in confusion and misunderstanding of the facts and law and is set aside and the order passed by the Assessing Officer as confirmed by the Appellate Commissioner is restored and affirmed. 25. We cannot avoid observing that of late the quality of orders that are come out from the Tribunal in exercise of its appellate power under section 256 of the Act are found to be wanting and in many respect and many a times the orders are very prefecture, even non-speaking orders and has no correlation to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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