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TMI Blog2004 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... merit in his contention that the said amount shall not be treated as the undisclosed income for the year 1996-97 – appeals dismissed - - - - - Dated:- 21-12-2004 - Judge(s) : P. R. RAMAN., C. N. RAMACHANDRAN NAIR. JUDGMENT The judgment of the court was delivered by P.R. Raman J. - All these appeals raise common questions of fact and law and hence are disposed of by this common judgment. For the purpose of convenience, I.T.A. No. 283 of 2002 is taken as the leading case in which the arguments are addressed. This appeal arises under the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The assessment relates to a block period of ten years 1986-87 to 1996-97 and assessment was made in accordance with section 158BC read with section 158BD of the Act. The subject-matter relates mainly to the legality and validity of the said block assessment of undisclosed income on the ground that there was no search on the assessee but search was on another person. The appellants are the sons of one Kader Haji who being an assessee and resident of Mercara was within the jurisdiction of the income-tax authorities in Koorg District in Karnataka State. The appellants, on the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment has been made by the same Assessing Officer who has assessed and completed the assessment of the late Kader Haji, the father of the appellants. It was contended that the appellant in I.T.A. No. 283 of 2002-Mohammed Salim was assessed at Kannur and an order was passed under section 158BC(c) read with section 158BD which was without jurisdiction. The Tribunal noticed that the assessee has been previously assessed to tax at Kannur. The Tribunal found in paragraph 8 that except making a claim that the assessee was previously assessed to tax at Kannur, no evidence whatsoever has been furnished to substantiate the same. It was contended that for the year 1996-97 the capital gain of Rs. 3,53,969 should not be included as undisclosed income, that being the income relating to the part of the year for which previous year has not ended. The Tribunal, however, overruled these contentions and upheld the assessments granting some marginal relief. Annexure B is the order of the Tribunal. The appellants aggrieved thereby preferred these income-tax appeals invoking section 260A(2)(c) of the Income-tax Act. According to the appellant the following substantial questions of law arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the contentions raised, it will be useful to refer to the relevant section which is extracted hereunder: "158BC. Procedure for block assessment. - Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then, - (a) the Assessing Officer shall- (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of subsection (1) of section 142, setting forth his total income including the undisclosed income for the block period: Provided that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has jurisdiction over the appellant and other sons. In this case, the Chief Commissioner of Income-tax by exercise of his power under section 127 of the Income-tax Act, transferred the file in the case of Kader Haji, the father of the appellants to the Assistant Commissioner of Income-tax at Calicut. The Commissioner of Income-tax, Kochi, transferred the case of the assessees also to the same officer and as a result, the same Assessing Officer, by virtue of the transfers under section 127 and section 158BD made assessments of Kader Haji the father of the appellants as well as that of the appellants. The case of Kader Haji came up for consideration before this court in [2004] 268 ITR 465. The question considered was whether the block assessment under Chapter XIV-B would fall within the meaning of "case" in the Explanation to section 127 enabling the Chief Commissioner of Income-tax to transfer the block assessment to a subordinate officer? It was noticed that Kader Haji who expired and is represented by his son in appeal was on the rolls of the Income-tax Officer, Ward-I, Mercara. It was further found that Kader Haji-the original assessee was a timber merchant having business i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in Chapter XIV-B is different from a regular assessment and different from "proceedings" under the Act in respect of any year, as mentioned in the Explanation. This court considered the meaning and scope of block assessment and the reasons for introduction of Chapter XIV-B dealing with the special procedure for assessment of search cases. It was contended on behalf of the assessee drawing a distinction between the case relating to block assessment, stressing on the word "any case" and the words "in respect of" and the expression "any year" that the expression "case" would take in only with regard to case relating to a particular period and not regarding any block period. After referring to the various case law on the subject and after referring to relevant provisions in the statute, this court held that the expressions "any year" and "any case" exclude limitation or qualification, which points in a distributive construction. Considering the object and purpose of section 127 and to facilitate effective and coordinate investigation, the Explanation to section 127 has to be liberally construed and therefore "block assessment" would fall within the expression "case" enabling the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Haji v. CIT [2004] 268 ITR 465 as referred to above. We are in complete agreement with the said judgment. Even though it was contended that the assessment has not been made based on net wealth statement no such question was raised at any point of time before the Tribunal or before the officer concerned. The only argument raised was that a block assessment cannot be made by the same officer to whom the case was transferred under section 127. Only if a question is raised and left undecided by the Tribunal, could a situation arise to consider whether the matter required to be remanded. We do not find any such situation arising for consideration in the case on hand. As regards the capital gains of an amount of Rs. 1,81,000 the Tribunal found that the assessee, along with his brothers and father sold 1.75 acres of land for a consideration of Rs. 57,75,000. The land belonged to them jointly and each of the sharers had got 1/8th share. The Assessing Officer rejected the claim regarding the income for the year 1996-97 for which the previous year had not ended on the date of the search, holding that a notice under section 158BD was served on the assessee only by January 1998, and u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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