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TMI Blog2013 (11) TMI 1776X X X X Extracts X X X X X X X X Extracts X X X X ..... on 139(1) of the Act had not yet expired on the date of search. Subsequently, the second search was conducted in the premises of the assessees on 27-4-2001. As the assessees did not file the return under section 139(1) of the Act disclosing the aforesaid amounts, he treated it as an undisclosed income and assessed as such for the assessment year 2000-01 relating to the previous year 1999-2000. 3. The assessees contended that the said amounts were reflected in the books of accounts. During the first search as the due date prescribed for filing a return had not expired and that he had filed a return under section 139(4) disclosing the said amounts, it would not constitute undisclosed income. The said contention was negatived by the assessing authority on the ground that though due date for filing of the return under section 139(4) had not expired as on the date when the second search was conducted after the due date for filing section 139(1) return is over, it constitutes an undisclosed income. Even if he had filed return under section 139(4) before the second search, he cannot be granted the benefit. But as the return under section 139(4) is filed after the second search, it part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r such procedure. Section 132A deals with power to requisitioning the books of accounts. Chapter XIV-B is a special procedure for assessment of such case. Section 158B defines what a block period is, as well as undisclosed income . Section 158BB dealing with undisclosed income reads as under : 158BB. Computation of undisclosed income of the block period.--(1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the assessing officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,-- (a) where assessments under section 143 or section 144 or section 147 have been concluded prior to the date of commencement of the search or the date of requisition, on the basis of such assessments; (b) where returns of income hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbed depreciation under sub-section (2) of section 32; (b) of a firm, returned income and total income assessed for each of the previous years falling within the block period shall be the income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called to any partner not being a working partner : Provided that undisclosed income of the firm so determined shall not be chargeable to tax in the hands of the partners, whether on allocation or on account of enhancement; (c) assessment under section 143 includes determination of income under sub-section (1) or sub-section (IB) of section 143. (2) In computing the undisclosed income of the block period, the provisions of sections 68, 69, 69A, 69B and 69C shall, so far as may be, apply and references to financial year in those sections shall be construed as references to the relevant previous year falling in the block period including the previous year ending with the date of search or of the requisition. (3) The burden of proving to the satisfaction of the assessing officer that any undisclosed income had already been dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee since in concluding that an assessee would or would not have disclosed income, one is ipso facto making a statement with respect to whether or not the assessee possessed the intention to do the same. To gauge this, however, reliance must be placed on the surrounding facts and circumstances of the case. Therefore, it is clear that an undisclosed income is not (sic) an income which has not been or would not have been disclosed for the purpose of the Act. 8. Generally, the income is disclosed in the books of accounts if it is maintained and thereafter, a return is filed under the provision of the Act and if the said income is disclosed in said return it is disclosed income. If an income is not disclosed in the books of accounts nor it is disclosed in the returns filed, generally, it could be treated as an undisclosed income. Accordingly, under section 139(1) of the Act every person who is assessable under the Act, must file a return declaring his or her total income during the previous year on or before the due date. Hence, the disclosure of income is the disclosure of the total income in a valid return under section 139 of the Act. Section 139(1) of the Act reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : Provided that where the return relates to a previous year relevant to the assessment year commencing on the 1-4-1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year. Sub-section (5) of section 139 of the Act also provides for filing of a revised return, if the return filed under section 139(1) of the Act has any omission or wrong statement. The said provision reads as under : Section 139(5) : If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) of the Act deals with, where the due date for filing the return has expired but no return of income has been filed. Firstly, on the basis of the entries as recorded in the books of accounts before the due date of search for any previous year falling under the block period. Secondly, on the basis of the entries as recorded in the books of accounts when such income does not exceed the maximum amount which is not chargeable to tax under the block period. Thirdly, where no return of income has been filed as nil before the due date of filing of the return has expired. Fourthly, where the previous year has not ended or the date of filing return under section 139(1) of the Act has not expired. They have brought in clause (3) as (d) nothing beyond that. In the books of accounts, those entries are recorded on or before the due date of search or requisition relating to the previous years. 10. Therefore, a reading of the aforesaid provisions makes it clear that an undisclosed income is one : (a) which is not disclosed in the return of income filed either under section 139(1) or 139(4) of the Act. (b) the income not recorded in the books of account before the search, even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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