Block assessment and undisclosed income: income was excluded where the section 139(1) filing due date had not expired at search.

In a block assessment context, income could not be treated as undisclosed where the return-filing due date under section 139(1) had not expired on the date of search. The Tribunal's view was that the disputed income related to a period for which the assessee still had time to file the return, so it did not fall within the block assessment ambit as undisclosed income. On the Revenue's section 260A challenge, the High Court found no substantial question of law arising from the Tribunal's order and upheld the exclusion of the addition for the block period.

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Issues: Whether, in a block assessment proceeding, the Tribunal was right in holding that no undisclosed income could be brought to tax for the relevant period because the due date for filing the return under section 139(1) had not expired on the date of search, and whether any substantial question of law arose for consideration in the Revenue's appeal.

Analysis: The assessee's return for the assessment year in question was still within the extended time prescribed under section 139(1) when the search was conducted. The Tribunal accepted the assessee's stand that the income in dispute pertained to a period for which the return-filing date had not expired, and therefore it could not be treated as undisclosed income for the block assessment period. On the Revenue's challenge under section 260A, the Court found no substantial question of law arising from the Tribunal's order.

Conclusion: The finding that no undisclosed income was liable to be added for the block assessment period was upheld, and the Revenue's appeal was dismissed.

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