Block assessment requires search-based evidence of concealment; belated return filing alone does not make disclosed income undisclosed.

Income already disclosed through receipts subject to tax deduction at source and advance tax could not be assessed as undisclosed income in block assessment absent any search material showing concealment. The Tribunal noted that Chapter XIVB is confined to income found as a result of search, and no seized material supported the addition. The fact that the return was filed after the due date did not, by itself, convert disclosed income into undisclosed income, especially where the same income was also assessed in regular proceedings under section 143(3). The deletion of the addition was therefore upheld.

---

---

Issues: Whether income for the assessment year 1998-99, represented by dividend, interest, directors' fees and similar receipts, could be treated as undisclosed income in block assessment merely because the return was filed after the due date, in the absence of any search material showing concealment.

Analysis: The income in question had already formed part of the assessee's disclosed receipts and was subjected to tax deducted at source and advance tax. The block assessment under Chapter XIVB was intended to tax undisclosed income found as a result of search, and the Assessing Officer relied on no material recovered in the search to support the addition. The same income was also taken in regular assessment under section 143(3), which reinforced that it was not income unearthed as a result of search. Mere belated filing of the return did not, by itself, convert otherwise disclosed income into undisclosed income for block assessment.

Conclusion: The addition as undisclosed income was not sustainable, and the deletion made by the appellate authority was in law; the finding was in favour of the assessee.

Final Conclusion: Income already disclosed and assessable in regular proceedings cannot be brought to tax as undisclosed income in block assessment without search-based material showing concealment.

Ratio Decidendi: For block assessment, only income detected through search material as undisclosed income can be assessed, and income already disclosed or assessable in regular assessment cannot be treated as undisclosed merely because the return was filed after the due date.

---