TaxTMI 
TaxTMI 
2011 (9) TMI 132
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.... of the Act was in accordance with law as the information, that there is falsity in the disclosed material by the Assessee was brought to the notice of the A.O. at a later stage. The Income Tax Appellate Tribunal thus also erred in holding that A.O. could initiate proceedings only u/s 158BD of the Act and not under section 148 (1) of the Act. 3. The appellant craves to add, delete or modify any ground(s) either before or during the pendency of this appeal, with the permission of the Hon'ble Court." The brief facts of the case are that the Respondent- Assessee Company is engaged in the business of construction of building. For the assessment year (1993-94) under consideration, an original assessment was completed under section 143(3) of the Income Tax Act (hereinafter referred to as the Act). The original assessment completed on 27.03.1996 on an income of Rs. 2,66,080910/- as against the loss of Rs. 3,91,500/- disclosed by the assessee in his return, but the return was revised on 30.09.1996 at an income of Rs. 26,764/- after giving appeal effect to CIT(A)'s order dated 12.08.1996, which was further revised u/s 154 to NIL income. In the meantime, a search & seizure opera....
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....total payment of Rs. 13 lacs to the assesse, whereas the cost was shown only for Rs. 5.98 lacs for flat area 1497.02 sq.ft. in the "Shree Ram Tower". Sri D.D.Chopra, learned counsel for the appellant further submits that section 158 BD of the Income Tax Act, 1961 is some what analogous to section 147 of the said Act in so far as the procedure that is required to be followed. Section 147 of the Act contemplates that if the Assessing Officer has reason to believe that there is statement of income, then notice can be issued under section 148 of the Act. So far as section 158 BD of the Act is concerned, the Assessing Officer has to be satisfied that there is undisclosed income. Upon such satisfaction, the Assessing Officer is required to forward the relevant document, papers, etc., to the Assessing Officer who is required to assess the person in respect of whom the undisclosed income has been discovered. For this purpose, he relied on the ratio laid down in the case of Janki Exports International Vs. Union of India, 278 ITR 296 (Delhi). According to him, proceedings under section 147 of the Act are initiated if the Assessing Officer has reasons to believe that there is escapement of i....
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.... already took a view that material in question was found during the course of search and seizure operation in the case of Ashok Kumar, so the A.O. was obliged to take action by initiating the proceedings under section 158 BD, and not under section 147. He read out section 158 BD of the Income Tax Act, which reproduced here as under:- "Undisclosed income of any other person. 158 BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect of whom documents or any assets were requisitioned under section 132 or whose books of account or other of account, other documents or any assets were requisitioned under section 132A, then the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed [under section 158BC] against such other person and the provisions of this Chapter shall apply accordingly." During the course of search and seizure action in the case of a person who is subjected to search under section 132 or 132(2A) and in the course of such search the Assessing Officer i....
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....nd also without giving any arguments on the merits of the addition as none of the authorities have dealt the issue. Lastly he made a request that the impugned order passed by the Tribunal may kindly be upheld. We have heard both the parties at length and gone through the material available on record. The only issue as per admitted "substantial question of law" is that whether on the facts and circumstances of the case, provision of section 158 BD or provision of reopening of assessment under section 147 will apply ? In the case of Janki Exports International (supra), it was held that section 158 BD is analogous to section 147 regarding the procedure to be followed in the instant case. No action was taken by the Department under section 158 BD within the prescribed stipulated period, so the A.O. has taken the action under sections 147/148 of the Income Tax Act. It may be mentioned that the basic idea in the Act is that the entire income of an assessee assessable in respect of a particular assessment year should be made the subject of one single assessment made on him for that year. Income which is assessable in one assessment year cannot be brought to tax in another assessment ....
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....ion-2 of section 147, accordingly, the following shall be deemed to be cases of income escaping assessment: (a) where no return of income has been furnished by the assessee, although the total income is above the taxable limit; (b) where a return of income has been furnished, but no assessment has been made, i.e., in a non-scrutiny case, if the assessee is found to have understated his income or claimed excessive loss, deduction, allowance or relief in the return; (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under the Act, or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed. The Hon'ble Supreme Court in the case of Jaganmohan Rao (1970) 75 ITR 373 observed that even the case where the Assessing Officer erroneously fail to take the certain part of income can be a case where the said part of the income has escaped assessment. In the instant case, the original assessment was made on 27.03.1996. The CIT(A) vide order dated 12.08.1996 set asi....