TaxTMI 
TaxTMI 
2011 (9) TMI 517
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.... of by the present judgment. 2.1 The appellant is a private limited company and is registered under the provisions of the Companies Act 1956. There was a search and seizure in the premises of one Brajesh Kumar, the Managing Director of the Company, on 23.11.2000. Documents related to transactions of the assessee company were found, seized, and marked SS-1 to SS-9. Proceedings for block assessment in terms of section 158BC, read with section 158BD of the Act, were initiated. During the course of block assessment proceeding, the assessee produced books of accounts for the block period. The learned assessing officer found that the books of accounts produced by the assessee were not proper and were incomplete. The bills and vouchers related to construction expenditure incurred by the assessee were not produced for the purpose of verification. The learned assessing officer ultimately dropped the proceedings under section 158BC, read with Section 158BD of the Act, for the block period 1.4.1990 to 23.11.2000, vide order dated 31.8.2004 (Annexure-1). Simultaneously he issued order dated 31.8.2004 (Annexure-1/2), whereby he initiated proceedings for income escaped assessment in terms of se....
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....upreme Court in the case of State of Gujarat v. Shantilal Mangaldas AIR 1969 SC 634. He also submits that once block period assessment takes place, then all other assessment proceedings merge into the same. He relies on the judgment in the case of Raja Ram Kulwant Rai v. Asstt. CIT [1997] 227 ITR 187/[1998] 98 Taxman 279 (Punj. & Har.). He next submits that, if the learned assessing officer was not satisfied by the books of accounts produced by the assessee, he ought to have followed the procedure prescribed under section 145(3), read with section 144 of the Act, after recording reasons. He also submits that the learned assessing officer has at one place in his order observed that the assessee produced the books of accounts which were unsatisfactory, whereas he has at another place observed that the books of accounts were not produced. He submits that the question of status of assessee has been confused by the learned assessing officer. He has described the appellant as a company, and also as a partnership firm. 4. The learned Assistant Standing Counsel submits that validity of search and seizure, or proceedings under section 158BC, read with section 158BD, are not under challenge....
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....ent of income? (ii) Whether the A.O. having treated the non-filing of the Return as the concealment of the income was justified in not making an assessment as provide by Chapter XIV B of the Act and adding those figures in Block Assessment? (iii) Whether the simultaneous action for re-assessment was validly initiated against the appellant who had not submitted any regular return under section 139 of the Income Tax Act, 1961 when the Block Assessment consisting of all those years was pending as the law provides that any re-assessment proceedings be started only after completion of earlier proceedings? (iv) Whether the failure to record the findings and the act of dropping the proceedings under section 158BD can mean or result in escapement of income liable to tax when all material facts were before the A.O. purportedly on basis of which he ultimately passed assessment order? (v) Whether on the facts and circumstances of this case it is clear that recorded reasons to believe escapement of income as disclosed in the order is based on mere change of opinion which cannot be the ground for re-assessment? (vi) Whether the onus being on the Department in ....
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.... the assessee, the proceeding was terminated. Such a situation was brought about by the conduct and complete lack of cooperation attributable to the assessee. The learned Assistant Standing Counsel has rightly relied on the Division Bench judgment of the Allahabad High Court in Chandra Prakash Agrawal (supra). Learned counsel for the appellant is not right in his submission that there was change of opinion on the self-same facts. Had the block-period assessment been concluded on merits, and thereafter best-judgment assessment been resorted to, the same may have given rise to a situation complained of by the appellant. On a perusal of the order of assessment, it is quite evident that the learned assessing officer had not disposed of the block-period assessment on merits, had decided to drop the same, and resorted to best-judgment assessment which is warranted in law. 8. Indeed in the present case, in view of complete non-cooperation on the part of the assessee, the learned assessing officer was left with no alternative but to resort to best-judgment assessment. The learned assessing officer relied on the materials which came on record during the block-assessment proceedings and dis....
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....ef Commissioner or Commissioner]; (b) ** ** ** (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question; Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which- (a) has not been determined by the Appellate Tribunal; or (b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on su....
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....t is a vital aspect of the matter and the appellant will have to make out a strong case of substantial question(s) of law to maintain this appeal. 13. Speaking on the scope of second appeal within the meaning of section 100 CPC, the Supreme Court has observed in the case of Santosh Hazari v. Purushottam Tiwari [2001] 3 SCC 179, that a point of law which admits of no two opinions may be a proposition of law, but cannot be a substantial question of law. To be substantial, a question of law must be debatable, not previously settled under law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, in so far as the rights of the parties before it are concerned 14. The Supreme Court has held in the case of M. Janardhana Rao v. Jt. CIT [2005] 2 SCC 324, that the conditions mentioned in section 260A of the Act must be strictly fulfilled in order to maintain appeal thereunder, otherwise the appeal would not be maintainable. The High Court must make every effort to distinguish between a question of law and a substantial question of law. In exercise of the powers under section 260A of the Act, the findings of facts of the Tri....