TaxTMI 
TaxTMI 
2017 (7) TMI 107
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....ourse of the search, books of account, documents and cash of Rs. 25,00,000/- were seized. At that time statements of the assessee and his various family members were also recorded. (b) On 17.04.2001 a notice was issued (served on 27.04.2001) to the appellant under Section 158-BC of the Act. The above notice dated 17.04.2001 called upon the appellant to file his return for undisclosed income of the block period i.e. 01.04.1990 to 04.08.2000 on or before 26.05.2001. (c) On 09.05.2001 the appellant sought copies of the statement recorded during the search as well as xerox copies of the entire seized documents as recorded in the panchanama. However, as the same was not furnished, the appellant by another letter dated 24.05.2001, once again requested the xerox copies of the documents seized and statements recorded so as to enable him to file his return of income. The appellant also sought inspection of the record as early as possible to enable him to prepare his return of income. (d) Inspite of the aforesaid request, no copies of the documents seized and/or statements recorded were furnished to the appellant. However, on 03.01.2002 partial inspection of the documents seized, i.....
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.... explanation offered was not found acceptable. Further the impugned order holds that the charging of interest under Section 158-BFA(1) of the Act is mandatory and there is no discretion available with the Assessing Officer not to charge interest. Thus, the impugned order dated 16.06.2006 dismissed the appeal of the appellant-assessee. 4. Being aggrieved, the appellant-assessee is in appeal before us. 5. Before dealing with the rival submissions, we may usefully reproduce Section 158-BFA (1) of the Act as in force during the relevant time:- "158BFA(1) - Where the return of total income including undisclosed income for the block period, in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132A on or after the 1st day of January, 1997, as required by a notice under clause(a) of section 158BC, is furnished after the expiry of the period specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one percent of the tax on undisclosed income, determined under clause (c) of Section 158BC, for every month or part of a month comprised in the period commen....
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....,00,000/- which was seized cannot be adjusted against the tax determined for the purposes of non levy of interest. This is so as the tax was determined only on passing of the Assessment order and prior thereto the seized amount is with the Revenue only in trust. In the above view, it was submitted that the appeal may be dismissed. 8. We have considered the rival submissions. Section 158-BFA(1) of the Act clearly provides that where the return of undisclosed income for the block period consequent to a search is not furnished within the time specified in the notice issued under Section 158BC of the Act, the assessee is liable to pay simple interest on the tax determined under Section 158BC(c) of the Act on the undisclosed income. This simple interest is charged at one percent for every month commencing from the period of the expiry of the time to file a return as specified in Section 158BC notice till the date of filing of the return. 9. Thus, the tax on the undisclosed income is determined only on an assessment order being passed under Section 158BC(c) of the Act. Therefore, any amount which may have been seized prior thereto, cannot be adjusted against a demand to be ascertai....
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....est, no copies of the documents seized and/or statements recorded were furnished to the appellant. However, on 03.01.2002 an inspection of the seized documents was given to the appellant. Immediately thereafter on 26.02.2002 the appellant filed his return of income. It is an accepted position as recorded in the impugned order that the return of income was on an estimated basis. It was in the aforesaid circumstances that the appellant submits that no interest should be charged under Section 158BFA(1) of the Act, as the delay in filing the return was entirely due to the respondent. However, the impugned order disbelieves the aforesaid explanation for the delay offered by the appellant on the ground that the same is not acceptable as the return of income has been filed even though the copies of the documents and account books and statements which were seized, were never furnished to the appellant, till the date he filed his return of income. However, this finding to our mind, overlooks the fact that the return was filed after inspection was given to the appellant-assessee on 03.01.2002. Therefore, it is on the basis of the inspection given to the appellant that the return of income wa....
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....ature......................................................... ............................................. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction." Therefore, where law and equity can both be reconciled to achieve justice , then the same should be attempted and achieved For after all they are not enemies. 12. In fact Mr. Thakar, learned counsel for the appellant placed reliance upon the decision of the Delhi High Court in Commissioner of Income-tax .vs. Mesco Airlines Ltd. - (2010) 327 ITR 554 (Delhi) and decision of the Karnataka High Court in Commissioner of Income Tax and another .vs. B. Nagendra Baliga- (2014) 363 ITR 0410 (Karn), where both the Courts have taken a view that where there is a delay in filing the return of income which is attributable to the revenue in not having supplied documents sought for, then the period attributable to that delay ought to be excluded. In both the aforesaid cases, the Assessing Officer had delayed to furnish necessary documents seiz....