TaxTMI 
TaxTMI 
2018 (12) TMI 1517
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....found it to be inclusive of professional income ? (ii) Whether the reassessment initiated after four years could be sustained, since the block assessment was under section 158BC read with section 143(3) ; and the bank transactions were available with the Assessing Officer before the period of four years from the last date of the assessment year expired ?" 2. On facts, it has to be noticed that there was a search under section 132 of the Income-tax Act conducted on November 16, 2000, in the residential premises of the assessee at Thiruvananthapuram. The details of professional and other transactions as also bank accounts were found at the time of search. A notice under section 158BC dated January 18, 2001 was issued, in response to which the assessee filed a return declaring no undisclosed income. The assessee also filed cash flow statements and copies of computation statements on November 8, 2002. In the meanwhile, the statements relating to the bank accounts, with Bharat Overseas Bank, Oriental Bank of Commerce and Lord Krishna Bank, all from branches at Thiruvananthapuram, were obtained from the respective branches. On the basis of these documents recovered and the post search....
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....e quantum for two years and that for one year was maintained at that available as per the returns. 5. The learned counsel appearing for the appellant-assessee would argue that the order passed at annexure-B on reassessment is merely on a change of opinion. The entire facts as disclosed in the assessment under section 158BC read with section 143(3) indicates the Assessing Officer being in possession of such details and the assessee also having been intimated the proposal to treat the credits in bank accounts as professional receipts. Certain explanations offered were found to be satisfactory and eventually the amounts credited in the bank accounts were treated as inclusive of professional income. Only unaccounted investments made by the assessee were treated as unaccounted professional receipts, liable to be assessed under the Act. Annexure-B an order passed under section 148, hence, is on a mere change of opinion by the next incumbent officer in the office of the Assistant Commissioner of Income-tax, Central Circle, Thiruvananthapuram. It is argued that the order passed at annexure-B though within the six-year period, was after the expiry of four years and hence there should have ....
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.... the bank accounts were not proposed for the purpose of determining the undisclosed income at the first stage after the search was conducted. Nor can it be said that the Assessing Officer, at that point, had consciously not looked into the bank details for reason of the materials discovered on post-search enquiry, being not possible of reliance, in an assessment under section 158BC. This is a mere opinion expressed by the next incumbent officer to justify initiation of proceedings under section 148. If the Assessing Officer who carried out the assessment as per annexure-A was of such opinion, definitely after detailed consideration of the credits in the bank accounts and the explanation offered by the officer ; it would have been so recited in the order. Further, it cannot but be observed that even if the bank accounts could not be taken for the block assessment; there was nothing stopping the Assessing Officer from initiating a proceeding under section 148 at that stage itself. We observe so despite the fact that we are not convinced that the bank details were obtained postsearch ; only since section 148 is initiated on the sole premise that the bank details were obtained post-sea....
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....ssee. There was, hence, a conscious decision not to determine the undisclosed income taking into account the credits in the bank accounts. This is revealed from the following statement made by the Assessing Officer in the block assessment : "The amounts credited in the bank accounts are, therefore, treated as inclusive of professional income of the assessee. The extent of unaccounted professional receipt could however be quantified with reference to unaccounted or unexplained expenditure/investment made by the assessee." 10. S. Ajit Kumar was relied on by the learned senior counsel to stress the cardinal principle that in a block assessment addition can be made only of undisclosed income, the evidence of which was found in the course of the search under section 132 of the Act. The specific contention is that the details of the bank accounts in the instant case was made available to the Assessing Officer in the post-search enquiry, which cannot be relied on. We are not convinced that the cited decision helps the Revenue in any manner. Laying down such cardinal principle, the hon'ble Supreme Court had specifically stated that "the additions could be also of undisclosed income ....
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....lied on by the Revenue, to argue that there is no question of a change of opinion in the instant case. It is argued that there is no assessment made, as there is only a return filed under section 139. An intimation under section 143(1) would not result in any assessment as such. The proviso to section 147 applies only when an assessment has been carried out under section 143(3). The hon'ble Supreme Court was concerned with a loss return filed by the assessee therein after having been processed under section 143(1). This was attempted to be reopened under section 148. The ground for reassessment was that the claim of bad debt as expenditure was not acceptable. The High Court set aside the reassessment proceedings based on a decision of that High Court itself, which the Revenue argued was not applicable since in the decision relied on, the assessment was one made under section 143(3), which attracts the proviso under section 147(1) and the limitation stipulated therein. 13. The hon'ble Supreme Court looked at the amendments made to section 143(1) over the years. Prior to March 31, 1989, when a return of income is filed, the Assessing Officer could make an assessment under se....
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....imation served, on a return filed under section 143(1) and notice issued under section 143(2) concluding with an assessment after scrutiny under section 143(3). We would, hence, for the present case also, take it that an intimation under section 143(1) would not by that alone make applicable the proviso to section 147. To put it more clearly, the mere fact that a return was filed under section 139 and intimation issued under section 143(1) would not fetter the Assessing Officer from proceeding under section 148 to bring to tax the income escaping assessment. The proviso to section 147(1) and the limitation as provided therein would not be applicable to such cases if there is no scrutiny assessment under subsection (3) of section 143. In the present case we are not sure whether there was an intimation sent but even if it was not sent the position would be the same. By the time the notice for block assessment was issued on January 18, 2001, the time for service of notice under section 143(2), six months after the end of the last assessment year or the financial year in which the return was filed for the assessment year 1999-2000, had expired. But even then proceedings under section 1....