TaxTMI 
TaxTMI 
2013 (11) TMI 1776
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....assessment as the due date described for filing a return under section 139(1) of the Act had not yet expired on the date of search. Subsequently, the second search was conducted in the premises of the assessees on 27-4-2001. As the assessees did not file the return under section 139(1) of the Act disclosing the aforesaid amounts, he treated it as an undisclosed income and assessed as such for the assessment year 2000-01 relating to the previous year 1999-2000. 3. The assessees contended that the said amounts were reflected in the books of accounts. During the first search as the due date prescribed for filing a return had not expired and that he had filed a return under section 139(4) disclosing the said amounts, it would not constitute undisclosed income. The said contention was negatived by the assessing authority on the ground that though due date for filing of the return under section 139(4) had not expired as on the date when the second search was conducted after the due date for filing section 139(1) return is over, it constitutes an undisclosed income. Even if he had filed return under section 139(4) before the second search, he cannot be granted the benefit. But as the r....
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....ng are kept and it also consists of all other consequential powers, which are required for such procedure. Section 132A deals with power to requisitioning the books of accounts. Chapter XIV-B is a special procedure for assessment of such case. Section 158B defines what a "block period" is, as well as "undisclosed income". Section 158BB dealing with undisclosed income reads as under : "158BB. Computation of undisclosed income of the block period.--(1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period computed, in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the assessing officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,-- (a) where assessments under section 143 or section 144 or section 147 have been concluded p....
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....f undisclosed income,-- (a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of this Act without giving effect to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32; Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of section 32; (b) of a firm, returned income and total income assessed for each of the previous years falling within the block period shall be the income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called to any partner not being a working partner : Provided t....
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....e legislature has chosen to define undisclosed income in terms of income not disclosed, without providing any definition of disclosure of income in the first place. We are of the view that the only way of disclosing income, on the part of an assessee, is through filing of a return, as stipulated in the Act and therefore, an undisclosed income signifies income not stated in the return filed. Keeping that in mind, it seems that the legislature has clearly carved out two scenarios for income to be deemed as undisclosed: (i) where the income has clearly not been disclosed and (ii) where the income would not have been disclosed. If a situation is covered by any one of the two, income would be undisclosed in the eyes of the Act and hence subject to the machinery provisions of Chapter XIV-B. The second category, viz. where income would not have been disclosed, contemplates the likelihood of disclosure; it is a presumption of the intention of the assessee since in concluding that an assessee would or would not have disclosed income, one is ipso facto making a statement with respect to whether or not the assessee possessed the intention to do the same. To gauge this, however, reliance must ....
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....nts are required to be audited under this Act or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 30th day of September of the assessment year; (aa) in the case of an assessee who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year. (b) in the case of a person other than a company, referred to in the first proviso to this subsection, the 31st day of October of the assessment year; (c) in the case of any other assessee, the 31st day of July of the assessment year." Therefore, the due date for the purpose of section 139(1) of the Act is what is stipulated in Explanation (2). If the return is not filed as stipulated in section 139(1) of the Act, section 139(4) provides for filing the return at any time before the expiry of one year from the end of the ....
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....counts or in other books of accounts as has been kept for the purpose relating to the previous years, the said income shall not be included in the block period. Therefore, this provision makes it clear that if the income sought to be assessed relating to the block period is recorded on or before the date of search or requisition in the books of accounts, maintained by the assessee, prior to the ending of the previous year or prior to the date of filing of the return under section 139(1) of the Act, it is open to the assessee to request the assessing officer not to include the said income in the block period as an undisclosed income. While computing the undisclosed income under section 158BB of the Act, which provides for undisclosed income of the block period as aforementioned, shall be the aggregate of the total income of the previous years filing within the block period computed in accordance with the provisions of the Act, on the basis of the evidence found as a result of search or requisition of books of account or other documents as are available with the assessing officer and relatable to such evidence as reduced by the aggregate of the total income, or as the case may be, as....
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....isclosed income. Though the word due date has been defined under section 139(1) as is clear from the words given in Explanation (2) of section 139(1) of the Act, the due date is only for the purpose of section 139(1). The due date referred to in section 158BB of the Act includes the due date prescribed under section 139(1) as well as section 139(4) of the Act. While construing section 158BB of the Act, we cannot impart the due date prescribed under section 139(1) of the Act and compute undisclosed income, if such an undisclosed income is not shown in the return filed as prescribed under the Act. Therefore, the stand of the assessing authority that though the income was disclosed in books of accounts prior to the date of first search, as the said income is not disclosed under section 139(1) of the Act or in a return filed under section 139(4) before the date of second search which constitutes undisclosed income which is contrary to the aforesaid statutory provisions. Rightly, the Tribunal has set aside the said finding. 12. In the instant case admittedly, a sum of Rs. 28,83,258 was shown in, the books of accounts in the case of M/s. Raghavendra Traders and Rs. 27,25,596 in the ca....