TaxTMI 
TaxTMI 
2022 (9) TMI 1673
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....GTY/2011, which reads as under:- "1. That the above appeal has been filed against the order of the learned Commissioner of Income Tax (Appeals), Shillong dated 29-06-2011 against Appeal No. Sil-2/2007 08. 2. That the said appellate order was passed against the impugned Penalty Order u/s 158BFA(2) read with 158BFA(3) of the LT. Act, 1961 passed by the Ld. Assistant Commissioner of Income Tax, Circle, Silchar prior to decision of main Appeal against the Order U/S. ls8BC of the LT. Act, 1961 is still pending before the Honourable Third member under Group Cases Appeal No. ITA No. 60, 61, 63, 64, 65 & 66/Gau/2003. In this regards a Copy of request letters dated 27/07/2010 & 06/10/2010 were sent to the Honourable President, Income Tax Appellate Tribunal, Central Govt, Officers Building, 4t h Floor, 101, Mahrishi Marg, Mumbai-400020 are attached herewith as Annexure 'A' & Annexure 'B' respectively in Paper Book for your kind perusal and sympathetically consideration. 3. That on examination of main order passed U/S. 158BC/143(3)/158BG of the I.T. Act, 1961 dated 31/01/2002 against the Panchanama drawn on 08/12/1999 for Search Warrant issued. It is....
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.... other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. Explanation - For removable of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1)." (C) That the date 11/02/2000 mentioned by the Ld. Assessing Officer is the date of Panchanama drawn against the said restraint order passed VIS. 132(3) of the I.T. Act, 1961. (D) The search proceedings could not be kept continuous by passing order under section 132(3) of the I.T. Act, 1961. Limitation period for computing u/s. 158BE for the purpose of framing an assessment u/s 158BC, has to be reckoned from ....
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.... Shri Ashish Kr. Dey (these were cross-appeals at the end of the revenue as well as the assessee). 5. The ld. Counsel for the assessee raised a preliminary objection that the assessment orders are time barred. This additional ground was raised before the Division Bench in the quantum appeal but this ground has been rejected by the Bench by observing as under:- "3. Before we proceed, learned authorized representative has sought to raise assessee's additional ground challenging validity of all the three impugned block assessment(s) framed in assessees' cases for the reason that the same are time barred since not finalized within two years from the date of conclusion of search on 08.12.1999. He quotes sec. 158BE(1)(6) of the Act (as applicable at the relevant point of time) and pleads that impugned assessments framed on 28.02.2002 (first assessee) and on 31.1.2002 in the latter two assessees' cases are invalid since framed beyond the limitation time. We find no merit in assessee's instant arguments since we are passing "giving effect order" only u/s 255(4) of the Act. Our jurisdiction is confined to the issue(s) raised before Hon'ble Third Member only. ....
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....o a notice issued under Sub-section (1) of Section 142 or Section 148) but assessments have not been made till the date of search or requisition, on the basis of the income disclosed in such returns; (c) where the due date for filing a return of income has expired, but no return of income has been filed,- (A) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such entries result in computation of loss for any previous year falling in the block period; (B) or (B) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period: (ca) where the due date for filing a return of income has expired, but no return of income has been filed, as nil, in cases not falling under Clause (c); (d) where the previous year has not ended or the date of filing the return of income under Sub-section (1) of Section 139 has n....
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....ition, as the case may be, shall be on the assessee. 4. For the purpose of assessment under this chapter, losses brought forward from the previous year under Chapter VI or unabsorbed depreciation under Sub-section of Section 32 shall not be set off against the undisclosed income determined in the block assessment under this chapter, but may be carried forward for being set off in the regular assessments. 9. Expounding the scope of the block assessment and inclusion of undisclosed income, the Hon'ble Delhi High Court in the case of CIT v. Ravi Kant Jain (2001) 167 CTR (Del) 566: (2001) 250 ITR 141 (Del) has observed that the special procedure of Chapter XIV-B is intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. As the statutory provisions go to show, it is not intended to be a substitute for regular assessment. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of accounts or documents and such other materials or information as are available with the AO. Evid....
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....f undisclosed income is entertained by the assessing authority inviting invocation of Sections 158BB and 158BC. The enquiry into the correctness of such returns with reference to material so found has nexus with the object of the special provisions, to adjudicate whether the assessee is still honestly disclosing his income correctly after incriminating material has been found in the possession of the Revenue authority before such returns can be rejected and thereafter to frame assessment estimating the income liable to tax to the best of judgment on the basis of the material that is available with him." 10. The Hon'ble Bombay High Court had also an occasion to examine the concept of block assessment in CIT v. Vinod Danchand Ghodawat (2000) 163 CTR (Bom) 432 : (2001) 247 ITR 448 (Bom), wherein it was found that an assessee had constructed a bungalow and incurred an expense of Rs. 4,16,000. Thereafter search was carried out and the AO referred the valuation of the bungalow to the Departmental Valuer who determined the value of the property at Rs. 6,66,000 and the AO added the difference to the income of the assessee as undisclosed income. The Tribunal has deleted the addition ....
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....ime of search and the evidence gathered. Under Section 132(4), the authorised officer may, during the course of search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Act." 12. From the above it is clear that undisclosed income in block assessment has to be determined on the basis of the seized material. Thus for assessing an assessee for a block period there should be a search conducted under Section 132. The search only would infuse jurisdiction to an AO over the assessee. The next step for the AO is to serve a notice upon the assessee under Section 158BC inviting it for furnishing the return. When the return is being furnished the AO was required to issue notice under Section 143(2) etc. and compute the undisclosed income of the assessee. If such return was not filed then on the basis of the seized material AO would compute the undisclosed income for the block period. 13. The scheme of the block assessment indicates that....
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....or it can be calculated at Rs.12/- or maximum at Rs.36/-. 18. In the application for permission to raise an additional ground of appeal, the ld. Counsel for the assessee contended that all these Assessment Years are time barred but in the quantum proceedings, this plea was not raised by the assessee either before Assessing Officer or before the ld. CIT(A). It was raised first time before the Tribunal and the Tribunal has rejected this contention (findings extracted supra). 19. On due consideration of the above facts and circumstances, we are of the view that penalty is an independent proceeding. If an assessee can absolve himself from visiting with penalty by raising any jurisdictional issue, then, the Tribunal and other adjudicating authorities are bound to take cognizance of that jurisdictional issue. It has been submitted before us that time limit to pass an assessment order is two years from the end of the month in which the last authorization for search u/s 132 of the Act was executed. This time limit has been provided u/s 158BE(1)(b) of the Act. The ld. Counsel for the assessee has reproduced this provisions in the application extracted supra. The last authorization in ....
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....he Members who constituted the Bench on the issue, "whether reopening is in accordance with law or not?" The difference was referred to Third Member who has given his opinion. The subsequent Bench was required to give effect to the majority opinion but this part will be confined to the issue whether the reopening is in accordance with law or not. Apart from this preliminary issue, there can be the issues on merits of addition or there can be any other jurisdictional issue, namely, no notice u/s 143(2) was issued which is also a mandatory jurisdictional aspect. The subsequent Bench which was giving effect to the majority opinion on the preliminary issue was also required to take into consideration all other aspects. For example in the present case, the assessee raised preliminary objection that assessment orders are time barred and, therefore, they are not sustainable in the eyes of law. This objection was raised before the Third Member for the first time but the Third Member was of the view that his jurisdiction is confined to the question of difference of opinion referred to him. He cannot entertain any other additional plea. The assessee raised this ground before the Bench, which....