Smt Jyothi Kumari vs Asst Commissioner Of on 2 February, 2010

[Cites 15, Cited by 0]

Karnataka High Court

Smt Jyothi Kumari vs Asst Commissioner Of on 2 February, 2010

Bench: D.V.Shylendra Kumar, N.Ananda

4
JUDGMENT

These three sets of Income Tax Appeals 260--A of the Income Tax Act, 1961, have search that was conducted by the 18.3.1996 at the residence/business vpremises Cross, Buddha Marga, Siddartha of the respondent in I.T appellant in I.T.A.No.277/2003. I I

2. Two of and 258/2001 are by the re'_\f¢rl1't;§-:i,;il*:i$l_ these two appeals are couple. Whi1e_ 001 Purushothamalal is the respondent subject matter relates to his undisclosed income; to tax by the Assessing Ofﬁcer of section 158BC of the Income Tax Act,l19"€3.V1[he're'i--natter referred to as 'the Act'), but on his demise represented by his legal heir -- wife Smt. .1 «.JyothAiklu.mari, Wife herself is the respondent -- assessee in ITA 2001 and the subject matter of this appeal is 'block assessment order passed in respect of this the Assessing Officer is extracted as below:-- 8

inventorised on the Very date. A prohibitory order washalso passed by the Income Tax Ofﬁcer, Survey, Mysor'Vef:8."_i'in respect of a copy of RC. Book of the Motor . registration No.KA 09 M 7575.

8. It is the Version of the: Revenu_e*-- that:."'ﬂ1.(3:V search continued or did not end till whe'r1.tpheV':prohibitory order in respect of copy'of"p«.the.E_:hR:.,fj'§ ~..1_:}ook_was lifted and thereafter it was fo11owedA,up_notice under Section 158BC of

9. It is v~a1so---:fiie the"":ReVenue that further panchanamva 'Was 'drawn as _on 4 16. 5. 1996.

Thpegfdnotice Section 158BC of the Act was further notice dated 19.7.1996 issued L» under. of the Act apprising the assessee that the case is t'o"3o.o7. 1996.

"=991"1£"x.fi'hei.-'further development thereafter as recorded in the @/ 12

12. The Assessing Officer had categorised the undisclosed income of Sri. Purushothamlal broadly under the "Income Attributable to Money Lending Activities';-. * deemed to be undisclosed income of the..asse'ssee of, A the unexplained part of investment the"

No.569/1, a site adjacent to el>.{1sti11gpll"constructed L' A property of this assesseeat ll1'0.'.h hblros-s,w:l3uddha Marga, Siddartha Layout, part of expenditure property at NO558, 1001 ' Siddartha Layout, Mysore. l"_l\'/iorliey Lending Activities"

reads as unlderf A it it A L A A 1 . pp lAedvanc"e Lending 'n. Siddaratha Layout Property of House Property

4. 'Unexplained part of investment made on . 'the acquisition of Electronic and Electric it Gadgets Loan advance given to one N. Suresh Rs. 15,000/- for the purchase of vehicle 18 the matter and accordingly opined that the original':'--orderA4 dated 4.4.2001 did not call for any modiﬁcation V' order was sustained in its original form';"'

20. It is against this order dated..__24.3'.2_O'O.'3V Appellate Tribunal in Appeal No. 1 , theiassesfsee has come up with an appeal of the Act i.e., ITA.No.277/2003.

21. It is in appeals that Sri. Seshachalaf appearing on behalf of Shankar, learned counsel appearing on of? assessee have made Very have taken us through the legal position; possible permutations and combinations that lflniay erriergev' out of the issues, have also taken us 'through the merits of the matter passed by the and while the effort on the part of the learned Sr. is to demonstrate that the order passed by the ll"a;f'ribunal is illegal, unsustainable and unsupportable on any M 23

23. Sri. Seshachala, learned Sr. Standing Counsel for the appellant has addressed arguments on behalf of the in the two appeals viz., I.T.A.Nos.257/2001 Even at the threshold of his subrr_1.issi_ons_'u' ll objection was raised by Sri. Shankaig the assessee contending that tilovg, , , raised by the assessee should that as a consequence avoid going -of the order of the Tribunal on__t.he llpassed by the Assessing Officer the Tribunal. If the order of the though not on merits, even without for arguments sake not on merits gonly';.ori=_th'e'lground of limitation in a sense :_that_«asseslsrrIe'nt order passed on 26.5.1997 was one period of limitation as indicated in Section

-- 58BlE then the order of the Tribunal cancbe ""l.-fstiustainedff this premise alone notwithstanding the fact l"=Tthat-theEassessee has not either preferred an independent on the aspect of the Tribunal not having agreed with 26 that the Tribunal though by implication understood to have answered this,'ou'e'stion assessee, would nevertheless make a V'ferventg'_;appea1':.' f'orV* remanding the matter to the for Vre'cordai:ngllaEspeciﬁc finding on this question of if notinclined to examine the question raised' answer for the limited purpose the Tribunal though not on of limitation. The as preliminary, has in fact occupielqv émajor. hearing of these appeals as the questigpogpwas "in all its hues and shades and based. seEvera:ll'~l,egal principles. learned Sr.Standing Counsel for the _,l_f--«_R4e'v.enue hasjoined issue on this aspect, contending that in instance the very premise which is assumed on the h the assessee is that the provisions of Order 41 Rule A»2l2,"are attracted to an appeal under Section 260--A of the Act, is neither tenable nor stipulated in terms of the statutory provisions of Section 260 A of the Act, that it is not open to we 27 the assessee to contend that the order of the T supported even by pressing the arguments the assessment order was barred Tribunal neither exaniined this cluiejstionihnorp way if indicated that it was a question iineieits eriamination for an answer to set aside the fasseisesirient order and would urge that the assesseehaving'Vrnotlpreferlred an appeal by itself in terrnsi if Act raising the precise ion the question of limitation it and a shortcoming of this nature either the order or not following a procedure. flfetch the assessee a relief for order fofftlhe Tribunal not on merits but on the Vjlirniltation alone cannot be got over by a person who was,-onlyrespondent before the Income Tax Appellate Tribunal" as "--wel'l""as this court and would therefore, urge that raised by the assessee for examining the the order of the Tribunal on the touchstone of the if assessment order being barred by the period of M 28 limitation cannot be entertained or encouraged the preliminary objection should be oVer--ru1ed.

27. Sri. Shankar, learned counsel for the "

aware of such plausible submissions Revenue, has therefore by way ofabundarit to raise additional grounds Ilsubfstantial questions of law in thé..._.'f:1ppAeal;_:A assessee i.e., I.T.A.No.277 / 2003 tov,urge:,that:th.el limitation as an additional order which not on the ground of and would therefore, urge that if the bllocljglu passed by the Assessing Qfficer even on the ground of limitation, ___by the assessee, for the purpose of sustaining passed by the Tribunal and at any rate l7_in'the appeal filed by the assessee, the subject matter of appeal is the order passed by the Tribunal. The order V" 't'hefTribunal showing recording a finding on limitation or not having recorded a positive finding against the $/,, 33

31. It is firstly contended that the as the respondent in the appeals .'prefei'ried by 'titled.' i.e., ITA.No.257/2001 and ITA.No'l'"2*£:V')T_V8'/2_OOl defending the order of the Tribunalgjjto is in favour of the assessees and finding and the order, can ur_ge":before:A__th,is7Court;_"-theft./5ippellate Court, such of those implication decided by the or even such issues which the for determination by the Tribunal and ui11_Vbth.isV' cas'e'"th.e'question of limitation before they not been expressly addressed to can be raised and a correct answer can be sought for even when the assessees have not ﬁled any appeals that so 'r.,,,..,far of limitation is concerned to the extent of vsrelief granted by the Tribunal in the assessees Vbefore the Tribunal and though the Tribunal had not opined on the question of limitation can ' neyhertheless demonstrate before this Court that the dl""«._3assessing authority had no jurisdiction to pass any 35 the appeals before the High Court governing Second . under Section lOO of CPC.

32. Mr. Shankar, learned counsel for the asspessjee invite our attention to the provi's_ipor1s of of A Section 260 A of the Act to submititha-t_ the 'procedure as contemplated in CPC, parti'c'u'larly_'the of Order 42 to a Second Appealeand lyeipngllinked to the provisions of Appeal are all attracted in __view_o:'f sgb§5¢cfi:§n Section 260 A of the Act and thc*greforei;'lvfia;ro_ul€d--p at cross objection is enabled and tenablein view' (7) of Section 260 A of the Act even in an app_eal_undver"Section 260 A of the Act. 33: .2 extract Section 260 A of the Income T of Order 42, Order 41 Rule 22 as also Section'!-tOO--__'of as under for easy reference :-

/'S_.ec.t'i~o"n 260A: Appeal to High Court

7..VV('1.) An appeal shall lie to the High Court from 2 every order passed in appeal by the Appellate Tribunal before the date of establishment of the National Tax Tribunal, 61 cross--objection under Order 41 Rule 22 in an 1' an original decree or a like situation.

53. However, submission of S'1i._ Seshalchala.,""learned§ Sr. Standing Counsel for the appellxanlt--Reven'ueV: to the effect that in the absence of Aedﬁipress enabling"~p_>roVision a right, such as a right of appealpunlldervvQr.delr'Vh41".;Rule 22 though while has cross_:o:bje1c'tion.l:"which but a right of appeal itself cannot lliingference or by implication, read into the _of_:O--r__ci'er 42 or in turn under the provisions of su4:b=-section Section 260 A of the Act and itvis in ,sulpp*ort this--..submission Sri. Seshachala has drawn our .attentioAn«.to<:the observations as pointed out in para 28 of the Supreme Court in B. Subba Reddy's case (1999) 4 SCC 428 cited supra. The cg'-lVoblserVat"i.on "in this part summing up the principles that above the applicability of Order 41 Rule 22 in the of Section 41 or Arbitration Act 1940 which is an appeal in the nature of a first appeal, as in second appeal under Section 96 of CPC though may be limited on certain 66 provisions of Order 41 having been rnade'applic;abl_eRule"

of Order 41 was also attracted and ap_p1li.cAable]toAIan' under Section 39 of the Act. l""r'Ai7T1§'0wever,.,l_in lsresent situation, we ﬁnd such is. aslsub~section (7) of Section 260 A of the the reason that the provisions Act are more comparable to of CPC rather an appeal evenlvhearing insofar as the second appeal is all provisions of Order 41 are rnadc. autorn.atically.l' applicable to an appeal under in of order 42 r/W Section 108 of being a creature of a statute, a cross-

lddlllllobiectioh of Rule 22 being barred with an appeal :7u"r1till..and unless there is express provision on settling the legal"'.provisions one cannot hold that the implication or a ll rligh't"'lof cross--objection should be read into either the Ol."*.:_l"Vprovisions of Order 42 r/w Section 100 and 108 of CPC or under the provisions of sub-section (7) of Section 260 A of the Income Tax Act.

V 69 respondentassessee to defend the o_rder__4on of ' ; limitation also the submission of the réfsponide;1:. adoes"Anot._ stand scrutiny in accepting the as 'e::.presse:d"earlier.

58. It is therefore, that cannot be pressed into serviceqor it does" set up on behalf of the to of defending the order of the relief was granted.

59. That inevitably us to the merits of the :.con,t_ent.ipoins;>_iurged onbehalf of the Revenue attacking the order" on the questions formulated in the ' vmemorandumloi: appeal for examination of which questions appe'a.ls1~ of the Revenue have been admitted. '"'~lVbe"A--shall take up the questions in seriatim and ' ' examine the submissions made on these questions also.

".61. As discussed earlier the questions though are several in number they are essentially revolving around three Q;/, 75 raising additional grounds in his own appeal, which is again attracted against the order of the Tribunal though. only on the question of difference of value ' question of availability of a sum of R_s...3.._:the_ if sale proceeds of a car which the asses'see?lpressedV'le.;irlie;§i¢ifldi 'g which proceeds count in the invesVtment.__whic'h been i' invested in the construction oft.--building other questions. Limitation Wag the light of the enabling provisolto._sub:secti;onql(«aé'3_:.r/lvv":sub--section (6) of Section 260 A of ground/ question should alwaysbe; and even the Courts can also afdfqllllltl and answer the questions and if such is provision the assessee should be 1'aise if lthi"s"'question. It is therefore, such addigtiorialg. to be urged in the assessee's lifi"*-..iappeal'i_,ie., ITAi:i~.V.fJlo.277/2003, the question of limitation is to beragitated before this Court to contend that the V a'ssessm_e_rit order is bad in law.

Mia 76

68. We have bestowed our attention to the prayer for raising additional grounds. While we are not accept the submission of Sri. Shankar, lea1'ned_.c;oungs'el" ' the assessee that the statutory provisions section (4) r/w sub--section (6) of does enable this Court to .frame'g addi'tional d' V questions for examination; if such -questigons actually arise out the order of the Tribunal' iif isqvlibund that the Tribunal is again yzﬁ _-g iri,'Aanysweringlsjsuch'questions and if the Tribunal vmaddqre-ssed any issues, it could be excamiiiediybyu finding, or an answer recorded onV"=*rlhe«.issue'.r V.

69. The' question. relating to limitation being a mixed "questionu law. A question of this nature, can be permittedeto raised only if it is found there is sufficient foundation "laic'iffor raising such a question at the earlier and the matter is kept alive.

V 78 the order of the assessing authority, an appeal lies directly to the Tribunal which acts as the First Appellate but when it comes to the question of a .

adversarial in nature i.e., as though .,.. issues on some questions, it should Tribunal is the original authori'ty:vp"'~before" "can " it arise and on such premisethas appeal under Section 260 A of the first appeal and not a second app'e.al, by these submissions for on the question thja1':--:vtlie"'assessing authority could not have passed order in terms of Section l58BC in of provided under Section l'he"'obj'ection to the question of limitation earliest, particularly when it is to be peculiar facts and circumstances of the _, jVgi\l{enpcase"t.hAere cannot be a generalization of the question of it"«.lli'rnita'tiori.--'being applicable to all cases. It is no doubt true statute has prescribed the limitation in general but 79 even here for the purposes of considleringicv point of limitation it is inevitably linkedtto'*the on the cause of action arises whichlldelpcnds.Vuponythjelfacts and if circumstances of each case and di-fferentin. respect of each litigant in respect of which is in respect of each assessee. [If of limitation being not a mixed question of law and facts got an opportunity to plead this authority as the assessee was quite a\l2'v'arepthatln.o- "assessment order had been passed even as on and on the other hand the assessee._ihav'ing actiyiely participated in the proceedings, if at least for seeking further time for filing its assessee had not thought it proper to Vvraise question of limitation before the Very assessing llitwcannot be said that the assessee has got an opp'or'tunity to raise the question of limitation for the first V . before the Tribunal and that too only after the eauslsessing authority passed the order. M 80

72. While it may be true, that when heard and concluded and if was fwithin the} perfiodgfffof limitation, there could not have anir 'possi:.bsilit;;f'Vof'Vthe assessee so contending that the is if not "possible because of the period of l58BE of the Act. In the.p1'ese1j3t"set:V::of.:faC'f§,vv'th:e'assessee being quite aware of__. "'tha_t"--..as--.."onv 31.3.1997, no block assessment order lfiad been passed, and even as contended there was no of Tpa:s'sing'_'a"bl'ock assessment order, the contention' gtvithin the knowledge of the assessee as the._VAs:slessing Officer would pass the block assiesvsrrzent order___is.vnot tenable, an argument that can as--it""~w_as to the knowledge of the assessee that g the if at all is to be passed on and after 199-7, be barred by Section 158BE of the Act as to be contended before us. It is for this are required to examine the factual situation also a finding on this aspect assuming that it could been made an issue before the Tribunal. si/ 81

73. In such circumstances, we have to hold that on both issues for urging the ground of limitation as a groundjifor dismissal of the appeals filed by the Revenue, negative the contention and proceed togexamine"tvhefvrnerits of " "

the order passed by the Tribunal.

74. On the question of maintainability of""aV_crosseobjection in a second appeal even 't.erm'sb"o_f lO(V)u'ofAxCPC, we have exajnined the question decided cases, even cases decided""b;§v' Ciiuritsv";othe.r*:."'tha.n& referred to and relied upon by ¢i§¢3£:sp"se1.ifofi»§the parties.

75. While-,our exairlination__VV'I'ias' indicated that there are good number uof.juvdgni_elnts the High Courts and even the indicating the scope of the provisions of Or'der»4'l .Ru1:e-22pViand even with reference to the provision as novv p_prevailv:s'i.V_after the 1976 amendment to CPC. The ..ff_j.,sc'ope of Order 41 Rule 22 after the amendment is explained {~.'_vVV't«o two implications. The first part is to enable a non- apipealing respondent to defend the order in appeal even by V 82 supporting the order by contending t.,hat"'thie against the respondent should 'have been 2 decided«:._i11--..favour = L' of the respondent by the order Au4nider'vvappeal«everriwithout ﬁling a positive appeal or a" hesecond part is to enable a could have filed an appeal to having granted the relief so11.gh_t'g"for person through an independent appealtlo-~ la' cross--objection which can achieve the plurplosellof inairltaining an independent appeal thou.gh__f'suuch la"'p.arty might have missed the bus and hadiiot 'appeal which is to be filed or to maintain :'ll"s».__such.'a.n"'lappea1j__through the cross--objection in the appeal by either contestant to the original proceedings. '._W"'r1ile we ﬁnd such is the scope of a cross objection it i'lled"'under the provisions of Order 41 Rule 22 which is eitpressly applicable to first appeals or in the sense which is a Rule in Order 41 which is a procedural guidelines in respect of appeals from original decrees. Insofar as the 75/ 84 Rule 22, cannot provide for a right of appeal V appeal can be creative of a statute and has he filing a cross objection in a second of CPC, which is not so expressly ﬁling a second appeal against of Civil Procedure. We say': until and unless the provision like expressly made applicable CO appeal there is no way of reading"that'--l>y'V.liay' of.iim'plication.

78. Though the 41 Rule 22 of CPC is quite considerab_le,. We havejnot been able to come across 5 direct av:ui;hQ_rities to'ho_ld.«a cross objection as contemplated 22 is tenable in an appeal from an 2' appella also.

AWhilel'there are no direct or specific authorities of the Court on the question to hold that a cross V objection in terms of Order 41 Rule 22 is tenable in a second appeal particularly, such a question having been not raised V, Order 42 of Code of Civil Procedure.

82. Such a situation can arise only in an appeal against an original decree and not in an appeal against an"

decree. A situation of this nature gets exhaustedlat. the appeal stage and need not be perxnitted/enab.led«agai.n:Vin7an".

appeal against an appellate decree. reasgon'valso=-_]vv*e"' are inclined to take a View that atc"1*ossaobjection expressly enabled in an appealgundieigléection2Vl'O(l' of CPC nor can it be inferred by of order 42 which enables land the rules therein being .ltheV':.procedure required to be followed:in"re's.pectl:lo:'l:llan:lappealupreferred under Order 42 only to thelle.Xte.nt not in its entirely. The preponderance lolfjuldicialiopinion to the effect that the cross- iterms of 41 Rule 22 of CPC cannot be infe'r'red_..in " situations where even a first appeal is Iv.2"provided-against'fan order of the original authority is also a «.rlﬁgallprinciplelwhich weighed heavily with us in coming to _ "the conc-lusion that a cross--objection is not enabled in terms V-

83. We have also for a good measure examined the possibility of a cross--objection in terms of Order of CPC being entertained in an appeal under of the Act and on such exarnination" -andl examination only indicates to the cross--objection is not tenablelleilfen 'under A Section 100 of CPC, it iglappeal under section 260~A of the Act.

84. We ﬁnd (7) of Section 260 A of learned counsel for the assessee reliance to contend that cross--obljec:_ltionsl" even in an appeal under Section A oflthe only enables the provisions of relating to the appeal to the High only as far as may be and provisions in this Section or in the Act l'Sub'~section (7) of Section 260 A of the Act figuring end of the Section "Expressly providing for the procedlure to be followed, it should be understood to be only ax?

90 appealed against such question is to be formulated and at the time of hearing of the appeal, the hearing restricted only to such questions which have ll formulated and notiﬁed. While it is open. to even to urge that the question does it obvious that the respondent can issue. .on..t_"hel'merits to defend the order. The enabling ,p'rovisior1..of provisolto sub- section (4) does permit the formulate additional questionsfand the beginning but even it is question arise or involved appealed against. It is of some that the decision of the High COu,r--t., inn Section 260 A should be '~-the given to the questions of law forrflulatledee lvlleéigamined and not based on any other l"'~c'onsider»a_tion.s~. XVhen such are the restrictions imposed on

--«..l'_j'aj;1.'_lgxppeal "under Section 260 A of the Act, it is rather accept the submission that a substantive right llliliev.a_dross--objection Which is nothing but a right of appeal 94 Section 260 A of the Act. It is a well settled the respondent can sustain the order, challenged, from being decided agajn:stAhin1.,_v

90. Here while we have to disagree with the generalization of the principle that all provisionslrelatingdto'Codpei of Civil Procedure would apply idspreferred under Section 260 A of that even under sub--section ( Act, not only all the provisions.re'latirfg;_:to appeals is made applicable, but it is only" Arelating to appeals of High Court and appeals» to Court and even here only to they beingapplicable or made applicable and enabled' =ur1vder;"'subfSection (7) and subjected to further .condition'bAthat"it'i_ so safe for application on a reading of all provisions of Income Tax Act. A sweeping 'j._:"gen:e'raliiation to the effect they being made the basis for 'acaccdeptfance, even the Court maintains a distinction between first appeal and second appeal and all appeals are generalized under the code. Be that as it may, with great 97 19 of Order 41, an exclusive procedural aspect readmission of an appeal dismissed forhdefaullt reasoning it cannot be acceptedor hel.dl"that of Order 41 Rule 22 i.e., a substantiare proVi.sion:.'.als"o be made applicable and included Tlthge scope' of sub- section (7) of Section 260 A bf-the' pa. if

92. In our judges Of the two High and Orissa High Court, we are of these two judgments do not constitute"sanyV "::tu'thlority to hold that a cross- obigectionéisi'tenable"--in___a.:Section 100 appeal to the High principles underlying the enabling provisions' of Rule 22 to file cross~objection is that 'had succeeded in part, before the Court of «i."'firstf instance and who contends that success should C" llffn_e'vertl§1eless be enabled to seek for improvement when the who has not received full relief before of the Trial Court chooses to file an appeal to improve his prospects or to deprive the contestant even from the limited relief that the 98 other party would have obtained beforemthe T " " it is only to give a second round of :'opp:ortunity'-.'to 'al:i1o'iii+':

appealing party, who is content-.._with'-.lin1i.ted',:"success or failure but is dragged before the a fresh opportunity to shrug off of the trial court even such a an appeal, the enabling provisions are put on the statute, but -provision to file a cross objection a 'under section 100 CPC is neither the th:_e.'i'intention of legislature in Rule the provisions of Rule 3 of Order 4V2,Aof .._"Reference in sub--rule(4) of Rule 14 of g(p)rder"X.Lltov of first instance shall in the case of an _jt'ra..c.appeal froinvlanvappellate decree or order, be construed as a the court to which the appeal Was preferred ' -iffroni the decree or order" also cannot make any difference to vﬂ""Aunderstand that the provisions of Rule 22 of Order 41 of ~uCPC are all automatically applicable even in respect of an appeal under section 100 CPC for the reasons as spelt out 101 question recedes to the background and accordingly the question as formulated in paragraph 17 of the memoifandum of appeal has to be necessarily answered in revenue and against the assessee.

95. 'With regard to the questio'n_posedior 01,51 in paragraph--l8 of the memorandurnlof relating to valuation of the propertyanel in this regard by Sri Seshachala, learned appearing for the revenue department was based on sound by the tribunal are not justified' has committed an error in not of 15% purporting to bepdue toithe. legal valuation method and CPW 1nethod"~-which the Tribunal presumes to have been adopted.'-byvvltlieDepartmental Valuation Officer and further deduction pp .1130/0 towards supervisory charges by the c '~.assfeVsseiev.himself was also not warranted when the situation 1' not warrant a reduction of this nature and in fact the 49/1 I 105 detail examination by the Tribunal and that too by giving various reasons. V l

101. With regard to the submission of Sri counsel for the assessee that difference be subject matter for block assessment on the it is some undisclosed income View taken by the learned in the decision stated [supra], we Aa.te:"_o.f concept of block assessmentiilislbnlyone_that:_4lenab'le's:revenue to bring to tax some block period and it is not so in which it is found that certain income: disclosed whether it is attributable to sorr1e._l_'Clill1"feriences in valuation or on any other lreasoriv, has a link to the search which results in passing -of a' assessment order and so long as there is some unexplained investments or expenditure or an asset .1 the hands of the assessee which is a general in law and particularly as enabled under the We 108 question of law is rejected. This question is an_swere"cllinl_f favour of the assessee and against the'revenu'e. .g «

106. In so far as the addition unexplained investment and a1no_u:nt:_ad,vanced_ Smt. Lakshmi Gururaj also did not dispute the transaction, had not even found merit that a sum of Rs.50,000/ and that had been recycled balance amount if at all could have been not acceptable as the claim vw-asnot_»»siupp'ortedV.iby'anyreceipt etc., owing from Gururaj ~ hu-sband.. of-Lakshmi.

The Tribtinal on this issue has reversed the ﬁnding a rather. perverted reasoning to hold that there is no evidence to support the view taken by the assessing ' "V108. It is not for the assessing officer to produce some negative evidence, but for the assessee who puts forth a 109 claim, to make good the claim by producing evidence. the assessee had claimed some amount had come back"to:Vhim and that fonried a reinvestment etc., that stand ' been made good by the assessee if assessing officer. In our considered opinio._n';lthe'--reasoniﬁg_is=. most illogical, bordering on peiv:e'i*sity.A.V' lithe l' V finding of the Tribunal on andansvver the question in favour of the rever1._ue'an'd»' agai.n»s.t"the assessee.

109. With regard at paragraph~2l on the peak cash credit at Rs.l4,55,5i:)l_O/_§ "amount found in the bank statement ofllthje assessee as disclosed by the assessee._§hilmselflas" 'properly explained, the Tribunal has p'r.oc.eed.e_d on certain assumptions and presurnptions to upset ohnlthis aspect of the matter.

is lonlthis aspect that Sri Shankar, learned counsel l."lfofrthe--..al.ssessee has also joined issue contending that an a bank balance which is already disclosed by the 110 assessee in his return of income in the 1'1OYIT1al_.CO':L11fS€l::'Qf_ filing of the return, cannot fonn subject assessment, particularly, for co:ntenldin.g«_ undisclosed income is imbeddedin theasset andT.while such is the submission on behalf of thelaissessee; of the revenue and as submitted learned senior standing counsel, is to the bank statements, the assessment of the bank deposits and credits in consequence of the Very informationAlfurni.shedl thy:.'th:e4'assessee when the assessee had beeyrlgjpServedxwithlithelnotice to file return of income and pursuant to the search and any material forthcoming'in'-pursuance of a search and follow up action if it --could.""reVVeal"cany undisclosed income in respect of the the expenditure and assets held by the assesseelccthat can be brought to tax etc. Another aspect is the method adopted for taking the ﬁgure at Rs.14,55,550/-- as a peak cash credit and on this 111 aspect while Sri Seshachala, learned counsel for___ the appellant -- revenue has submitted that the cash are worked out for the years within the block period' ' and year-wise, submission of Sri Shankar. learnetd,'coun_Seil._V V for the assessee is that in the concept assessment under section the .Actu,d'it as 1' 1 though the income or the ,.-undiscloseid dincornel 'isuiiearthed for each year of the block block period is taken to be as one iiniltani income of the block " as a part of one assessment' 'or(l'e.rjiiy

112. While dsugbinissionsi' learned counsel for the revenue ,ande..learnc.d"Vcounsel for the assessee per se merits 'accepta_nce_son legal principles, the question is as to Whether the "as1se_ssirig'_*_v.officer had committed an error warranting in.terfere4i2ce'--b.y'the tribunal to conclude that on the premise the,_cash credits could be explained from the source of the of the Hindu Undivided Family, some income carried by the assessee from Singapore trip collections and é/l 112 amount drawn by the assessee from the chit group and also as part of home loan from Canara Bank and received from the relatives, we find that the . put forth such claims before the assessing' if "

rest content in claiming that the peak cash credit was not tenab1e';~....that"it:worked:,:for.. each * if year and this claim projected fory.thle"p:en'tire nuinberfiof years in the block period etc.

113. We find over board in finding ways the bank deposits in favour of that to a variety of activities capable of generating income"4av'ailablle investments in a bank by Way of . _____ _.

114. of the assessee that he was carrying on byjgborrowing money is to be pleaded, the assessee have been keeping the fund parked in a bank by deposits. We find that the actual figures as reﬂected $/s \.

113 in the bank statements are not in dispute andpilf * total is a possible amount which was _n.ot_properly' if if for as found by the assessing ofﬁcer-:<ar:jdi entire block period, even afterll_'p.r_ovidir1é foriuvvitlidryavvals which is the method as worked -the officer, the Tribunal could not to relieve the assessee of the burden to found in its account by the amount are attributable to ;»activi'ti.es.:,'iof the assessee etc. 1 l5. We are also to accept the submissions of Sri Shankayy_Vlllearned'._vco1linsel for the assessee that an investment in an ' had already figured in the returns matter for a block assessment period under of the Act, only for the reason that the 7-'VVsubjectf'matter'for assessment in terms of section l58BC of Act is the undisclosed income of the assessee attrib'utable to the block period which had not been brought toﬂtaxg for any reason.

ﬁe 116 subjected to tax, the assessing ofﬁcerwis' bound" a._ block assessment order. '7 -- " V "

118. Here, We are of the clear Vi'~"'<:W'~».,'§}1at'th_e to " it whether the assessee had earlierl:V"disc.losed' part of its income or not. A disclosure" ofvAeXisjt.e:nc_e of an asset is not a criteria whether 1.1.otvA.'§'1:i,si:losed. Even assuming that purchased in earlier year or in an earlier year had been revealed' and liabilities of the assessee, acquisition had not been accounted for1'in_11the1y.ear.s" as a result of the search and the assessee'~was called upon to file its return of income, if it His-._ thatthe investment in an asset has not been properly accou"ntfed.¥for giving rise to an inference that some 1""'V'part of..__1it been accounted for earlier and quite _,.l.l'_f3-pos~sibly income also had gone into the acquisition of thiejto that extent, an information whether it is directly result of the search and found during the search itself _ or a follow up action when the assessee is called upon to 119 L121. We are also aware that if an incorne bieerit Ru disclosed in the returns ﬁled prior Ito search' assessee, such income can Ethe form of regular assessment or permitted within the scope of sectioVr1««_..1:'4.7 of does not get into a block assessment had not been disclosed no way of the assessee ﬁling "earlier year, but it is only in tojbebrought to tax and the only c1iteria"for'-briiigiiig undisclosed unassessed income of the iassesseie ifordthe earlier period is only by the block as:}sessment"order and by no other method so long as royisidnfs section" l58BC of the Act are on the statute boo "

22. If "t.his.__'p1'irl'ciple is to be applied, we are of the View that :7iti1e"mere that some of the bank statements did indicate thecredits as reﬂected in the bank account of the assessee V" itself does not constitute a disclosure of income by the I L' ' _ assessee. V' 120

123. As to whether the availability O'ffWsuch_ if from the hands of the assessee into the and to that extent the assessee__a'd:mitti11g_ -fare r L' remitted to his accounts is _a basic__4fa:ct_ rise to the inference of a possible._fundifsclosedffincome or may not be. Ultimately, the- existenchef» undisclosed income pursuaniifiv in the bank accounts of point of time is a matter with reference to the explanationztoffered. glandv_'thVei'--acceptability of the sanie and that exercise lihavingbeen~~--"nundertaken by the assessing ifftlle T ribunalis to reverse that finding, it has to that the assessee had a worthwhile 'Vi'a___exp1anation to demonstrate that the acquisition 4"a,.,__of._the or any part of it is not representing an undisclosed income and therefore the View of that it is so is nfothafproper evaluation by the~assessing officer. The ' Tribunal has not examined the question from this angle but has gone off at a tangent in accepting the other explanations we %;i 121 given by the assessee and that too most of time put forth before the Tribunal and of the Tribunal on this aspect of the rnat'ter setting aside the entire peak cash"t'c:redit of-- , particularly, on the premis"e,_that'dthenﬂassesseelhad sum of Rs.27 lakhs available withalhim fact on the premise that v--.bar;lAlv<v"zvvithdrawals had been been reﬂected in the returnsfiledearlieir that either appeals to us or can merit.accéilﬁtabilityil'-.,.. -- 1

124. It isvirtually» question as it is the amount ' 5g'800-- an amount from out of which the assesseeVisrequiredpto explain the income part of it and that iv"g.____havin'g.not vbeieiimidone, mere availability in itself is not the criteria part of the available amount had been be from out of the disclosed income is the criteria-- and the assessee having not disclosed the income npartvvhich had gone into such investments and with the 122 assessing ofﬁcer having arrived at by a method cash credit to be at Rs.14 lakhs etc., from there was no Way that the tribunal co'u.1__d:"have f¢xr¢*-med' ﬁnding of the assessing authoritiy;--L.

125. Sri Shankar, learned' ford assessee very vehemently contended that "n_otf_on1y'~,the*: assessment of income on peak erirfoneous, but even while computingiithe. block period, the method of the asseiss'i'r1gi:oihcer;-- "in't0--'account the peak cash credit for each of the block period is also not tenable as thvatppinilitates the scheme of the block period fo_.ftreatingV.'th.e entire block period as one assessment .i's«.._vfor this reason has submitted that the aggregaitionviofvithevspeak cash credits in the two accounts, '11ame1y';«.__ current account and savings bank account it " :v".fnaiﬂ'i1ta.ined'V--- the assessee with Canara Bank from the years'.1_9:'91-92 to 18.3.1996 reads as under:

you 123 Asst Year SB A/c No. CA A/c No. ~ ~. « 78461 430"». 7''*'''--'.;

1991-92 160,200 ; "160,200_-_c 1992-93 1 16, 800 362,0_00~ 478,800 -

1993-94 2,000 , 236,700 ,f'288,"700 1994-95 25,700 _ .0 77,000 . '._102;70..0V 1995-96 13,200 *-309,800. f323;.000 1.4.95 to 18.3.96 34,650 67,500 ' 102,150 Total 352550 1,r17'9_-3,'t300 1',V455;550 is clearly erroneous and at rate 4"avggregating the peak cash credit to Rs. 14455,550'/"1=.lS'C1€Q17ly" proper way of working out a of the assessee for the block periodnp '

126. Sri senior standing counsel appearing fof"the.vrev.e'n:.ie;.:_'on the other hand, has joined issue on; this asxpe=ctvv_by1 pointing out that the assessing v'o~fﬁce'rv1:lQSV'~=%iV€f1-.,deductions to all withdrawals for each of the d"yea'1__';p.1tliat.,2_tli.ev-total deposits as found even as per the Awvlbank staten_'1ent7 and as disclosed by the very assessee itself 'sum of Rs.32,22,1l4/-- and even while taking the'v'.ApealT§--' cash credit for each year, in the sense, highest 'halan?ce in respect of the accounts for the year in question _vvhich is only after providing for the withdrawals and with ?§/ 124 the assessee not coming forward with explanation as to the possibility of the 'vw;thdrawfn." having ﬂowed back for the credits in of .. there was no other way of the assessing.ofﬁcerrveducingV:the it peak cash credits for the ,yearsg,in-- ijuelstion an'd--..if.--on such premise the aggregating the for the years in question are added" it 14/_ and there is officer adopting this ﬁgure as of the assessee in the two and bringing this amount to tax is the 'the assessing officer and the Tribunaljwhavinxg Ireversiediiilhthis finding not on relevant 1-Vconsideratilon but onvlwextraneous considerations such as attributing"v.§oIn'e:s--ource of income to the credits while the .'"'vc.___actua1.vvlithvdliacfvvalywwere not properly accounted and when the were not demonstrated to have been the Tribunal had no reason to reverse the well re.c'ordedi'ifinding of the assessing officer on this aspect of the 125

127. We have bestowed our attention to the rival' -.a:rgu'rnentsl4 if on this aspect. While it is true that attributed to have some income?a_r_id vyhi_cl1 is peak cash credit and treated as of the year in question, could that part of it has been recycled during the subsequent years" naturally that amount could of computing the peak caghiu years, the actual recording on "assessing officer that the assessee did with any evidence worthwhile to. clai.m""an_dH.the Tribunal instead of addressing this' aspecti_l1.as.,A.VlgiV_en some other reasoning to reverse the findinghlof thelapssezssing authority. thevffribunal should have found as a matter of fact ._ as""i_«s now sought to be contended by Sri Shankar, 1earn_ed°counsel for the assessee before us that the peak if credit which constitute income for the years were

-alrlailable for redeposit on being withdrawn and if it should 126 have been made «good perhaps acceptance and could have beenaa setting aside the assessment as assessed by the assessing ofiiceriljeolrbto thevexfent it is permitted to reduce the the course of action resorted to_ the by the assessee either or before the Tribunal. tttt l29. Though Sri Sl1anl{ar;"'1.:e'arned counsel for the assessee would contend' that the " assessee had placed necessary mateﬁaJ._and.if the' had not addressed the issue and "had" not. recorded commensurate finding on this, the be penalized for the absence of a ﬁnding the Tribunal, what We are examining is as to .._j_f.,_the__susta1n:ability or otherwise of the ﬁnding of the Tribunal legal principles and as to whether the conclusion V" 'l'ribunal to delete the entire peak cash credit amount as not an undisclosed income, of the assessee and therefore "did not amount to unexplained investments. 3% 127

130. The explanation as is given by the assess.e_e"»»befo1'e_ was not forthcoming, whether before the aassessing' or before the Tribunal. We are not inclined to iintolfthe if so called statements/submissions' which V Shlankar, V learned counsel for the assessee would. draw ouratt.e'htion to and said to have been "placed fbefore"i :the tribunal for examination, as we are iirequireldh 'examine such material in an L1i'ld€€1"vl.Se_§(f21::i.C)'i'l"V260-A of the Act, particularly, for as posed for our answer. .... .,,, . ._

131. In the the questions alone are required to be if a question does not merit iriot'baeingivvamisubstantial question of law, that but not to answer a question on any examined and answered by the Tribunal or ..{thewauthorities, and inviting our attention to such material/ placed before the High Court for the first time and V" answering the questions, which has no bearing or V A relevance to such material! 128

132. The arguments as now addressed before~Vus_:,":'had: been sought to be addressed before the notice that the Tribunal simplyg purporting to be on examination"oti'1"actsL to any material supporting the on anvassumption that "one cannot dispute cash of Rs.

27,15,600/-- with dwthichdr based on the premise that -generartediltlhis kind of income from a variety as Singapore trips, amounts being the kartha of the Hindu Undixl/Aided amounts drawn from the chit transaction: of them had been made good 3»-."gts$eg.singWualuthority, there is no way of the such sources of income to the assessee "A"°for the concluding that the assessee had cash of l5,6Q_(3/- which even on a Very liberal View appears to ambitious for the assessee and rather impertinent ' the part of the Tribunal to record such a finding. Attributing availability of an amount of Rs.27,l5,600/-- in W 129 the hands of the assessee which had never been:

for and even when the assessee had if ' banks for the purpose of investmentlfor house etc., does not appeal to 'us either Qril reasoning and to accept that while was retaining such amount of was borrowing funds otherwise alsoand 'amount which is available for su_cl'1"de'pos:its ietcﬁl pg

133. The does not appeal to us in the l_east-- frown on this ﬁnding, other argument of counsel for the assessee that 1Lhe4:;'11€f[.hO'('4;l peak cash credit for each of and that is also not tenable is an wegcannot accept for the simple reason that }*'''for each:_Vyea;'.,' assessing officer has in fact examined his *<.,.::'-vd"Cap»OSitS withdrawals in the bank accounts and has account the possible peak for the years in h and with the income tax being an annual affair 'though for the block period it is made as one assessment §// 130 order, for the purpose of ascertaining 9 income part and even with respect the assessee having had the oppoprtunitysof each of the earlier years and if th'e:t"1'ansac'tiorig.'-iasssireilected in the bank accounts had. eicplained for the purpose of the income: and used as an incom.e«'vvhich{is §ac.coun'tedu for" and invested for the purpose of -.otl1'er.'vinvestment, We cannot accept the argument "tl.1atvf;the--...method adopted by the assessing t.heu_Wpeak cash credit available in the ,--oi' the year which again is arrived at afteVr"givin.gV to the withdrawals and only ithev balance '°--t------a'given point of time and highest for theyea'r~in" does not in any way militate against the XIV--B of the Act and it is only one methodhsof at a possible undisclosed income of the for the block period. It is not as though if the .as_se':»see'shas accumulated the undisclosed income over a of time, the undisclosed income for any part of it 131 alone should be taken and not as discovered for.__ar:yeV.otherv_y'i H part of the block period, so long as t:l1e'lsame'..ein_coAm'e; taxed twice but only once.

134. We are quite aware that in parlance;particularly, in income tax, an inconie':whichi. once, cannot be taxed again in the assessee is a Well accepted as to whether it had suffered at a possible undisclosed" if the method as adopted byvlthe not militate against the method and -of'.arriuVing at a possible undisclosed vinceome_/there is way of the Tribunal disturbing the undisclosed 'income arrived at by the assessing ofﬁcer and irrespedc--tj.ve"ofywhzatc the tribunal has done, the arguments addressed Shankar, learned counsel for the assessee accept only the peak cash credit for each year separately does notwappeal to us for acceptance.

132

135. If the assessee who had the oppo.r:tuniTtyi'l"

demonstrate that this very income :~had-«been _.recycled--.i'for'; further credits made in the bank had' .iail.ed that, it was not for the tribunal_v"to. invent pos»siAb«i_litiwes*';not * it demonstrated before it to hold thatl:lth:eI'e_y_vWas'noundiisclosed income or to opine in gv-mlannerand even if the assessee to contended, as Sri Shankar, learned counsel for have been only the peak which. is entire block period.

136. There"~.ca'ri and not several peaks, but in the very scheme of._the"IVn'come Tax assessments and the manner.._ofu computing undisclosed income, that too by the lpreseiitdl 1nethod'*--..of the unexplained credits in the bank accoun.t;"u.vve_'ld'c.__ not ﬁnd the method adopted by the iv'-,.v.assess'ing o_ffi'ce_ri" to be obnoxious enough to warrant .Q.interferenceby the Tribunal or to upset the same by us on of arguments addressed by Sri Shankar, learned V" _co'unsel for the assessee. It is for this reason we inevitably answer this question in favour of the revenue and against 135 salient feature of this block assessment ord_er1_Ai's..Vt1:1_1ati_thbe assessee had been assessed to und:1's"closed'..&incolrne of-TRSI'; 9,67,09O as undisclosed income re'fera._loie the 199192 to 1996-97. The additions niadé for1'the._'different years are as under:

Year ' fA'mount Vi.nT?._upées 1991-92 .

1992-93    4,.73,800  
1993-041--1  1 2».88_;:7.00  A
199?4L\95-1-_V _  
1995996-1'    .3',2310c0
1996M,»   ~ 1l,02,;150

resulting in a o£__5..80,254/- on the assessee.

141. The passes.see'sV"V-.stand"nl was that she, as Wife of vPL1rush_ot:'harnlal, 'had..._..S1€parate and independent income prior .,Vtl1.e'«,T'date of search of the premises of she had filed return of income for the wyear 1995-96' normal course, towards the difference in "".'::.".the"'cnost ofveonstruction of the house property jointly with her husjband and other amount, was in a sum of Rs as unexplained investment made by the 9/ 136 assessee for the four assessment years inpyotiiesfion i3I1~ purchasing an immovable property byithed'assess~ee:V:_" V

142. The assessee had appealedto._theatribuna1',:V' inter alia, that the search 'was with law;

that the assessment was"'*..xnot permitted time under Section 158BE of sought to be included in of the assessee cannot be again of the present assessee also.' investment of Rs 3,81,284/--V1V"as it was the Version of the assessee th_at.it' was income generated by her in relation.» to 'tai1orin"g" actiyity pursued by the assessee and the jfrornA..this~--,activity had also been offered to tax and the out of the income generated from this Vviactivity""'hadj" also been accounted prior to the search and "":?".t11erefore the addition in the hands of this assessee to any eXtent--i.s,bad in law and requires to be set aside. 137

143. The tribunal, which examined"

simply accepted that the addition:

construction in the hands of the_4asse'ssi'§-3 to liiexltentdofl 50% as her contribution could haxEeV--tbeen consid_era'edMo'nVly if hi it had not been considered" elsewl1ere;"bVi1t,_ if théeincogme had been considered in the there was nothing left independently' 'part of such investment in _ hands of the assessee and Ltheliiaddition was not good in law.

144. The othe"r..haspe}:tAEof'~~--'investment in other property :_aInounti:ng Rs 38' 1,284/-- by the assessee, the version of the asse-ssee"that"'this was from out of the income generated Vfrom.'herbtailoringhuactivity and should be accepted, for the reason that"Lthe assessee was ﬁling returns of income from 1986-87 onwards and in this View of the matter, allowed the appeal.

3% 140 and above what had been accepted in ﬁled by the assessee in the ea1*l_ive--r_Vyears having not been properly any other than the amount already i1A1.dVi'cated returns ﬁled by the assessee, deletion by the and is on an erroneous onllyiaii-..income which had already been the returns filed by the assessee for rthe ea5:fflier"ye'ars.

150. Sri A Sharikar; hlearneiicounsel for the respondent- %;?$a2S€i§g?W%iiL§ ai§'§a§i%éh%&ii£1?r%1%gs ntagtlaeiagaisstgrrﬁa __fact even in terms of the return filed for the 1994-95 and in the balance sheet ll"happend'e_d to' return of income, the assessee had pointed "--'ﬁ.-fi."vo12it"»toythe vavailabihty of this kind of fund for investment; thefentire investment in the form of assets was actually . the extent of Rs 4,05,005.5O and this had been duly accounted for by the assessee, based on the returns of it 9' "income ﬁled for the earlier years and that total investment of 'earlier,years..AA _ 141 the assessee did not reﬂect any amount over and has already been disclosed in the returns sheet for the year 1994-95 and thereiforeithe justified in concluding that itgvc_annotA_:be again, which Virtually ajnounts income twice. 2 1 <1 _ V

151. We have been' for the year 1994-95 filed by balance sheet appended to the therein that the capital it 31-3~1994 was Rs 4,O5,OO5.5OA1 supported by the income generatec;1"'in.. termsuovlf the return of income ﬁled for the 1521." Sri Seshachala, learned standing counsel.44"for'-lithe appellant-revenue, does not dispute the factualio-pzremise and facts and figures as mentioned in the 'sheet attached to the return of income filed by the 1 V A asselssee for the assessment year 1994-95. 9/ 142

153. A perusal of the balance sheet and the _ by the assessing authority and them tribu,r1'a1;A'.jifdoeis indicate that the so-called unexp:'1_Vain_e-dd. 3 3,81,284/- is only made once by the assessee already been accounted proper1y'i'*a:nd_Vinddthis of the matter, of the two questgoyri-ys anneal by the revenue, while the first academic, as the revenue itself entire income assessed in -- husband of the present as.s'essee";5--s 'thereforc...there is no question of bringing that incorrdieftoj in the hands of the present assessee, in sofar as the second question is concerned, it has to be n*ecessarilyv_ answered in the afﬁrmative and in favour of thenasse-s_see and against the revenue. ».___154. t'Acsordiri'g;1_y?1"TA No 258 of 2001 is dismissed. it i ETA N627? or 2003.-

appeal by the assessee directed against the order by the tribunal in two appeals that had been §§/ sssss 143 preferred by the assessee and his spuse Ms is against that part of the order of assessee was denied relief to the con.t"i,rrnatioi'.rot addition of Rs 3.10 lakh, an gtf_1e"l"./.:fg'1'Vs'sessee 'V i claimed as income genera.ted from which was not accepted by the treated it as undisclosed income_of._.the:"assesse_e*«for! period, and also on the aspect» Of 3 building constructed__b3r block period being taken as _i11corne....of. the assessee, assessable to tax in termsof the Act and on the premise that the .tribuinalV_:haV,ci the View that the assessing ;_~aut.ho1"it§'~\Az_as entitled"to'bring to tax as undisclosed income even if the particulars relating to the iv"g..__generation Vof'.'--V'ci'nc'ome had already been disclosed in the returnsuﬂledpforddthe period prior to search and as to whether 'thue,addition's made on such premise can form subject matter assessment under Section l58B(b) of the Act. 145

157. In the course of the hearing of the appeal, Sri A Shankar, learned counsel for the appellant--assessee"-has made a prayer to permit the assessee to raise-'iadditifonaigll1. questions such as questions relat_i_ng__to jthe"-.Vof_V 1"

limitation operating against the revenue 'terrns"of Sle»ct~ior1.:

158BE of the Act for passing on * 9' 26-5-1997 in respect of a,--search-----wh--iich..wasconducted on 18-3- 1996.

158. Though canvassed and Sri Shankar, appellant--assessee, who ﬁgureg as two appeals filed by the revenue and disposed' i.e. ITA Nos 257 and 258 of 200].,_§gwe have the questions independently 'therein. sake of record, we have formally allowed Vthe'prayervlloftptheh"appellant-assessee, made in this appeal through' a dated 21-1-2010 for raising the following Vpadiditgional substantial questions of law:

11." Whether the Tribunal was justified in law in not giving a finding in respect of the issue of limitation for passing the order of Block 147 of this court, as referred to by us whi.l.e_deal_ing K"

of 2001, are to be looked into.

161. Sri M V Sheshachala, learnledﬁstandingV_c'ou-nslelllllforl the V revenue, has raised a prelirninaryllpobjqection tolperinit such further questions being as it was not a question which h_ad::qbve_en ej§§p:fe.ssly":clanVassed before the assessing pursued the matter as ;;:main' by the tribunal by filing an against that order, but has sought to bring: it :.theMbackdoor method of first ﬁling a rectiﬁcation ll lllbefore the tribunal under the Section llll HlV254[2) of the Act, seeking for order passed by the tribunal in the V"--VV'»two appeals "the assessee and his spouse, but had .ll_fcf'_j:,.preferred present appeal only after the tribunal had rectify its main order in the two appeals for the 0' _limitledlpurpose of addition or otherwise of a sum of Rs 3.10 lalihhllto the undisclosed income of the assessee for the block 0"=._l'period and the question of limitation being not substantially 148 raised, which had received the attention of .

the instance of the assessee, in the absence"~of~..a"~di<rectu it appeal against the impugned order:

present appeal, purporting to be directed declining to review the main orderointhenliinitedl-Zquestioln of addition or otherwise of Rs 'question of limitation now sought to it additional substantial question; of _1aéVji'ditional grounds should not be' '-lg;-g1lﬁc1._theirapplication should be rejected. -------- M

162. Irrespective objections raised by the learned counsel revenue and though the question of is not a pure question of law of fact and law, nevertheless, we ./,,,..,,permit being raised only for the purpose of

-._l'.1'jv»-Satisfying"ourselves as to whether the question of limitation VV(jLi_ld totally come in the way of the assessing passing block assessment order and if there was absolutely a bar in law against passing assessment order on 149 a period of limitation, which is not made dependent on. any other aspect, but only on the ascertainment of and being capable of only one possibility, such' . cannot be examined, nevertheless, w_e...permiTt question in this appeal and examine of such question also.

163. We have already _ solvllfdarl as the question of limitation not a pure question of and law, in the present situation vﬁfhlaving regard to the language -the Act and the indication provided thererijlfl period of limitation, in an elastic nfianiaer land.l_,niot a rigid manner of a watertight having found that in the facts and , assesses's case and particularly having ,".,\.Vregard conduct of the assessee in seeking for further 'ev,enVHlto ﬁle a return of income in respect of the income for the block period after the expiry of the date up to which alone, the assessee contends, the &, 150 assessing officer has been enabled tompass order and beyond that day, he has no'=jui?i'sdlicti0n"

assessee had, by his own conduct, sought iitjavlce ~the assessment order beyond that enabling him to furnish details in in the sense, that the assessee wanted before passing the assessment4_.orde:r'::beerracceded to by the assessing officer-,.. the situation cannot be taken be assessing authority to pass assessment 26-5~l997 and that the assessment orders pavsseld on this day in terms of Section 'the Act arelbeyond the jurisdiction of the assessing offic_er.or'v.re're banried by Law. It is for this reason, we have e"~"indicatepd does not arise the need to examine the of each case, referred to and relied upon by Sri A learned counsel for the assessee in the judgments __rendered by other high courts on this question of limitation. T ..l'64--.*We would, with respect to the authorities cited at the hold in this case the question of limitation as posed

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Karnataka High Court

Smt Jyothi Kumari vs Asst Commissioner Of on 2 February, 2010

Bench: D.V.Shylendra Kumar, N.Ananda