Rajasthan High Court - Jaipur
Commissioner Of Income Tax vs Smt. Sharmila Pandey on 27 January, 2005
Equivalent citations: (2005)197CTR(RAJ)561
JUDGMENT
1. This appeal was admitted in terms of the following question :
"Whether the Tribunal has erred in law in holding that in respect of the assessment years for which no regular returns of income are filed, the income of such years shall not be treated as undisclosed income of the assessee ?"
2. A search under Section 132(1) was conducted at the residential premises of the assessee on 9th Nov., 1995. A notice under Section 158BC was issued to the assessee on 9th Feb., 1996. Notice for the block year was served on the assessee. She had filed regular returns of her income only for the asst. yrs. 1995-96 and 1996-97. The block period for assessment after the search is 1985-86 to 1994-95 and in 1995-96, only the period till the date of search. At p. 10, the AO has shown the position of total income including the undisclosed income and the returned income/assessed income of the block period as under :
Previous Year Total income including Assessed/returned
chronologically undisclosed income income
1985-86 Nil Nil
1986-87 Nil Nil
1987-88 660 Nil
1988-89 5,715 Nil
1989-90 11,209 Nil
1990-91 12,435 Nil
1991-92 12,806 Nil
1992-93 11,676 Nil
1993-94 15,557 Nil
1994-95 39,898 39,898
1995-96 8,939 8,939
upto the date of search
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1,18,897 48,837
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3. The total undisclosed income thus assessed by the AO is Rs. 70,060. Being aggrieved, the assessee filed appeal before the Tribunal. The Tribunal has considered the fact that when the assessee has earned income below taxable limit, the assessee is not obliged to file return and that the amount recorded in the regular books of account, which is below taxable limit, cannot be treated as undisclosed income of the assessee.
4. At the outset, learned counsel for the assessee brought to our notice the amendment made in 2002 whereby Clause (c) of Sub-section (1) of Section 158BB has been substituted and this amendment has been made with retrospective effect from 1st July, 1995. Therefore, in the light of this amendment, on the basis of entries recorded in the books of account, that amount cannot be treated as undisclosed income.
5. Mr. R.B. Mathur submits that the assessment was made on 29th Nov., 1996 and even the Tribunal has passed order in appeal on 7th April, 1998. Therefore, the amendment whereby Clause (c) of Sub-section (1) of Section 158BB has been substituted, did not exist. That amendment has been made in 2002 though with retrospective effect. Therefore, when this amendment was not there, the account books for the period when the assessee has shown income were not looked into as the assessee has shown income below taxable limit. Therefore, what relief the assessee is entitled in the light of this amendment, the matter can be remitted back to the AO.
6. Considering the admitted facts and when the block assessment was made and even the Tribunal has passed order in the appeal, Clause (c) of Sub-section (1) of Section 158BB did not exist. That has been substituted in 2002 though made effective from 1st July, 1995. Therefore, the AO has no occasion to consider the case of the assessee in the light of this amendment.
7. In the instant case, we remit the matter back to the AO to consider the case of the assessee for concerned block assessment year in the light of amendment which has been made in 2002 but made effective from 1st July, 1995.
The appeal stands disposed of accordingly.