Karnataka High Court
The Commissioner Of Income Tax vs Gauthamchand Bhandari on 13 September, 2010
Bench: D.V.Shylendra Kumar, H.S.Kempanna
5 Bankers. This survey under J business premises of the assessee the,co'nsequenc"e of the 0' search under Section 132, which:"h--ad at the residential premises of the. iasse-s_see, "though the survey, it appears, had fo'l'lolvved-- ,irhr;ne'dli,ateiy_ on the heels of the search. ~- 1 ~ ' 6. It appears, laterffiled a return of income for 13999-2000 and had claimed that__ was the income of the accountingperiod' 31-3~2000. As a sequel to the spearchlof V_tl1.eV',resi_de'ntial premises of the assessee the 'officials of the department followed up the matter.,4l')y;'is:sL1,ing a notice dated 20~9--1999 invoking the Act. The assessee~respondent by
filing of income for the block period on 4-11- «-"pnveniently disclosed a sum of Rs 1,26, 100/-- from l_l_o_ut¥.lloi' 50.00 lakh which was without dispute the 0 .._4undisclosed income of the assessee even as admitted earlier and as is established later, claiming that the Tvlliability. fof Rs 32,78,368/-- on the assessee. 6 balance of Rs 50.00 lakh is being offered to tax in the regular return that he intended to file for the assessrr1e'nt'~.__ year 1999-2000.
7. Though, it appears that the date '3for:_.:
return of income for the assessment yearwas 3.100-47501999, the assessee while did not such'-. but nevertheless filed the as was not totally prohibited
8. The assessing0"'~officer£.s,While ' not give much credence or '1rnpo;r:%.1an"c*:a"to'"the retu'r11"filed by the assessee for the assessment' chose to proceed against the ass"ess'ee_i'jn respect of the entire undisclosed and assessed it for the block 19-7-1999 in terms of the provisions Section of the Act. The assessment order at _.flj,*Anr1»e;(ure§Ce_.il:'to the writ petition resulted in total tax The i assessing officer, by passing a protective assessment I .,,.
7 order for the entire sum of Rs 50.00 lakh on the basis ___of the return filed by the assessee for the assessment._'year"'--_' 1999-2000, nevertheless sought to enforce assessment order keeping in abeyancethe en'force1nent the assessment made on the return"*for7._th:e assess1ne:j't._. year 1999-2000 as a protective .
9. It is in this state of appealed to the commissioner of without success, as in all-i12--2001 [copy at agreed with the View talgen officer and dismissed the appeal.
T asisessee lflcarried the matter further to the and met with success, as he found l0""'~v"acceptan:ce the tribunal for his version that the ''~«-Tiv'as__s'essing .0 officer could not have assessed the entire Rs 50.00 lakh as though it is income of the llillljlocklperiod, as even in accordance with the statutory 8 provisions, there was still time and scope for the assessee to file a return of income for the balance period accounting period, particularly as the search . place on 19-7-1999 and subst_a.ntial '-.o»fll."'the accounting period was still ahead and the assessee could have consi_derable"'..i_nco1he and whereafter alone the.assessee"p'cou.ld havofileld the return of income for the assessrnent 999-2000 and therefore bringingto -tax Vthezincome of this accounting to 19-7-1999 alone» was perinissilgle;"jforltl'ie aussesjsment and with the specific case tl1ellassesse'e---,loeing that the income out of Rs 50.00_1akh"-.fo'r .th--is97pei*i'od, a sum of Rs 1,26,100/- ;_'j'should'.r__l':1ay-e been assessed for the regular assessment and the assessing officer and the "appellate commissioner having not chosen to action in ~..l'.j'j--V'accordancewith this claim of the assessee, the tribunal allow the appeal.
9
11. It is this contention of the assess'ee~ favour with the tribunal and the t_ribuna1"has,: 'thereforel allowed the appeal of the assessce,'~reVersed the ~ord:ers~ of the assessing officer and the appellate_ commissioner and has directed the assessing"otiicergto' --_on the basis of the return filed by the asses1see.'f' * *
12. It is now to this court in appeal, has committed an error in law in .9 the premise that the assessee was entitled togget-.._this undisclosed income for the balance _ period of the accounting year 1-4-1998 to a.nd.._up to '1~9»7--1999 and that the actual date 'beginning:ofV't.h'e----_block period being 20-7 ~1989, as the blockperiod riecessarily goes back for a period of 10 years °"' V from the date Isearch.
iA9ppeai' having been admitted on the substantial questions of law as indicated above, and the assessee hiaving been put on notice, the matter is taken up for E ',,..,,«L , s 11 the block period, even while an option was 3 assessee to file return of income of accounting year i.e. on and after ofidsearchil filing a regular return of ending with the accounting.yeari'duArin searcih had been conducted. * *
15. Sri Seshachala tribunal has overlooked the been brought into the in terms of Finance Act, 200CV)V"»».Ain"6"5 of the Act, which has given retroactive effect" from 1-7 -1995, the date _from vvhicl1eA.Chap'terV--§"{IV;B was added to the Act.
"_is that in terms of the legislative changes, have ensured that the statutory é provisions as stand now are as if they were on the statute 'since the inception i.e. since the introduction of _"ChAapter--XIV--B into the Act, but have also misunderstood Vtghelldefinition of the phrases 'undisclosed income' and the 15 the order of the tribunal and we have also through the statuary provisions with.,some:' Seshachala.
20. We find that the object of B into the statute book the need for invoking reopening of the Act and the a limitation"pl.ace:dtherein the interest of the revenue'; legislature in its experienceglanldt. thought it fit that the recourse 147 of the Act had only encouraged -dishonest?' assessees and was also counter~productive"'for____the revenue and the purpose of providing a,Vdegr_e'e. of protection to honest assessees, who :ii_led'l~l:tl'1'eir returns of income and also not to keep tinkeri'ngvv\7ith the concluded assessment, have all .. QVer".----a period, fully taken advantage of by unsc.ru»pulous, evasive assessees making illegal gains at of the revenue and at the cost of the society and *»therefore in our opinion the provisions of Chapter XIV--A "facts or in law.
19 the material on record, but being one passed_.-§r:n'ore',j'p:i--n confusion and misunderstanding of the facts is set aside and the order passed by'-thej"assessing"'officer as confirmed by the appellate"Co'rnmissioner is resto.re:
and affirmed.
25. We cannot avoid obserying' quality of orders that are in exercise of its appellate ofthe Act are found to be many a times the orders are non--speaking orders and has no cjo1"relationthe'V'fact situation that prevails in a "give't1.ga'se.
26; that the members of the tribunal have d'evelope'd"'; an unhealthy habit of quoting totally judgments which are not applicable at all to the If the case, to pass orders not otherwise sustainable We strongly deprecate such a tendency on the part of the members of the tribunal, which is quite naturally a professional tribunal comprised /...,