AJAY KUMAR MITTAL, J. - (1.) THIS appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 18.7.2006, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for brevity, "the Tribunal") in IT (SS) A.No.68/Chandi/2004 for the block period 1.4.1988 to 5.10.1998.
(2.) ON 3.5.2007, the appeal was admitted to consider the following substantial question of law: - "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee having filed the return under Section 139 was entitled to the benefit of section 158BB (1) (b) of the I.T.Act disregarding the fact that the return was filed sufficiently after action under Section 132A of the I.T.Act was invoked?" Briefly, the facts as narrated in the appeal may be noticed. The assessee is an individual from whose possession a sum of Rs.7 lacs was seized by the police at Doraha Naka on 15.9.1998. The amount was requisitioned under Section 132A of the Act by the Director of Income Tax (Investigation) Ludhiana vide warrant of authorization issued on 5.10.1998. In compliance with the order dated 29.9.2000 passed by the Additional Sessions Judge, Ludhiana, the amount was handed over to the Income Tax Department on 9.8.2001. In response to the notice dated 7.4.2003 issued under Section 158BC of the Act requiring the assessee to file return of income for the block period 1.4.1988 to 5.10.1998, the assessee took the plea that the amount of Rs.7 lacs had been disclosed in the return for the assessment year 1999 -2000 and hence could not be the subject matter of assessment under Section 158BC of the Act. The assessee as per record, had filed his original return declaring income of Rs.52,950/ - on 10.3.2000 and in the revised return filed on 5.6.2000, the aforesaid amount of Rs.7 lacs was offered to tax. During the assessment proceedings, the assessee took the stand that the sum of Rs.7 lacs represented his earnings from betting in matches between April 1998 to 15.9.1998. However, no details of the matches were furnished. The Assessing officer completed the assessment at the undisclosed income of Rs.7,31,270/ - vide order dated 29.8.2003, Annexure A.1 under Section 158BC of the Act. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)]. Vide order dated 9.7.2004, Annexure A.2, the CIT(A) allowed the appeal holding that once the transactions stood disclosed in the regular return of income, the same could not be treated to be undisclosed income. The revenue went in appeal against the order passed by the CIT(A). Vide order dated 18.7.2006, Annexure A.3, the Tribunal dismissed the appeal holding that the assessee having filed the return under Section 139 of the Act was entitled to the reduction of Rs.7 lacs from the undisclosed income. Hence this appeal by the revenue.
(3.) LEARNED counsel for the revenue relying upon judgment of this Court in M.R.Singhal v. Assistant Commissioner of Income Tax, (2007) 290 ITR 162 submitted that where no advance tax or self assessment tax had been paid by the assessee and return was filed under Section 139(4) of the Act, the same could not be termed as a return filed before the due date specified under Section 139(1) for the purposes of Section 158BB(1) (c) of the Act. According to the learned counsel, the Tribunal was thus in error in reducing Rs.7 lacs while calculating undisclosed income of the assessee.;