- (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/returnedchronologically undisclosed income income1985 -86 Nil Nil1986 -87 Nil Nil1987 -88 660 Nil1988 -89 5,715 Nil1989 -90 11,209 Nil1990 -91 12,435 Nil1991 -92 12,806 Nil1992 -93 11,676 Nil1993 -94 15,557 Nil1994 -95 39,898 39,8981995 -96 8,939 8,939upto the date of search - - - - - - - - - - - - - - - -1,18,897 48,837 - - - - - - - - - - - - - - - - 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.
(3.) 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.;