- (1.) THIS appeal and the cross objections have been filed by the Revenue and the assessee, respectively, against the order of the learned Tribunal dt. 19.3.2004. Before the Tribunal cross appeals were filed; one by the assessee, and the other by the Revenue. The matter relates to block assessment, for the block period 1987 -88 to 1997 98. The appeal has been admitted, vide order dt. 17.12.2004, by framing following substantial questions of law. 1. Whether the jurisdiction of Assessing Officer for assessment of undisclosed income in a block assessment under Section 158BB of the Income Tax Act, 1961 is limited to the material found during the search or on the basis of information available the Assessing Officer could estimate the income to the best of his judgment de hors the material on record, appreciating the factual circumstances of the case? 2. Whether in the facts and circumstances of the case the learned tribunal was justified in deleting the entire trading additions so also the addition of Rs. 550559/ - on account of unexplained opening capital made by the A.O.?
(2.) THEREAFTER the assessee filed cross objections, exercising his right under Section 260A(7) read with Order 41 Rule 22 C.P.C., and this Court, vide order dt. 7.7.2005, admitted the cross objections, by framing following substantial question of law: Whether the ITAT has misconstrued the provisions of Section 158BE providing for limitation for completion of block assessment and has grossly erred in rejecting the ground of limitation raised by the respondent - assessee before the ITAT. It is contended by the Learned Counsel for the assessee, that the learned Tribunal has grossly erred in proceeding on a basis that in the present case books of account were seized on 3.1.97, and the words appearing in Section 158BE(2)(b) are 'books of account required' and, therefore, limitation would be two years. According to the learned Counsel the present case is not a case covered by the eventuality of 'books of account required' but is covered by the eventuality of notice being served under this chapter on such other person in respect of search initiated, and therefore, the relevant question to be considered was as to when the search was initiated in respect of that other person. If it is found, that that was initiated on or after 1.1.97, then obviously the limitation would be two years, and if it is found that the search was initiated after 30.6.95 but before 1.1.97 then the limitation would be one year. Learned Counsel invited pointed attention of the Court to the provisions of Section 158BE, 132, and 132A of the Income Tax Act in this regard, so also to the provisions of 158BC and 158 BD.
(3.) ON the other hand Learned Counsel for the Revenue supported the impugned judgment on the question of limitation by contending that the notice was given to the assessee on the basis of books of account or other documents seized, and since the seizure took place on 3.1.97, therefore, the period of two years was available for making final assessment, and therefore, the assessment cannot be said to be time barred.;