P.D. Dinakaran, J.@mdashAgainst the order of the Tribunal in IT(SS)A No. 97/Mad/2001, dt. 17th May, 2005, the Revenue has preferred the appeal and raised the following substantial question of law :
Whether, on the facts and in the circumstances of the case, the Tribunal was right in excluding the total amount of Rs. 4,49,568 declared as income for the asst. yrs. 1996-97, 1997-98 and 1998-99, even though the assessee has not filed the returns of income within the dates but filed after the date of search in the computation of ''undisclosed income'' is valid ?
2. The Revenue is the appellant. This appeal relates to the block period from 1st April, 1988 to 9th Dec, 1998. There was a search conducted u/s 132 of the IT Act on 9th Dec, 1998 resulting in seizure of 724 gms. of jewellery valued at Rs. 2.69 lakhs and Kisan Vikas Patras to the value of Rs. 2.31 lakhs and other documents. The case of the assessee that while arriving at the gross total income, the gross total income should be reduced by the undisclosed income was negatived by the AO. The CIT(A) confirmed the view of the AO. The Tribunal, on appeal, following the decision of this Court in
3. It is fairly submitted by the learned Counsel appearing for the Revenue that the issue raised in the question is covered against the Revenue by the decision of this Court in Asstt. CIT v. A.R. Enterprises (supra). In the said decision a Division Bench of this Court, in which one of us was a party, held that the advance tax paid by the assessee cannot be lightly disregarded and it has its own statutory consequences. This Court, after referring to various decisions, also held as under :
There cannot be any manner of doubt that when the assessee pays advance tax, the advance tax payment is assessed by the assessee on the basis of self-assessed income, The advance tax reflects the income admitted by the assessee. When the assessee pays the advance tax, he discloses his income at the particular point of time, which may or may not be taxable on a subsequent date, on the return submitted by him u/s 139 or under Sub-sections (1) of Section 142 because of the assessee''s tax planning or he may claim exemption and refund of the tax paid, but for doing so he will have to show the income on which the advance tax is paid and then claim refund or complete exemption, as the case may be, as permissible under the relevant statute.... Disclosure of the self-assessed income by the assessee would only entitle the assessee to claim refund or exemption from tax as the assessee is required to show the income on the basis of which the advance tax is paid or ultimate claim is made. The moment the advance tax is paid, the taxable income at that point of time is disclosed to the Revenue by the assessee. It cannot be said by the Revenue that the advance tax paid would or may not be the tax payable on the basis of the ultimate assessment made and, therefore, it cannot be taken to be a representation of the income on which the advance tax was paid. The question is whether the income, which represents the payment of advance tax, would be said to be an undisclosed income when the payment of advance tax itself necessarily implies disclosure of the income on which the advance tax is paid by the assessee to the Revenue.... Under Clause (d) of Sub-sections (1) of Section 158BB, while assessing the aggregate of the total income, the income recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous year shall be taken into consideration where the previous year has not ended or the date of filing the return of the income under Sub-sections (1) of Section 139 has not expired. When the assessee is required to file the self-assessment for payment of the advance tax before the IT authorities the return of assessment would fall within the documents maintained in the normal course by the assessee and as such the income disclosed on payment of the advance tax would fall within Clause (d) of Sub-sections (1) of Section 158BB. In any case although there is a difference between the regular assessment and the block assessment, as we have already noticed, unless the provisions of the block assessment specifically bar the assessing authority from taking into consideration the income disclosed by the assessee on payment of the advance tax to be taken into consideration, the income disclosed by the assessee on payment of advance tax would be an income disclosed to the Revenue and cannot be treated as an income undisclosed for the relevant assessment year.
Learned counsel for the Revenue could not point out any provision on the basis of which we can hold that the income disclosed on payment of advance tax cannot be treated as disclosure of income, by virtue of a particular statutory provision under Chapter XIV-B of the Act.
For the discussions aforesaid, we answer the question in the negative and hold that the income disclosed on account of payment of the advance tax cannot be held to be undisclosed income for the purposes of block assessment.
4. In view of the above settled law, we are of the considered view that the Tribunal was right in remitting the matter back to the AO for the purpose of quantification of undisclosed income by taking into account the advance tax paid.
5. Further, we find that the question of law has not been happily framed and accordingly, we reframe the same as under :
Whether, on the facts and in the circumstances of the case, the Tribunal was right in remitting the matter and directing the AO to quantify the undisclosed income by taking into consideration the advance tax paid and decide the issue in accordance with law ?
6. In view of the abovesaid proposition of law, the question as reframed is answered in the affirmative and against the Revenue. The appeal is dismissed. No costs.
