Contents :
- Definitions, 158 B.
- Assessment of undisclosed income as a result of search, 158 BA.
- Computation of undisclosed income of the block period 158, BB.
- Procedure for block assessment (Section 158 BC).
- Undisclosed income of any other person.
- Time limit for completion of block assessment, Section 158 BE.
- Certain interests and penalties not to be levied or imposed, section 158 BF.
- Penalty under sub-section (2) shall be made.
- Authority competent to make the block assessment 158 BG.
- Application of other provision of this Act. Section, 158 BH.
- Chapter not be apply after certain date Section 158 BI.
The title itself clarified that the assessment in a specific circumstances is made by the tax authority. Many times it happens that the person avoid the necessary information, or by any person, the tax authority needs to search the business premises as well as residential premises for the required evidence for determining the real income of the assessee.
When such searches is made by the tax authority, the assessment is completed after giving the reasonable opportunity to the assessee for the explanation of such income. In this chapter the procedure of the assessment after the search is discussed.
- Definitions, 158 B -
a. "Block period" means the period comparison previous year relevant to six assessment year preceding the previous year in which the search was conducted under section 132.
b. "Undisclosed income" includes any money, bullion, jewellry or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, would not have been disclosed for the purpose of this act or any expenses, deduction or allowance claimed under this act which is found to be false.
- Assessment of undisclosed income as a result of search, 158 BA -
1. Where after the 30th day of June, 1995 a search is initiated under section 132 or books of accounts, other documents or any assets are requisitioned under section 132 A in the case of any person, then the assessing officer shall proceed to assess the undisclosed income in accordance with the provisions of this chapter.
2. The total undisclosed income relating to the block period shall be charged to Tax, at the rate specified in Section 113.
- Computation of undisclosed income of the block period 158, BB -
1. The undisclosed income of the block period shall be the aggregate of the total income of the previous year falling within the block period computed, in accordance with the provisions of this act, on the basis of evidence found as a result of search or requisition of books of accounts or other documents and such other material or information as are available with the assessing officer and relatable to such evidence determined,
A) Where assessment under section 143 or section 144 or section 147 have been conducted, on the basis of such assessments.
B) Where returns of income have been filed but assessment have not been made till the date of search or requisition, on the basis of the income disclosed in such returns.
C) Where the due date for filing a return of income has expired but no return of income has been filed.
a) On the basis of entries as recorded in the books of account and other document maintained in the normal courses on or before the due date of the search or requisition where such entries result in computation of loss for any previous year Falling in the block period, or
b) On the basis of entries as recorded in the books of account and other documents in the normal courses on or before the due date of the search of requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year Falling in the block period,
c) Where the due date for filing return of income has expired but no return of income has been filed as nil,
d) Where the previous year has not ended or the date of filing the return of income under subsection (1) of Section 139 has not expired, on the basis of entries relating to such income or transaction as recorded in the books of account and other documents maintained in the normal courses on or before the date of the search or requisition relating to such previous year,
e) Where any order of settlement has been made under subsection (4) of section 245 D, on the basis of such order,
f) Where an assessment of undisclosed income has been made earlier under clause (c) of Section 158 BC, on the basis of such as assessment.
2. In computing the undisclosed income of the block period, the provisions of section 68, 69, 69 A, 69 B and 69 C shall, so far as many be apply and references to financial year in those section shall be constructed as references to the relevant previous year falling in the block period including the previous year ending with the date of search or of the requisition.
3. The burden of proving to the satisfaction of the assessing officer that any undisclosed income had already been disclosed in any return of income filed by the assessee before the commencement of search or of the requisition, as the case may be, shall be on the assessee.
4. For the purpose of assessment under this chapter, losses brought forward from the previous year, unabsorbed depreciation under subsection (2) of section 32 shall not be set off against the undisclosed income determined in the block assessment under this chapter, but may be carried forward for being set off in the regular assessments.
- Procedure for block assessment (Section 158 BC) -
Where any search has been conducted under section 132 or books of account other document or assets are requisitioned under section 132 A, in the case of any person then,
The assessing officer shall,
a) In respect of search initiated or books of account or other documents or any asset requisitioned after the 30th day of June, 1995 but before the 1st day of January, 1997 serve a notice to such person requiring him to furnish within such time not being less than 15 days.
b) In respect of search initiated for books of account or other document or any assets requisitioned on or after the 1st day of January, 1997 serve notice to such person requiring him to furnish within such time not being less than 15 days but not more than 45 days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a written under clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period.
- Undisclosed income of any other person -
Section 158 BD :
Where the assessing officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132, then the books of accounts other documents or assets seized or requisitioned shall be handed over to the assessing officer having jurisdiction over such other person and that assessing officer shall proceed under section 158 C against such other person and the provisions of this chapter shall apply accordingly.
- Time limit for completion of block assessment, Section 158 BE -
1. The order under section 158 BC shall be passed -
a) Within one year from the end of the month in which the last of the authorization for Search under section 132 or for requisition under section 132 A, as the case may be, was excluded in cases where a search is initiated or books of account or other documents of the asset are requisitioned after 30th day of June, 1995 but the before the 1st day of January, 1997.
b) Within two years from the end of the month in which the last of the authorization for Search under section 132 or for requisition under section 132 A, as the case may be was executed in cases where a search is initiated or books of account or other documents or any assets are requisitioned on the after the 1st day of January, 1997.
2. The period of limitation for completion of block assessment in the case of the other person referred to in section 158 BD shall be -
a) One year from the end of the month in which the notice under this chapter was served on such other person in respect of search initiated or books of accounts or other documents or any asset requisitioned after the 30th day of June, 1995 but before the 1st day of January, 1997, and
b) Two years from the end of the month in which the notice under this chapter was served on such other person in respect of search initiated for books of account or other document or any assets are requisitioned on or after the 1st day of January, 1977.
Certain interests and penalties not to be levied or imposed, section 158 BF -
No interest under the provision of section 234 A, 234 B or 234 C, or penalty under the provisions of clause (c) of sub-section (1) of section 271, section 271 A, section 271 B shall be levied or imposed upon the assessee in respect of the undisclosed income determined in the block assessment.
- Levy of interest and penalty in certain cases, Section 158 BFA -
1. Where the return of total income including undisclosed income for the block period, in respect of search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132 A on or after the 1st day of January, 1997 as required by a notice under clause (a) of section 158 BC, is furnished after the expiry of the period specified in such notice, or is not furnished. The assessee shall be liable to pay simple interest at the rate of 1% of the tax on undisclosed income, determined for every month or part of month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice.
2. The assessing officer or the Commissioner (appeals) in the course of any processing under this chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the assessing officer under clause (c) of section 158 BC.
3. Penalty under sub-section (2) shall be made -
a) Unless an assessee has been given a reasonable opportunity of being heard.
b) By the assistant commissioner or deputy commissioner or the assistant director or deputy directors the case may be, where the amount of penalty exceeds 20,000 rupees except with the provision approval of the joint commissioner of the joint director as the case may be,
c) In a case where the assessment is the subject matter of an appeal to the Commissioner (Appeals) or an appeal to the appellate tribunal, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed or six months from the end of the month in which the order of the Commissioner (appeals) or, as the case may be, the appellate Tribunal is received by the Chief Commissioner or the Commissioner, whichever period expires later,
d) In a case where the assessment is the subject matter of revision under section 263, after the expiry of six month from the end of the month in which such order of revision is passed.
e) In any case other than those mentioned in clause (c) and (d), after the expiry of the financial year in which the processings, in the course of which action for the imposition of penalty has been initiated, are completed or six month from the end of the month in which action for imposition of penalty is initiated, whichever period expired later,
f) In respect of such Initiated under section 132 or books of account other document or any asset requisitioned under section 132 A, after the 30th day of June, 1995 but before the 1st day of January, 1997.
4. An income tax authority on making an order imposing a penalty, unless he is himself an assessing officer, shall forthwith send a copy of such order to the assessing officer.
Authority competent to make the block assessment 158 BG -
The order of assessment for the block period shall be passed by and assessing officer not below the rank of an assistant commissioner of deputy commissioner or an assistant director or Deputy Director, as the case may be.
Application of other provision of this Act. Section, 158 BH -
All other provision of this act shall apply to assessment made under this chapter.
Chapter not be apply after certain date Section 158 BI -
The provision of this chapter shall not apply where a search is initiated under section 132, of books of account, other document or any assets are requisitioned under section 132 A after the 31st day of May, 2003.