(1.) The assessee herein carries on business as a proprietor in the name and style of M/s.Rekha Silk Industries. It is seen from the facts narrated in the orders of the Assessing Officer that there was a search operation on 31.8.1995 in the premises of Shri.Sridhar Sarada and Shri.Ramachandran Sarada. The search operation resulted in recovery of materials relating to several transactions in stock and shares. Incidentally, the assessee is also residing in the same premises, namely, 64, Godown Street, Madras - 1, where the search was conducted. Based on the materials recovered pertaining to the assessee, notice under Section 158 BC(a) of the Income Tax Act was sent to the assessee on 05.12.2005 calling upon the assessee to file income tax returns within 15 days from the date of service of notice. In response to that notice, the assessee filed a letter on 23rd December, 1995 stating that the papers relating to the search to the extent available were being looked into by his Auditors M/s.B.M.Kumbhat & Co., Madras; that it would take at least one month for them to go into the books and prepare the return of income by the Chartered Accountant. In the circumstances, the assessee pleaded time to file returns for the block period by 15th January, 1996. Subsequent to that, by proceedings dated 17.7.1996, the Income Tax Officer directed the assessee to produce certain documents pertaining to the details found in the materials as to the purchase of shares in the last ten years giving the details of the shares purchased, cost of purchase, dealer's name, cost of construction of building constructed by the company during the last ten years and such other particulars relevant to the business of the assessee.
(2.) It is seen from the files produced before this Court by the Revenue that the assessee filed returns, based on which the Assessing Officer sent a notice on 12.8.1996 insisting on particulars called for, to be furnished immediately. In response to the details called for, the assessee's Chartered Accountant filed reply on 9th August, 1996 and 20th August, 1996. Based on the details thus furnished by the assessee, ultimately, the assessment was made on the assessee on 26th August, 1996 under Section 143(3) read with Section 158BC of the Income Tax Act.
(3.) The assessment order clearly pointed out that the search operation was made on 31.8.1995 in the premises of Shri.Sridhar Sarada and Shri.Ramachandra Sarada and that the details gathered therein revealed several transactions in stock and shares by the assessee. After considering the objections of the assessee, the assessment order was thus finalised and a demand was made. Aggrieved by this, the assessee went on appeal before the Income Tax Appellate Tribunal as per the provisions as it stood then.