COMMISSIONER OF INCOME TAX Vs. ASHIM KRISHNA MONDAL

JUDGEMENT

(1.) This appeal has been preferred on four grounds of which the fourth one is general and is implicit in ground No. 1. Before we take up ground No. 1, we propose to deal with grounds Nos. 2 and 3, viz. :

(2.) In the present case, when the learned Tribunal had given its decision, this amendment was not there. It seems that the learned Tribunal had correctly interpreted the law and given a right decision in excluding the income for the years below the taxable limit as was held in M.M. George [2002] 254 ITR 45 by the Kerala High Court. The amendment so brought about has since been given effect from July 1, 1995, viz., before such search and seizure was held. Therefore, the amendment should be deemed to have been in the statute at the time when search and seizure were held and such benefit that has been given to the assessee by the Tribunal can be said to be justified and in accordance with law. Similar question arose in CIT v. M.M. Thomas [2004] 265 ITR 327 again before the Kerala High Court where it was held that since the search under Section 132 of the Income-tax Act, 1961, was conducted on November 22, 1995, that is after the retrospective amendment of Sub-clause (B) of Clause (c) of Sub-section (1) of Section 158BB, the income below the taxable limit of a previous year could not be included as undisclosed income of the block period.

(3.) In this case, search was held on November 3, 1995, which is definitely after July 1, 1995, attracting the application of the amended provision, which is deemed to be there on the statute on the date when searches were held. Therefore, grounds Nos. 2 and 3 are to be answered against the Department and in favour of the assessee. Since we are in agreement with the decisions in M.M. George [2002] 254 ITR 45 (Ker) and M.M. Thomas, respectively, having regard to the amended provision incorporated in the Section itself by the Finance Act, 2002, with retrospective effect from July 1, 1995, these two questions are answered in favour of the assessee and against the Department Ground No. 1 :