COMMISSIONER OF INCOME TAX Vs. PEERCHAND RATANLAL BAID

JUDGEMENT

(1.) THIS appeal under Section 260a of the Income Tax Act, 1961 (hereinafter referred to as the Act) is directed against an order dated 17. 1. 2006 passed by the Income Tax Appellate Tribunal, Guwahati Bench (hereinafter referred to as the Tribunal ). By the aforesaid order the learned Tribunal has interfered with the addition of undisclosed income of the respondent assessee to the extent of Rs. 13,66,715/- for the block period 1986-87 to 1996-97 as made by the Assessing Officer.

(2.) THE brief facts relevant to the present adjudication may be noticed at this stage. There was a search in the Baid Group of Companies on 13. 9. 1995. The respondent-assessee, a HUF, as the proprietor of one of the group companies, filed the block return for the period 1986-87 to 1996-97 showing undisclosed income of Rs. 60 lakhs. The assessment was completed under Section 158bc of the Act on 30. 9. 96 determining an undisclosed income of Rs. 1,17,25,416/ -. The respondent assessee filed a first appeal before the learned Tribunal against the aforesaid order of assessment which was partly allowed by order dated 28. 8. 2000. In terms of the direction of the learned Tribunal the undisclosed income for the block period was revised to Rs. 24,37,850/- by order dated 30. 7. 2001 of the Assessing Officer. Subsequently it was found by the Assessing Officer that in the case of another group company i. e. M/s Baid Commercial Enterprises, for the same block period i. e. 1986-87 to 1996-97, the learned Tribunal by order dated 27. 2. 2002 had observed that some of the documents seized in the said case pertained to the respondent assessee. Accordingly, the Assessing Officer issued a letter dated 12. 12. 2002 asking the assessee to explain why the amount of Rs. 59,18,246/- covered by the aforesaid seized documents or any part thereof should not be added to the total income of the assessee for the block period. The explanation given by the respondent assessee having been found to be unsatisfactory the Assessing Officer added a sum of Rs. 13,66,715/- to the undisclosed income of the assessee for the block period revising the same to Rs. 38,04,570/ -. This was so done by the order of the Assessing Officer dated 26. 3. 2003. Aggrieved, the assessee moved the learned Tribunal in appeal in which the order dated 17. 1. 2006, impugned in the present proceeding, was passed by the learned Tribunal.

(3.) IN view of the arguments that have been raised before us and the issues that have been stuck by the parties, it will be necessary to amplify the order of the learned Tribunal and understand the basis of the conclusion arrived at. The finding of the learned Tribunal that the Assessing Officer had failed to initiate proceedings in terms of Section 153 of the Act read with Explanation 3 necessarily follows a conclusion that in the present case notice under Section 148 of the Act was necessary and no such notice having been given to the assessee, the provisions of Section 153 did not authorise such notice to be issued any further.