R.K Agrawal, J.:— In all these writ petitions, the petitioners who belong to the same group, have challenged the notices issued to them under Section 148 of Income Tax Act, 1961 (hereinafter referred to as “the Act”) in respect of the various assessment years beginning from 2000-2001 to 2002-2003, which vary in each of the petition. As all these petitions raise common questions of law, they have been heard together and are being decided by a common judgment.
2. Civil Misc. Writ Petition No. 504 of 2006, filed by Chandra Prakash Agrawal, is being treated as the leading petition. We are, therefore, giving the facts of this petition. Except for the assessment years and the assessment orders having been passed either under Section 143(1)(a) or under Section 143(3) of the Act, the facts are common in all the petitions. Briefly stated, the facts giving rise to the present petition are as follows:—
According to the petitioner Chandra Prakash Agrawal, he is a partner of M/s. Sri Ram Chandra Prakash, situate at Kayamganj in the district of Farrukhabad and is the head of group of business houses, functioning in the name and style of M/s. J.M Tobacco Company, M/s. J.M Agrawal Tobacco Company Private Limited and M/s. Satya Prakash and Company. For the assessment year 2000-2001 he had filed his return of income showing an income of Rs. 16,82,676/- and agricultural income of Rs. 1,24,582/-. He had paid the tax of Rs. 5,14,583/-. The return of income so filed was accepted, under the provisions of Section 143(1)(a) of the Act, by the Assessing Authority on 1-1-2001. A search was conducted on 7-6-2001 by the officers of the Directorate General, Central Excise, New Delhi at the business premises of the petitioner, which prepared a panchanama on 8-6-2001. Certain documents were seized by the search party, which finds mention in the said panchanama. On the basis of the search conducted by the Central Excise Department, the Deputy Director of Income Tax (Investigation), Agra initiated proceedings under Section 132-A by issuance of notice dated 27-3-2002. The petitioner was required to give statement on the documents/papers seized by the Central Excise Department. In response to the notice dated 27-3-2002, the petitioner submitted that the papers seized by the Central Excise Department do not reflect his income but, still with a view to purchase peace, offered a sum of Rs. 50,00,000/- in the proceedings under Section 132-A of the Act in respect of the group of cases of M/s. J.M Tobacco Company, M/s. J.M Agrawal Tobacco Company Private Limited, M/s. Satya Prakash and Company, Laxmi Narain Agarwal and himself. It is alleged by the petitioner that the Deputy Director of Income Tax (Investigation), Agra sent a requisition on 18-4-2002 purporting to be under Section 132-A of the Act by which he had requisitioned the seized material from the Central Excise Department. The petitioner wrote a letter on 10-2-2005 asking the Deputy Director of Income Tax (Investigation), Agra to initiate proceedings under Section 158-BC of the Act for completing block assessment pursuant to surrender of Rs. 50,00,000/- for the entire group. The Deputy Director of Income Tax (Investigation), Agra, vide letter dated 7-3-2005, had informed the petitioner that since the original papers/documents/accounts have not been made available by the Central Excise Authorities, notice under Section 158-BC of the Act cannot be issued. Thereafter, the petitioner, vide letter dated 9-3-2005, requested the Additional Commissioner of Income Tax, Farrukhabad, to contact the Deputy Director of Income Tax (Investigation), Agra for issuing notice under Section 158-BC of the Act for completing the block assessment. Instead of initiating the proceedings under Section 158-BC of the Act, the Assistant Commissioner of Income Tax, Circle-2, Farrukhabad, respondent No. 1, had initiated proceeding for reassessment under Section 148 of the Act by issuing a notice dated 22-3-2005. The petitioner, vide application dated 9-3-2005, requested a month's time for compliance of the notice. However, vide application dated 11-4-2005, the petitioner requested the respondent No. 1 to treat the return already filed by him on 21-8-2000 for the assessment year 2000-2001 as a return filed in compliance with the notice dated 22-3-2005. He also requested for disclosing the reason for reopening the assessment under Section 148 of the Act. The respondent No. 1, vide notice dated 10-11-2005, issued under Section 142(1) of the Act, asked the petitioner to appear and produce certain documents to which he filed a detailed objections. The respondent No. 1 had supplied the reasons vide letter dated 9-12-2005. The notice dated 22-3-2005 issued under Section 148 of the Act is under challenge in the present writ petition on various grounds inter alia that the proceeding under Section 148 of the Act is not meant for roving and fishing enquiry and the Assessing Authority had no jurisdiction to reopen the assessment in respect of different firm to iron out the actual alleged suppression of income as he had disclosed its income truly and faithfully at the time of furnishing the return. Further, the Assessing Authority had no reasons to believe before issuing the notice in question and from the perusal of the reason it is apparent that the name of the parties who are said to have taken the loan/milk account and corroborated the transaction, are missing and, therefore, it cannot be said that any income has escaped assessment. The notice in question has also been challenged on the ground that as the books of account and other documents have been requisitioned under Section 132-A of the Act from the Central Excise Department on 18-4-2002, the assessment of undisclosed income can only be made under Section 158-BC of the Act, as per provision of Chapter XIV-B of the Act and no action under Section 148 of the Act can be taken. Further, the Assessing Officer had no jurisdiction to reopen the assessment on the basis of the photostat copy of the seized material when the original document is not with him especially when the petitioner had already surrendered a sum of Rs. 50,00,000/- for the entire group of proceeding under Section 132 of the Act before the Deputy Director of Income Tax (Investigation), Agra, consequent to receipt of notice under Section 158-BC of the Act to which income, if any, pertained and, therefore, the entire proceedings including the notice being wholly illegal and without jurisdiction, is liable to be quashed.
3. We have heard Sri S.P Gupta, learned senior counsel, assisted by Sri Rakesh Ranjan Agrawal, on behalf of the petitioners and Sri A.N Mahajan, learned Standing Counsel, appearing on behalf of the respondents.
4. At the outset it may be stated that even though in the petition several grounds have been taken to challenge the notice issued under Section 148 of the Act, but during the course of hearing, Sri S.P Gupta, learned senior counsel, appearing for the petitioners, confined his argument only on the question that proceedings under Section 158-BC of the Act alone could have been taken and not the proceeding under Section 148 of the Act, which has been illegally done.
5. Sri Gupta, learned Senior Counsel, submitted that on the basis of the search conducted by the officers of the Central Excise Department on 7th and 8th of June, 2001 at the business premises of the petitioner, the Director of Income Tax (Investigation), Kanpur, had sent a requisition under Section 132-A of the Act on 27-3-2002 requiring the Central Excise Department to deliver the seized books of account, documents, etc. The books of account and other documents having been requisitioned under Section 132-A of the Act, recourse to proceedings under Section 148 of the Act by issuance of the notice dated 22-3-2005, is wholly without jurisdiction as special procedure for assessment of search cases has been provided under Chapter XIV-B of the Act. The proceeding, if any, could have been taken only under Section 158-BA of the Act read with other provisions of the said Chapter, as Section 158-BA which starts with a non obstante clause, completely excludes the assessment of undisclosed income under any other provision of the Act in case where the search has been initiated under Section 132 or the books of account, other documents or any asset are requisitioned under Section 132-A of the Act. He has relied upon a decision of the Gujarat High Court in the case of Rushil Industries Ltd. v. Harsh Prakash, (2001) 251 ITR 608 : (2001 Tax LR 1049), and the Madhya Pradesh High Court in the case of Smt. Harbans Kaur Bhatia v. Commissioner of Income Tax, (2005) 274 ITR 298.
6. Sri A.N Mahajan, learned Standing Counsel, on the other hand, submitted that even though a requisition under Section 132-A of the Act was sent on 27-3-2002 to the Central Excise Department for delivering the seized books of account and other documents, yet full documents have not been delivered as would be clear from the record of proceedings, filed as Annexure 3-A to the writ petition. According to him, the requisition would be complete only when the entire seized documents and books of account are delivered to the Department and only thereafter the provisions of Chapter XIV-B of the Act would be applicable. Till such time the requisition is not complete, the Department is at liberty to take recourse to proceeding Under Section 148 of the Act for assessing the escaped income. He further submitted that the entire Section 132-A of the Act has to be read as a whole for deciding as to whether the provisions of Section 158-BA of the Act is applicable or not. According to him, the exercise undertaken under Section 132-A of the Act would be complete only when the books of account or other documents have been delivered to the Requisitioning Officer in view of the specific provisions of Sub-section (3) of Section 132-A of the Act. He also invited the attention of the Court to the first proviso to Section 158-BC of the Act, which provides that no notice under Section 148 of the Act is required to be issued for the purposes of the proceeding under this Chapter and submitted that for proceeding under Chapter XIV-B of the Act, no notice under Section 148 of the Act is required to be issued. According to him, the words “are requisitioned”, as mentioned in sub-section (1) of Section 158-BA of the Act, refer to a situation where the books of account and other documents are actually delivered to the Department after its requisition and not a stage prior to it. He, thus, submitted that the notice under Section 148 of the Act issued to the petitioners is wholly legal and within jurisdiction.
7. In reply, Sri S.P Gupta, learned senior counsel, submitted that under Sub-section (2) of Section 132-A of the Act it is incumbent upon the authority to whom a requisition has been made to deliver the books of account, other documents or assets to the Requisitioning Authority and, therefore, it is not dependent upon the conclusion of the proceeding under Section 132-A of the Act. He also referred to the provisions of Section 158-BE of the Act and submitted that the limitation is still available for making the assessment under Chapter XIV-B of the Act. According to him, as, admittedly, in the present case a requisition under Section 132-A of the Act has been made by the Income Tax Authority on 27-3-2002 requisitioning the books of account and other documents seized by the Central Excise Department, the proceeding under Section 148 of the Act cannot be initiated and the only course available to the Department is to take proceeding under Chapter XIV-B of the Act which provided for special procedure for search cases and other allied matters.
8. We have given our anxious consideration to various pleas raised by the learned counsel for the parties.
9. For adjudicating upon the issue involved in the present writ petition, we feel it proper, for ready reference, to reproduce the provisions of Section 132-A and Chapter XIV-B of the Act which contains Sections 158-B to 158-BI:—
“132-A. Powers to requisition books of account, etc.
(1) Where the Director General or Director or the Chief Commissioner or Commissioner in consequence of information in his possession, has reason to believe that—
(a) any person to whom a summons under sub-section (1) of Section 37 of the Indian Income Tax Act, 1922 (11 of 1922), or under sub-section (1) of Section 131 of this Act, or a notice under sub-section (4) of Section 22 of the Indian Income Tax Act, 1922, or under sub-section (1) of Section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force, or
(b) any books of account or other documents will be useful for or relevant to, any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force, or
(c) any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of the Indian Income Tax Act, 1922 (11 of 1922), or this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force, then,
the Director General or Director or the Chief Commissioner or Commissioner may authorise any Joint Director, Joint Commissioner, Assistant Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or Income Tax Officer (hereafter in this section and in sub-section (2) of Section 278-D referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, to deliver such books of account, other documents or assets to the requisitioning officer.
(2) On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody.
(3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub-section (4-A) to (14) (both inclusive) of Section 132 and Section 132-B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under sub-section (1) of Section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of this section and as if for the words “the authorised officer” occurring in any of the aforesaid sub-sections (4-A) to (14), the words “the requisitioning officer” were substituted.
CHAPTER XIV-B
Special Procedure for Assessment of Search Cases
158-B. Definitions.
In this Chapter, unless the context otherwise requires,—
(a) block period means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted under Section 132 or any requisition was made under Section 132-A and also includes the period up to the date of the commencement of such search or date of such requisition in the previous year in which the said search was conducted or requisition was made:
Provided that where the search is initiated or the requisition is made before the 1st day of June, 2001, the provisions of this clause shall have effect as if for the words “six assessment years”, the words “ten assessment years” had been substituted;
(b) “undisclosed income” includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false.
158-BA. Assessment of undisclosed income as a result of search.
(1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995 a search is initiated under Section 132 or books of account, 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, as income of the block period irrespective of the previous year or years to which such income re lates and irrespective of the fact whether regular assessment for any one or more of the relevant assessment years is pending or not.
Explanation.— For the removal of doubts, it is hereby declared that—
(a) the assessment made under this Chapter shall be in addition to the regular assessment in respect of each previous year included in the block period;
(b) the total undisclosed income relating to the block period shall not include the income assessed in any regular assessment as income of such block period;
(c) the income assessed in this Chapter shall not be included in the regular assessment of any previous year included in the block period.
(3) Where the assessee proves to the satisfaction of the Assessing Officer that any part of income referred to in sub-section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income under sub-section (1) of Section 139 for any previous year has not expired, and such income or the transactions relating to such income are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years, the said income shall not be included in the block period.
158-BB. Computation of undisclosed income of the block period.
(1) The undisclosed income of the block period shall be the aggregate of the total income of the previous years 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 account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, as reduced by the aggregate of the total income, or as the case may be, as increased by the aggregate of the losses of such previous years, determined,—
(a) where assessments under Section 143 or Section 144 or Section 147 have been concluded prior to the date of commencement of the search or the date of requisition, on the basis of such assessments;
(b) where returns of income have been filed under Section 139 or in response to a notice issued under sub-section (1) of Section 142 or Section 148 but assessments 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 documents maintained in the normal course on or before the date of the search or requisition where such entries result in computation of loss for any previous year falling in the block period;
(B) on the basis of entries as recorded in the books of account and other documents maintained in the normal course on or before me date of the search or requisition where such income does not exceed the maximum amount not chargeable to tax for any previous year falling in the block period;
(ca) where the due date for filing a return of income has expired, but no return of income has been filed, as nil, in cases not falling under clause (c);
(d) where the previous year has not ended or the date of filing the return of income under sub-section (1) of Section 139 has not expired, on the basis of entries relating to such income or transactions as 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 years;
(e) where any order of settlement has been made under sub-section (4) of Section 245-D, on the basis of such order;
(f) where an assessment of undisclosed income had been made earlier under clause (c) of Section 158-BC, on the basis of such assessment.
Explanation.— For the purposes of determination of undisclosed income,—
(a) the total income or loss of each previous year shall, for the purpose of aggregation, be taken as the total income or loss computed in accordance with the provisions of this Act without giving effect to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of Section 32;
Provided that in computing deductions under Chapter VI-A for the purposes of the said aggregation, effect shall be given to set off of brought forward losses under Chapter VI or unabsorbed depreciation under sub-section (2) of Section 32;
(b) of a firm, returned income and total income assessed for each of the previous years falling within the block period shall be income determined before allowing deduction of salary, interest, commission, bonus or remuneration by whatever name called to any partner not being a working partner:
Provided that undisclosed income of the firm so determined shall not be chargeable to tax in the hands of the partners, whether on allocation or on account of enhancement.
(c) assessment under Section 143 includes determination of income under sub-section (1) or sub-section (1-B) of Section 143.
(2) In computing the undisclosed income of the block period, the provisions of Sections 68,69,69-A, 69-B and 69-C shall, so far as may be, apply and references to “financial year” in those sections shall be construed 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 under Chapter VI or unabsorbed depreciation under sub-section (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.
158-BC. Procedure for block assessment.
Where any search has been conducted under Section 132 or books of account, other documents or assets are requisitioned under Section 132-A, in the case of any person, then,—
(a) the Assessing Officer shall—
(i) in respect of search initiated or books of account or other documents or any assets requisitioned after 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 fifteen days;
(ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days,
as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of sub-section (1) of Section 142, setting forth his total income including the undisclosed income for the block period:
Provided that no notice under Section 148 is required to be issued for the purposes of proceeding under this Chapter;
Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;
(b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in Section 158-BB and the provisions of Section 142, sub-sections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply;
(c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment;
(d) the assets seized under Section 132 or requisitioned under Section 132-A shall be dealt with in accordance with the provisions of Section 132-B.
158-BD. Undisclosed income of any other person.
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 of any assets were requisitioned under Section 132-A, then, the books of account, 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-BC against such other person and the provisions of this Chapter shall apply accordingly.
158-BE. Time-limit for completion of block assessment.
(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 authorisations 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 after the 30th day of June, 1995 but before the 1st day of January, 1997;
(b) within two years from the end of the month in which the last of the authorisations 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 or 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 account or other documents or any assets 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 notice under this Chapter was served on such other person in respect of search initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997.
Explanation 1.— In computing the period of limitation for the purposes of this section,—
(i) the period during which the assessment proceeding is stayed by an order of injunction of any Court; or
(ii) the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2-A) of Section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section; or
(iii) the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee to be reheard under the proviso to Section 129; or
(iv) in a case where an application made before the Settlement Commission under Section 245-C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of Section 245-D is received by the Commissioner under sub-section (2) of that section, shall be excluded:
Provided that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-section (1) or sub-section (2) available to the Assessing Officer for making an order under clause (c) of Section 158-BC is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly.
Explanation 2.— For the removal of doubts, it is hereby declared that the authorisation referred to in sub-section (1) shall be deemed to have been executed,
(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued;
(b) in the case of requisition under Section 132-A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.
158-BF. Certain interests and penalties not to be levied or imposed.
No interest under the provisions of Sections 234-A, 234-B or 234-C or penalty under the provisions of clause (c) of sub-section (1) of Section 271 or Section 271-A or Section 271-B shall be levied or imposed upon the assessee in respect of the undisclosed income determined in the block assessment.
158-BFA. Levy of interest and penalty in certain cases.
(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 document 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 one per cent of the tax on undisclosed income, determined under clause (c) of Section 158-BC, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice, and—
(a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or
(b) where no return has been furnished, on the date of completion of assessment under clause (c) of Section 158-BC.
(2) The Assessing Officer or the Commissioner (Appeals) in the course of any proceedings 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:
Provided that no order imposing penalty shall be made in respect of a person if—
(i) such person has furnished a return under clause (a) of Section 158-BC;
(ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable;
(iii) evidence of tax paid is furnished along with the return; and
(iv) an appeal is not filed against the assessment of that part of income which is shown in the return:
Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in excess of the income shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return.
(3) No order imposing a 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 Director, as the case may be, where the amount of penalty exceeds twenty thousand rupees except with the previous approval of the Joint Commissioner or 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) under Section 246 or Section 246-A or an appeal to the Appellate Tribunal under Section 253, 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 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 months from the end of the month in which such order of revision is passed;
(e) in any case other than those mentioned in clauses (c) and (d), 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 action for imposition of penalty is initiated, whichever period expires later;
(f) in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A, after the 30th day of June, 1995 but before the 1st day of January, 1997.
Explanation.— In computing the period of limitation for the purpose of this section,—
(i) the time taken in giving an opportunity to the assessee to be reheard under the proviso to Section 129;
(ii) the period during which the immunity granted under Section 245-H remained in force; and
(iii) the period during which the proceedings under sub-section (2) are stayed by an order or injunction of any Court,
shall be excluded.
(4) An income tax authority on making an order under sub-section (2) imposing a penalty, unless he is himself an Assessing Officer, shall forthwith sent a copy of such order to the Assessing Officer.
158-BG. Authority competent to make block assessment.
The order of assessment for the block period shall be passed by an Assessing Officer not below the rank of an Assistant Commissioner or Deputy Commissioner or an Assistant Director or Deputy Director, as the case may be:
Provided that no such order shall be passed without the previous approval of—
(a) the Commissioner or Director, as the case may be, in respect of search initiated under Section 132 or books of account, other documents or any assets requisitioned under Section 132-A, after the 30th day of June, 1995 but before the 1st day of January, 1997;
(b) the Joint Commissioner or the Joint Director, as the case may be, 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.
158-BH. Application of other provisions of this Act.—
Save as otherwise provided in this Chapter, all other provisions of this Act shall apply to assessment made under this Chapter.
158-BI. Chapter not to apply after certain date.— The provisions of this Chapter shall not apply where a search is initiated under Section 132, or books of account, other documents or any assets are requisitioned under Section 132-A after 31st day of May, 2003.”
10. From a reading of Section 132-A of the Act it is clear that sub-section (1) thereof empowers the various authorities to requisition books of account, documents or any assets either from the person to whom it belongs in case such authority has reasons to believe that such person would not produce, or cause to be produced before the income tax authorities or where it is in the custody of some other authority in law. Sub-section (2) of Section 132-A mandates the authority which has the custody of the books of account or other documents to deliver them to the requisitioning officer forthwith or when such officer or authority forms an opinion that it is no longer necessary to retain the same in its custody. Sub-section (3) of Section 132-A provides that after the books of account, other documents or assets which have been requisitioned, have been delivered to the requisitioning officer, the provisions of sub-sections (4-A) to (14) of Section 132 and Section 132-B shall mutatis mutandis apply. Thus, it is clear that the requisition is complete only when the seized books of account and other documents, which have been requisitioned, have been delivered to the requisitioning authority.
11. Chapter XIV-B containing Sections 158-B to 158-BH have been inserted by the Finance Act, 1995 with effect from 1-7-1995. As is clear from the heading given under Chapter XIV-B, it introduced a new scheme of assessment of undisclosed income determined as a result of search, which is assessed separately as the income of designed period consisting often previous years, now reduced to six previous years by the Finance Act, 2001 with effect from 1-6-2001 preceding the previous year in which the search was conducted and also the previous year of the current year upto the date of search.
12. Chapter XIV-B of the Act provides for special procedure for the assessment of search cases. It deals with the assessment of block period in respect of undisclosed income as a result of search conducted under Section 132 or requisition made under Section 132-A of the Act. “Block period” has been defined to mean six assessment years preceding the previous year in which the search was conducted under Section 132 or any requisition was made under Section 132-A of the Act including the period up to the date of the commencement of the search or date of requisition in the previous year in which the said search was conducted or requisition was made.
13. Section 158-BA of the Act opens with a non obstante clause. It mandates the Assessing Officer to assess the undisclosed income of a person only in accordance with the provisions of Chapter XIV-B in case where a search has been initiated after 30-6-1995 under Section 132 or the books of account, other documents or any assets are requisitioned under Section 132-A of the Act. The total undisclosed income relating to the block period has been made chargeable to tax at a fixed rate of 60% as the income of the block period irrespective of the previous year or years to which such income relates. The Explanation to sub-section (2) Section 158-BA of the Act makes it clear that the assessment made under Chapter XIV-B is in addition to be regular assessment in respect of each previous year included in the block period and it shall not include the income assessed in any regular assessment and the income assessed under this Chapter shall not be included in the regular assessment of any previous year included in the block period. Sub-section (3) of Section 158-BA of the Act excludes that part of the income from being taken into consideration while making block assessment which are recorded on or before the date of the search or requisition in the books of account or other documents maintained in the normal course relating to such previous years, where the previous year has not ended or the date of filing the return of income under sub-section (1) of Section 139 for any previous year has not expired.
14. Section 158-BB of the Act provides for computing of undisclosed income of the block period. It provides for determination of the total income on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence, with certain other specifications.
15. Section 158-BC of the Act provides for the procedure for block assessment.
16. Section 158-BD of the Act deals with the assessment of undisclosed income of any other person which is found belonging to any other person 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-A. It provides that the relevant books of account, other documents or assets would be handed over to the Assessing Officer having jurisdiction over such other person and the provisions of this Chapter including Section 158-BC of the Act have been made applicable.
17. Section 158-BE of the Act provides for the time-limit for completion of block assessment. It provides for a limitation of one year from the end of the month in which the last of the authorisations in case where search under Section 132 or for requisition under Section 132-A, was executed after 30-6-1995 but before 1-1-1997 and two years where the search or requisition has been made on or after 1-1-1997. It also provides for limitation of completion of block assessment in the case of the other person referred to in Section 158-BD as one year from the end of the month in which the notice was served where the search was initiated or the books of account or other documents or any assets were requisitioned after 30-6-1995 but before 1-1-1997 and two years where search was initiated or books of account or other documents or any assets were requisitioned on or after 1-1-1997. Explanation 1 excludes certain period while computing the period of limitation. The proviso to Explanation 1 gives the maximum period of sixty days for completion of the proceeding if after excluding the period provided under Explanation 1 is less than sixty days. Explanation 2 clarifies what would be the date of execution of the authorisation in case of search and requisition. It provides that the authorisation shall be deemed to have been executed, in the case of search, on the conclusion of search as recorded in the last panchnama and, in the case of requisition under Section 132-A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.
18. Section 158-BF of the Act excludes the levy of interest and penalty under Sections 234-A, 234-B or 234-C and penalty under the provisions of clause (c) of sub-section (1) of Section 271 or Section 271-A or Section 271-B.
19. Section 158-BFA of the Act deals with the levy of interest and penalty for not filing of the return and for other matters under this Chapter.
20. Section 158-BG of the Act provides that the assessment for the block period shall not be made by an Assessing Officer not below the rank of an Assistant Commissioner or Deputy Commissioner or an Assistant Director or Deputy Director, as the case may be. Under the proviso to Section 158-BG, it has been provided that, before passing the order, the previous approval of the Commissioner or Director in the case of search/requisition made before 1-1-1997 and the Joint Commissioner or the Joint Director in the case of search or requisition made on or after 1-1-1997 is required.
21. Section 158-BH of the Act makes all other provisions of the Act applicable in respect of assessment made under this Chapter except what has been specifically provided.
22. Section 158-BI of the Act, however, excludes the applicability of the Chapter XIV-B where search is initiated under Section 132, or books of account, other documents or any assets are requisitioned under Section 132-A after 31-5-2003.
23. As Chapter XIV-B deals with the special procedure for assessment of undisclosed/concealed income in respect of a block period of ten/six years, the authorities have to proceed in accordance with the provisions laid down in this Chapter where the conditions mentioned in Section 158-BA of the Act are fulfilled. It may be mentioned here that Section 158-BA starts with a non obstante clause which will have an overriding effect.
24. The learned author, Justice G.P Singh, in Principles of Statutory Interpretation, Ninth Edition, 2004, at page 318, while dealing with the non obstante clause, has stated as follows:—
“A clause beginning with ‘notwithstanding anything contained in this Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force’, is sometimes appended to a section in the beginning, with a view to give the enacting part of the section in case of conflict an overriding effect over the provision or Act mentioned in the non obstante clause. It is equivalent to saying that in spite of the provision or Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment. Thus a non obstante clause may be used as a legislative device to modify the ambit of the provision or law mentioned in the non obstante clause or to override it in specified circumstances. The phrase ‘notwithstanding anything in’ is used in contradistinction to the phrase ‘subject to’, the latter conveying the idea of a provision yielding place to another provision or other provisions to which it is made subject. A non obstante clause must also be distinguished from the phrase ‘without prejudice’. A provision enacted ‘without prejudice’ to another provision has not the effect of affecting the operation of the other provision and any action taken under it must not be inconsistent with such other provision. Ordinarily, there is a close approximation between the non obstante clause and the enacting part of the section and the non obstante clause may throw some light as to the scope and ambit of the enacting part in case of its ambiguity but when the enacting part is clear its scope cannot be cut down or enlarged by resort to non obstante clause.”
25. The Apex Court in the case of Chandravarkar Sita Ratan Rao v. Ashalata S. Guram, (1986) 4 SCC 447 : (AIR 1987 SC 117), in the context of construction of non obstante clause, after noticing the observations made by the Apex Court in the case of Aswini Kumar Ghosh v. Arabinda Bose, 1953 (1) SCR 377 : (AIR 1952 SC 369) and Dominion of India v. Shrinbai A. Irani, 1955 (1) SCR 206 : (AIR 1954 SC 596), has observed as follows:—
“67. A clause beginning with the expression “notwithstanding anything contained in the Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force, or in any contract” is more often than not appended to a section in the beginning with a view to give the enacting part of the section in case of conflict an overriding effect over the provision of the Act or the contract mentioned in the non obstante clause. It is equivalent to saying that in spite of the provision of the Act or any other Act mentioned in the non obstante clause or any contract or document mentioned the enactment following it will have its full operation or that the provisions embraced in the non obstante clause would not be an impediment for an operation of the enactment. See in this connection the observations of this Court in South India Corporation (P) Ltd. v. Secretary, Board of Revenue, Trivandrum (1964) 4 SCR 280 : (AIR 1964 SC 207)”.
“68. It is well settled that the expression ‘notwithstanding’ is in contradistinction to the phrase ‘subject to’, the latter conveying the idea of a provision yielding place to another provision or other provisions to which it is made subject. This will be clarified in the instant case by the comparison of sub-section (1) of S. 15 with sub-section (1) of S. 15-A. We are therefore unable to accept, with respect, the view expressed by the Full Bench of the Bombay High Court as relied on by the learned single Judge in the judgment under appeal.”
26. The Apex Court in the case of Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt.) v. V.K Devi (1996) 4 SCC 76 : (AIR 1996 SC 1963), has observed as follows:—
“77. Non obstante clause is sometimes appended to a section in the beginning with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision or Act mentioned in that clause. It is equivalent to saying that in spite of the provisions or Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provision indicated in the non obstante clause will not be an impediment for the operation of the enactment. (See Union of India v. G.M Kokil, 1984 Supp SCC 196 : (AIR 1984 SC 1022); Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1984 Supp SCC 196) (supra); R.S Raghunath v. State of Karnataka (1991 (4) JT (SC) 82) : ((1992) 1 SCC 335 : AIR 1992 SC 81) (supra); G.P Singh's Principles of Statutory Interpretation.)”
27. The principles laid down in the aforesaid cases have been reiterated by the Apex Court in the case of Iridium India Telecom Ltd. v. Motorola Inc.., (2005) 2 SCC 145 : AIR 2005 SC 514.
28. The provision of Chapter XIV, which provides for procedure of assessment, is a general procedure to be adopted for making assessment whereas the provisions contained in Chapter XIV-B provides for assessment in special cases. It is a special procedure for making assessment of search cases and other specified matters. Thus, the provisions of Chapter XIV-B will have to be resorted to in case where search under S. 132 of the Act has been conducted on or after 30-6-1995 but before 31-5-2003 or the books of account, other documents or assets are requisitioned under. S. 132-A of the Act during the period 30-6-1995 and 31-5-2003. The phrase “Notwithstanding anything contained in any other provisions of this Act” used in S. 158-BA of the Act, would have an overriding effect over other provisions of the Act prescribing for assessment etc. in cases where the requirement of S. 158-BA of the Act is fulfilled.
29. We find that the Punjab and Haryana High Court in the case of Raja Ram Kulwant Rai v. Assistant Commissioner of Income Tax, (1997) 227 ITR 187 : (1998 Tax LR 662), has held that the purpose of introduction of Chapter XIV-B is that the undisclosed income detected as a result of any search initiated or any requisition made after June 30,1995, shall be assessed separately, as the income of the block years. Special procedure was introduced for framing of assessment of search cases. Section 158-BA starts with a non obstante clause that notwithstanding anything contained in any other provisions of the Act after June 30,1995, cases arising out of search and seizure under S. 132 shall be assessed in accordance with the newly introduced Chapter XIV-B.
30. The Madras High Court in the case of B. Noorsingh v. Union of India (2001) 249 ITR 378, has held that S. 158-BA provides that special procedure set out in Chapter XIV-B shall be adopted in search cases covered by the provisions “notwithstanding anything contained in any other provision of this Act”.
31. We are in respectful agreement with the view expressed by the learned Judges of the Punjab and Haryana and Madras High Courts in the aforesaid decisions. Thus, where the search has been initiated under S. 132 of the Act or the books of account, other documents or assets are requisitioned under S. 132-A of the Act between 30-6-1995 and 30-5-2003, assessment of undisclosed income for the block period can only be made under Chapter XIV-B and not under Chapter XIV of the Act.
32. Prior to insertion of Explanation to sub-section (2) of S. 158-BA by the Finance (No. 2) Act, 1998 retrospectively, with effect from 1-7-1995, i.e, when Chapter XIV-B was introduced, there was a divergence of opinion among the various High Courts on the question whether any assessment under Chapter XIV can be made when assessment under Chapter XIV-B has to be made. The Punjab and Haryana High Court, in the case of Raja Ram Kulwant Rai (1998 Tax LR 662) (supra), has held that once an assessment is framed qua a particular year falling within the block period of 10 years, then no other assessment under any other provisions of the 1961 Act can be framed, meaning thereby under the block, period of 10 years income of any year, covered by any of the block period, could not be determined afresh as all pending assessment of those years stood merged in the connected assessment under S. 158-BC of the Act. The same view was taken by the Kerala High Court in the case of N.T John v. Commissioner of Income Tax (1997) 228 ITR 314 : (1997 Tax LR 535). It may be mentioned here that the aforesaid decision has since been reversed by the Kerala High Court in the case of Commissioner of Income Tax v. N.T John (2003) 259 ITR 224 : (2003 Tax LR 927). However, the Gujarat High Court in the case of N.R Paper and Board Limited v. Deputy Commissioner of Income Tax (1998) 234 ITR 733, has held that the essence of the special procedure of Chapter XIV-B is to provide for an assessment of an undisclosed income detected as a result of a search without affecting the regular assessments made or to be made. Thus, special provision are devised to operate in the separate field of undisclosed income and are clearly in addition to the regular assessments covering the previous years falling in the block period and the Assessing Officer can proceed with the regular assessment which was pending at the time when the block assessment is undertaken for the undisclosed income or is completed. After the insertion of Explanation to sub-section (2) of S. 158-BA of the Act, the Parliament has made its intention clear that the special procedure for making assessment of undisclosed income as a result of search and specified matters as provided under Chapter XIV-B is confined to the undisclosed material found therein and does not in any way effect the regular assessment provided under Chapter XIV of the Act in respect of the income not discovered or relatable to the search under S. 132 or the requisition of documents under S. 132-A of the Act. The Kerala High Court in the case of Malayil Bankers v. Assistant Commissioner of Income Tax (1999) 236 ITR 869, the Gujarat High Court in the case of Commissioner of Income Tax v. Shambhulal C. Bachkaniwala (2000) 245 ITR 488 and the Calcutta High Court in the case of Deputy Commissioner of Income Tax v. Shaw Wallace and Co. Ltd. (2001) 248 ITR 81, has taken the view that in view of the plain language of S. 158-BA of the Act and the Explanation thereto, the Assessing Officer is not debarred from framing an assessment under S. 143 even where an assessment has been framed for a block period under S. 158-BC of the Act. Thus, we are of the opinion that even where an assessment for a block period has been made or is to be made under Chapter XIV-B of the Act, regular assessment proceedings including reassessment under Chapter XIV of the Act are not barred.
33. This would also be clear from a reading of sub-section (1) of S. 158-BB of the Act. Prior to substitution of the phrase “in accordance with the provisions of Chapter IV, on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer” occurring in sub-section (1) of S. 158-BB of the Act by the Finance Act, 2002 with effect from 1-7-1995 by the following phrase “in accordance with the provisions of this Act, on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence”, it could have been said that the income which can be included in the block assessment is only such income which is directly evidenced by the material found during the search and does not include the income which has been discovered on the basis of post-search enquiries made during the block assessment proceeding. However, after the amendment made by the Finance Act, 2002, the assessment of undisclosed income can only be based on the evidence found in the search and the material or information gathered in post-search enquiry made on the basis of the evidence found in the search.
34. The Madhya Pradesh High Court in the case of Commissioner of Income Tax v. Khushal Chand Nirmal Kumar (2003) 263 ITR 77 : (2004 Tax LR 534), has held that in view of the language of sub-section (1) of S. 158-BB of the Act, the addition with regard to investment in construction cannot be made in a block assessment on account of unexplained assessment on account of Departmental Valuer's Report obtained subsequently to order of regular assessment even though such report was confronted to the assessee and he was not able to give any explanation. Thus, the assessment of undisclosed income of the block period has to be confined on the basis of evidence found as a result of search or requisition of books of account or other documents and such other materials or information as are available with the Assessing Officer and relatable to such evidence and not in respect of those materials or information which are not relatable to search or requisi- tion.
35. In the case of Caltradeco Steel Sales (P) Ltd. v. Deputy Commissioner of Income Tax (2000) 243 ITR 643, the Calcutta High Court has held that the block assessment under Chapter XIV-B of the Act pertains to undisclosed income and the regular assessment under S. 143(3) pertains to a regular income and both the proceeding can go simultaneously as both have different type of income and one proceeding is for undisclosed income and the other proceeding under S. 143(3) is for disclosed income.
36. In the case of Rushil Industries Ltd. (2001 Tax LR 1049) (supra), the Gujarat High Court has held that a bare reading of the provisions of S. 158-BD would show that for taking action under the said section, the Assessing Officer is merely required to be satisfied that the books of account or other documents or assets found in the search show undisclosed income of a person other than one against whom the search was conducted.
37. In the case of Smt. Harbans Kaur Bhatia (supra) the Madhya Pradesh High Court, on the facts found therein, has held that it was thus a clear case which falls in the wording of S. 158-B(b) i.e, “would not have been disclosed for the purpose of this Act” and the income in question had to be taxed in the hands of the assessee as per the provisions applicable to block assessment read with S. 113 of the Act treating the income to be an income from undisclosed one as defined under S. 158-B(b)”.
38. Having discussed the scheme of various provisions of Chapter XIV-B of the Act, we now come to the issue as to whether the provisions of aforesaid Chapter is attracted in the present case or not. The crucial words for the applicability of Chapter XIV-B of the Act are contained in sub-section (1) of S. 158-BA of the Act. It is applicable in cases where a search is initiated under S. 132 of the Act or books of account, other documents or any assets are requisitioned under S. 132-A of the Act. It is not in dispute that in the present case no search under S. 132 has been conducted by the Income Tax Department. The search, if any, was conducted on 7/8-6-2001 by the Central Excise Department. The Income Tax Department had sent a requisition on 27-3-2002 under S. 132-A of the Act requisitioning the books of account and other documents seized by the Central Excise Department. The record of the proceeding dated 18-4-2002 show that the requisition was not fully executed as all the books of account and other documents had not been delivered to the Requisitioning Authority.
39. We have already referred to the scheme of S. 132-A of the Act and have come to the conclusion that it deals with the power and procedure for requisitioning the books of account etc. and would be complete only when the requisitioned books of account and other documents have been delivered. Sub-section (1) of S. 158-BA of the Act uses the words “are requisitioned”. The word “requisition” is not one of art and does not connote the same state of things in every particular case and in its various meaning as are determinable in specific instance by other facts.
40. In Words and Phrases, Permanent Edition, Vol. 37, at page 141, the word “requisition” has been assigned several meanings inter alia as follows:—
“The “requisition” of Belgian vessel by Belgian Government under order which prohibited vessel from entering into time charters and required contemplated voyages to be approved by Belgian Government in no way affected shipper's liability for freight under charter executed after date of such requisition and before date when possession of vessel was taken by Belgian Government. The word “requisitioned” is not one of art, and does no connote the same state of things in every particular case, and its various meanings are determinable in a specific instance by other facts, and it may mean that the vessel's title is taken, as in condemnation proceeding, or her exclusive or partial use for the requisitioning Government, or merely that her ownership and earnings remain in her owner, but only for such voyages as are permitted or directed by the Government with a view to the national interest. Mitsubishi Shoji Kalsha Limited v. Societe Purfina Maritime, C.C.A Cal., 133 F 2d 552, 556.
The “requisition” of a Belgian vessel by Belgian Government was not completed until such time as actual possession of vessel was taken by requisitioning Government, the word “requisitioned” signifying a completed or executed requisition. The Laurent Meeus, DC Cal., 43 F Supp 807, 808.”
41. In Stroud's Judicial Dictionary of Words and Phrases, Fifth Edition, by John S. James, Volume 4, published by Sweet and Maxwell Limited, London, in 1986, at page 2256, various meanings of the word “requisition” has been given as follows:—
“REQUISITION. (1) As to conditions of sale, a “requisition” (or “inquiry”, which is synonymous) on title, is a request based on a defect in title (or its evidence) arising on the abstract; and “objection” may arise aliunde (per Blackburn, J., Waddell v. Woolfe, LR 9 QB 515) See INVESTIGATING. See further TITLE.
(2) “Requisition” in regulations made under Emergency Powers Act, 1920 (c. 55): see France, Fenwick & Co. v. R. (1927) 1 KB 458.
(3) “Requisition” includes the taking of property in full ownership, the taking of the possession of property, and the acquisition of a right to have the property used in a particular manner without any taking of possession” (per Latham, C.J in Australasian United Steam Navigation Co. v. Shipping Control Board (1946) VLR b82, 85).
(4) “Requisitioning” is not a term of art and has different meanings. Its usual meaning is nothing more than hiring without taking the property out of the owner although the owner has no alternative whether he will accept the proposition of hiring or not. It may, however, involve the taking over of the actual domination of a chattel. (The Steaua Romana (1944) P. 43).”
42. Thus, one of the meanings which can be assigned to the word “requisition” is taking of actual possession of all the items.
43. We are fortified in our aforesaid view with the provisions made in S. 158-BE of the Act, which provides for time-limit for completion of block assessment. It specifically provides for counting the limitation from the end of the month in which the list of the authorisation for search under S. 132 or for requisition under S. 132-A of the Act was executed. Explanation 2 to S. 158-BE of the Act clarifies that the authorisation shall be deemed to have been executed in the case of a search, on the conclusion of search as recorded in the last panchnama and in the case of requisition under S. 132-A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. Thus, we are of the considered opinion that the provisions of Chapter XIV-B of the Act would come into play only when the books of account or other documents or assets are actually received by the Assessing Officer pursuant to the requisition made under S. 132-A of the Act.
44. Looking at it from another angle also, it is the only conclusion which one can arrive. If the entire books of account and other documents which have been requisitioned under S. 132-A by the Authorised Officer is not in the possession of the Department, the proceedings under Chapter XIV-B of the Act would be of no consequence as it does not speak of piecemeal block assessment. The block assessment has to be made for a composite period of 10 years or 6 years, as the case may be, in which the entire evidence collected as a result of the requisition under S. 132-A of the Act and all other materials or information available with the Assessing Officer relatable to such evidence has to be taken into consideration.
45. In view of the foregoing discussions, we are of the considered opinion that the proceedings initiated under S. 148 of the Act cannot be said to be without jurisdiction. However, we make it clear that in the proceedings for reassessment under S. 148 of the Act, material or evidence which are relatable to the documents for which the requisition has been sent under S. 132-A cannot be taken into consideration.
46. No other point was pressed. In the result, we do not find any force in these petitions. They are accordingly dismissed with the observations made above. However, in the facts and in the circumstances of the case, parties are directed to bear their own costs.
47. Petition dismissed.