Law:

Section:

Section 132 of the Income-tax Act, 1961 - Search and seizure - General - Whether order under section 132(5) operates in a different field and is not final and conclusive for all purposes - Held, yes - Whether approval order under section 132(5) cannot be treated as a direction and has nothing to do with an assessment order under section 143(3) - Held, yes FACTS A survey operation was carried out by the revenue under the provisions of section 133A at the business premises of the assessee and two diaries were seized wherein sales were recorded for a period of seven months. It was on the basis of these diaries that the profit at the rate of 14 per cent was considered and the assessee declared an extra income of Rs. 22 lakhs in respect of endorsement mentioned in the order. The revenue was of the view that the entire amount should be taxed. The Assessing Officer estimated the undisclosed income in a summary manner based on his on the basis of material available and calculated the amount of tax on the income so estimated. The Commissioner (Appeals) as well as the Tribunal were of the opinion that once the Deputy Commissioner had approved the calculation of the amount of tax and the income was estimated as undisclosed income, it was not open to the Assessing Officer to take a different view. In other words, the Tribunal expressed an opinion that the Assessing Officer was not entitled to take a different view than the view taken by the Deputy Commissioner in the absence of other fresh materials. On reference : HELD It is undisputed that the order under section 132(5) operates in a different field. The order made under section 132(5) is not final and conclusive for all purposes. The approval under section 132(5) cannot be treated as a direction. While making an inquiry, on finding of further material the Assessing Officer may require to take a different view, and, therefore, in reality it is not correct to say that the approval under section 132(5) is in the nature of direction. The Tribunal was of the view that the order made by the Assessing Officer on the basis of material available which had got approval after application of mind could not be disturbed without…

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