Law:

Section:

Income disclosed on account of payment of advance tax cannot be held to be undisclosed income for purposes of block assessment Section 158B of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income - Whether income disclosed by assessee on payment of advance tax would be an income disclosed to revenue and cannot be treated as 'undisclosed income' for relevant assessment year for purposes of block assessment - Held, yes FACTS The question arose for consideration was "does the income of the assessees can be said to have been disclosed to the revenue when assessees paid advance tax over it and whether on account of such disclosure the income so disclosed shall not be treated to be an income from undisclosed source, while the Income-tax authority take up the proceedings in block assessment ?" On appeal : HELD Chapter-XIVB lays down the special procedure for assessment of search cases and provides for assessment of undisclosed income as a result of search. The proceedings under the regular assessment and the assessment for the block period stand to operate on different fields. Therefore, the considerations which would be attracted while making the assessment in exercise of the powers under sections 143(2) and (3) for the regular assessment would stand on a different footing and will be governed by different provisions of the Act; whereas the assessment for the block period as a result of the search and seizure would be governed by different provisions of the Act and would be made by the Assessing Officer in accordance therewith. [Para 5] Scheme of the Act enjoins a duty on the assessee to pay the advance tax by submission of return before the Assessing Officer. The advance tax is paid on the self-assessment of the income by the assessee which is an admission of the 'current income' by the assessee. Under clause (d) of sub-section (1) of section 158BB while assessing the aggregate of the total income, the income 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 year shall be taken into consideration where the previous year has not…

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