Law:

Section:

Section 142, read with sections 132 and 158BC, of the Income-tax Act, 1961 - Assessment - Inquiry before assessment -Whether machinery for passing assessment orders in search cases commences with search itself and after search, various stages may take place and ultimately, same may culminate in assessment order - Held, yes - Assessee's premises was searched and certain documents were seized which showed undisclosed income of assessee - Assessing Officer having found that assessee had not maintained proper books of account and that accounts were complex in nature, issued notice under section 142(2A) and proposed to get accounts of assessee audited under said section - He, thereafter, issued notice under section 158BC - Assessee contended that assessment proceedings had commenced from date of issuing notice under section 158BC, and as such no proceedings could be said to be pending prior to issuance of said notice and, therefore, notice under section 142(2A), could not have been issued by concerned authority inasmuch as same was premature - Whether assessment proceedings were in nature of suo motu proceedings and were commenced by department by initiating search and seizure proceedings - Held, yes - Whether, therefore, it could not be said that no proceedings were pending on date of passing of order under section 142(2A), and as such there was no illegality in notice issued under section 142(2A) - Held, yes FACTS The assessee's premises was searched on 16-1-2001 and certain documents were recovered and seized which showed the undisclosed income of the assessee. The Assessing Officer found that the assessee had not maintained proper books of account and also that the accounts were complex in nature. He, therefore, proposed to get the accounts of the assessee audited under section 142(2A), and passed order under section 142(2A), on 30-1-2003. Subsequently, on 31-1-2003, he issued to the assessee notices under section 158BC for submission of true and correct return of his total income. On writ petition, the assessee contended that the assessment proceedings had commenced from the date of issuing notice under section 158BC, on 31-1-2003 and, therefore, the…

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