O.P. Yadav v. DCIT [ITA No. 5523/Del/2018, dt.
10-9-2020] : 2020 TaxPub(DT) 3623 (Del-Trib)
Reassessment under section 147 post block assessment under
section 158BC
Facts:
Assessee was a sole proprietor concern. Consequential to a
search and seizure operations in the premises of the assessee certain
incriminating evidences were unearthed whereby bogus/accommodation entries were
added in the block period of the assessee but not in this sole-proprietorship
concern for the assessment years 1-4-1995 to 7-3-2000 the order of which was
passed on 25-3-2004. Subsequent to this based on the investigation wing it was
also found out that the assessee proprietorship concern was also in receipt of
bogus/accommodation entries and thus the scrutiny assessment case of assessee
was reopened under section 147 and additions sustained. This
reopening/additions were sustained by lower authorities. Aggrieved assessee
went in higher appeal to ITAT claiming that the reopening/reassessment post a
block assessment was incorrect and deserved to be quashed -
Held against the assessee that the reopening/reassessment
was correct and the additions were sustained.
The ITAT did take cognizance of the fact that post a block
assessment, no reassessment/reopening is possible as the block assessment
provisions do exclude section 147/148 once they are invoked. Also because of
the fact the concept of block assessment is a clubbed assessment thus outside
reopening/reassessment provisions. Besides this principle; reopening in a block
case would mean that the additions arising out of the search if
reassessed/reopened itself would be read as usurping the powers of the search
and its provisions thus it would be incorrect to reopen/reassess a block
assessment case under section 147/148. The CBDT circular was also aligned on
this.
But in this case what was reopened was the normal
assessment and not the block assessment due to which the reassessment
proceedings were held to be valid thus sustaining the additions.
Editorial Note: The
above principles would hold water even in the new search and seizure block
assessment cases.