INCOME TAX
INSTRUCTION NO. 1927/1995
Dated: July 21, 1995
Section(s) Referred: 158B ,158BA ,158BB ,158BC ,158BD ,158BE ,158BF ,158BG ,158BH
Statute: Income - Tax Act, 1961
A special procedure for assessment of search cases has been provided in Chapter XIVB of the Income-tax Act, 1961. A concept of 'block period' assessment has been introduced which is applicable for searches initiated/requisitions issued on or after 1st July, 1995. For effective implementation of the block assessment scheme, it has been decided that the following procedure shall be followed:
(i) where the jurisdiction over an assessee is with an Assistant Commissioner or Deputy Commissioner (Special Range), the block assessment shall be completed by him.
(ii) where the jurisdiction over the assessee is with an ITO, the CIT shall transfer the case to an Assistant Commissioner or Deputy Commissioner (Special Range)u/s 127 of the I.T.Act.
(iii) In the cities of Delhi, Bombay, Calcutta, Madras, Ahmedabad and Bangalore - the Jurisdiction over the block assessment shall be conferred, as far as possible, on a DC(Special Range) working under the respective Commissioner.
(iv) The ADIT concerned shall, within one week of the commencement of the Search, intimate the CCIT and CIT having territorial jurisdiction over the assessee and the DGIT/DIT shall, where necessary, also send suggestions for conferring jurisdiction over the block assessments to an Assistant Commissioner or Deputy Commissioner (Special Range).
(v) The ADIT concerned shall prepare and forward the appraisal report positively within 60 days of the commencement of the search. If this period is to be exceeded, written permission of the DG shall be obtained.
(vi) The seized material shall be handed over to the Assessing Officer at the earliest.
(vii) The appraisal report shall contain information/analysis on the following points:-
(a) Date of commencement and conclusion of the search and date of limitation for completing the assessment for block period.
(b) Identification of all assessees ward/circle wise in whose cases block assessments have to be made.
(c) Gist of information leading to search.
(d) Reasons, break up and analysis of tax evaded income admitted during and/or after the search.
(e) Identification of the incriminating entries in books of account and documents alongwith analysis thereof.
(f) Board but reasonable estimate of the undisclosed income and its correlation with the assets, investments and consumption expenditure.
(g) Specific suggestions regarding follow up of the investigations.
(h) Comments and observations of DD/DIT especially in regard to (f) and (g) above.
(viii) Cases where the D.G. is of the view that immediate centralisation would be in the interest of proper investigation, shall be centralised and the assessments got completed in Central Circles.
2. The above procedure shall operate with immediate effect and shall apply to all searches initiated on or after July 1, 1995. Old cases would continue to be governed by earlier instructions on the subject.
3. A separate register shall be maintained by the assessing officer handling block assessment regarding pendency and disposal of block assessments as also the tax demands raised and collected in respect thereof. A quarterly statement shall be obtained by the CIT from the respective Assessing Officers, consolidated and sent to CCs. In turn CCs would send such information to the Board.
4. These instructions may be brought to the notice of all the officers working in your region.