Meaning of “Block period”

Case Name : Sanjay gupta Vs. CIT

Citation : [2014] 49 taxmann.Com 179/366 itr 18/269 ctr 339 (delhi)

Court : Delhi high court

Section : 158B to 158BG

Meaning :  A perusal of the provision of section 158b would show that, block period has been defined to mean the period comprising of previous years relevant to the six assessment years preceding the previous year in which search under section 132 is conducted or requisition under section 132a is made. It also includes a part of the previous year till the date when the search under section 132 is conducted or such requisition under section 132a is made.

It is also apparent that the income, that is received/receivable after the date of search and seizure would not be represented by the assets that are found during the search and seizure operations and certainly would not be assessable to tax as undisclosed income for that period. There is, thus, good reason for the block period to be defined as a period prior to the date of search or prior to the date when the authorized officer finds reason to believe that the assets/materials already found, represent undisclosed income. The parliament in its wisdom has, therefore, defined block period under section 158b(a), to include the period up to the date of commencement of the search under section 132 or the date on which the requisition under section 132a is made.

Given the specific purpose of explanation 2 to section 158be, one cannot accept the contention that the same must be extended to interpret the meaning of ‘block period’ as defined by clause (a) of section 158b.

The ordinary, natural meaning of the words used under section 158b(a) need not be departed from. There is, first of all, no ambiguity in the language. Secondly, the definition of the expression “block period” as understood by the plain language of section 158b(a) also conforms to the scheme of chapter xiv-b. Therefore, there is no reason to read the expression “requisition was made” do not mean the date on which the authorized officer made the requisition but to mean the date when he received the records/assets pursuant thereto.

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