The main legal point established is that the definition of 'block period' under section 158B(a) is exhaustive and includes the period up to the date of the commencement of the search, influencing the applicability of provisions under section 158BC and 158BD.

Radhakrishnan, J.

Income-tax Appellate Tribunal, Cochin Bench in compliance with the direction of this court in OP.No.18508 of 1999 has referred the following question of law for opinion this court under section 256(2) of the Income-tax Act, 1961.

“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that section 158BC read with section 158BD of the Income-tax Act, 1961 had no application to the facts of the case?

2. Assessee is a partnership firm doing business in purchase and sale of greeting cards and other stationery items under the name and style of Don Bosco Card Centre”. The firm is a sister concern of Don Bosco Industries, whose premises were searched under section 132 of the Income-tax Act, 1961 on 4-1-1996. Business premises of the assessee was also surveyed under section 133A of the Act along with the search in the business premises of Don Bosco Industries. During the course of the survey, the value of closing stock available with the assessee was quantified at Rs.87,203/-. Later the assessing officer issued a notice under section 158BC read with section 158BD calling upon the assessee to furnish a return of income for the block period 1-4-1985 to 4-1-1996 as the bocks of account of the assessee for the assessment years 1984-85 to 1995-96 had been seized from the premises of M/s. Don Bosco Industries during the course of search and seisure proceedings. Assessee in response to the above notice filed a return of income for the block period declaring nil undisclosed income. Assessing officer accepted the contention of the assessee regarding valuation of closing stock at cost price and revalued the value of closing stock at Rs.68,040/-. Value of closing stock as per books of account was Rs.40,881/-. Assessing officer therefore made an addition of Rs.27,160/- being the value of unaccounted stock for the block period 1-4-1985 to 4-1-1996. Aggrieved by the order of the assessing officer assessee took up he matter in appeal before the Tribunal took the view that provisions of section 158BC read with section 158BD are not applicable to the facts of the case as the assessee was yet to file the return of income within the prescribed time limit under the provisions of the Act since that was the current year of the assessee and the accounts were not closed. Tribunal therefore expressed the view that the provisions of section 158BC read with section 158BD are not applicable to the facts of this case. It was further ordered that the search and seizure operation conducted by the department arte not proper and legal. Consequently, Tribunal cancelled the assessment made by the assessing officer for the block period from 1-4-1985 to 4-1-1996.

3. Matter is placed before us for opinion on a reference made by the Tribunal. Counsel appearing for the revenue Sri. George K. George submitted that the Tribunal has committed a grave error in not properly appreciating the provisions of section 158BC and 158BD if the Income-tax Act, 1961. Counsel made specific reference to the definition of block period which appears in Section 158B(a) of Act and that definition would take in the period up to the date of commencement of search. Counsel appearing for the assessee supported the findings of the Tribunal that the provisions of section 158BC read with section 158BD would not apple to the facts of this case since the accounts of the assessee were not closed during the current year and that the assessee was yet to file the return of income within the prescribed time limit under the provisions of the Act. This court pertaining to the very same search conducted on 1-4-1996 in the premises of Don Bosco Industries in Commissioner of Income-tax v. Deep Arts, (2005) 274 ITR 571 held that even if no search is conducted at the premises of the assessee the assessing officer has jurisdiction to make assessment under section 158BC read with section 158BD on the basis of materials unearthed in a search conducted