CBDT's Investigation Manual + Two Imp High Court Verdicts On S. 271(1)(c) And 158BD

CBDT’s Digital Evidence Investigation Manual

The CBDT has issued a comprehensive document called the “Digital Evidence Investigation Manual”. The Manual points out that the days of manual books of account and other documents are getting extinct and that most books of account and documents are maintained on digital media devices. Any worthwhile investigation of such books and documents requires proper handling and thorough analysis to ensure its integrity and evidentiary value. The Manual provides insight into the
legal framework for acquiring digital evidence, a step-by-step procedure as to how such devices should be approached, how relevant data be identified and how clones have to be prepared and utilized for the purposes of investigative analysis.
The Manual will prove to be of immense utility to all tax officials and professionals battling the menace of unaccounted money in the economy.

CIT vs. Rucha Engineers Pvt. Ltd (Bombay High Court)

S. 271(1)(c): Before proceeding to the Explanation below s. 271 and putting the responsibility on the assessee, it is necessary for the AO to first demonstrate that the assessee's explanation or conduct is not reasonable on human probabilities, or that it was in the nature of violating settled legal positions. If the explanation is not fanciful, baseless or unacceptable, penalty cannot be levied
A legal contention raised bonafide by the assessee claiming the amounts to be capital receipt, only because the same was not accepted, by itself cannot be said to be act of fraud or gross or wilful negligence. Merely because the claim was rejected, the same cannot be branded as concealment. Before proceeding to the explanation […]

CIT vs. V. D. Muralidharan (Madras High Court)

S. 158BD: Issue of notice u/s 158BD to the non-searched party has to be within the within the two years period given to the AO for completion of block assessment u/s 158BE(1)

The AO passed an order u/s 158BC in the case of Sree Gokulam Chits and Finance Company Limited. After the expiry of two years, he initiated proceedings u/s 158BD against the assessee. The Tribunal struck down the s. 158BD proceedings as being barred by limitation. Before the High Court the department claimed that as there […]