K.P. MOHAMMED SALIM versus COMMISSIONER OF INCOME-TAX, COCHIN

Citation: [2008] 6 S.C.R. 949 · Decided: 24-04-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

.,. 
.J 
[2008] 6 S.C.R. 949 
K.P. MOHAMMED SALIM 
V. 
COMMISSIONER OF INCOME-TAX, COCHIN 
(Civil Appeal Nos.2946-2956 of 2008) 
APRIL 24, 2008 
[S.B. SINHA AND LOKESHWAR SINGH. PANTA, JJ.] 
Income Tax Act, 1961 - s.127 - Power under - Held: 
Can be exercised in respect of block assessment. 
Interpretation of Statutes - Purposive construction '."'" 
Taxing statute - Held: To be construed in such manner so as 
to make it workable. 
A search was conducted by the officers of the Income 
Tax Department in the residence as also in the business 
premises of the assessee, his sons and other associates, 
consequent whereupon, it was proposed to transfer the 
cases pertaining to the assessee to the Income Tax (Inv.) 
Circle, Calicut to facilitate effective and coordinate 
investigation. An order was passed to that effect by the 
Chief Commissioner of Income Tax, Bangalore under 
s.127(2) of the Income Tax Act. A notice was issued by the 
Assessing Officer under s.158BC of the Act to file a return 
setting forth the total income including the undisclosed 
income for the block period. 
. The assessee filed writ petition before High Court 
which was dismissed. Thereafter the return was filed. The 
assessment order was passed determining the purported 
undisclosed income of the assessee. The said order of 
the Assessing Officer, Calicut was challenged on the 
ground that he had no jurisdiction to make the block 
assessment as the authority remained with the Assessing 
Officer originally having the jurisdiction over the 
assessee. The High Court held that the provisions of s.127 
949 
A 
B 
c 
D 
E. 
F 
G 
H 
950 
SUPREME COURT REPORTS 
[2008] 6 S.C.R. 
~ 
A of the Act can also be resorted to for a block assessment. 
In appeal to this Court, assessee contended that 
having regard to the definition of block assessment 
occurring in Chapter XIV-8 of the Act, s. 127 thereof ex 
B 
facie cannot have any application thereto. 
.-
Dismissing the appeal, the Court 
HELD: 1. The power under s.127 of Income Tax Act, 
1961 can be exercised in respect of a block assessment. 
[Para 12) [958-E] 
c 
2.1 In terms of Clause (a) of s.1588 of the Act, a block 
period, not only includes ten years of assessment but also 
that portion of the assessment year in which assessment 
was to take place as on the date of the search. An order of 
D transfer is passed for the purpose of assessment of 
income. It serves a larger purpose. Such an order has to 
" 
be passed in public interest. Only because in s.127 the 
words "any case" has been mentioned, the same would 
not mean that an order of transfer cannot be passed in 
E respect of cases involving more than one assessment 
year. [Paras 6, 9) [953-D; 954-A; 955-F, G] 
2.2 It would not be correct to contend that only 
because explanation appended to s.127 refers to the word 
'case' for the purpose of the said Section as also s.120, 
F the source of power for transfer of the case involving block 
assessment is relatable only to s.120 of the Act. It is a well-
settled principle of interpretation of statute that a provision 
must be construed in such a manner so as to make it 
workable. The word 'any' must be read in the context of 
G the statute and for the said purpose, it may in a situation 
of this nature, means all. The principles of purposive 
construction for the said purpose may be resorted to. 
Thus, in the context of a statute, the word 'any' may be 
... 
read as all in the context of the Income Tax Act for which 
H the power of transfer has been conferred upon the 
K.P. MOHAMMED SALIM v. COMMISSIONER OF 
951 
INCOME-TAX, COCHIN 
authorities specified under s.127. [Paras 9, 11] [956-A, B; 
A 
958-C, D] 
New India Insurance v. Nusli Neville Wadia (2007) 13 
S.C.R. 598 - relied on. 
'·• 
2.3. The power of transfer is in effect provides for a B 
machinery provision. It must be given its full effect. It must 
be construed in a manner so as to make it workable. Even 
s.127 of the Act is a machinery provision. It should be 
construed to effectuate a charging Section so as to allow 
the authorities concerned to do so in a manner wherefor. 
the statute was enacted. [Para 10] [956-C, D] 
c 
3. 5.127 and Chapter XIVB are supplemental to each 
other and the provisions of s.127 fill in the gap between 
the stage of ss.15880 and 158BG. The provisions of 
s.127(1) apply when the transfer is contemplated not only D 
between the officers of the subordinate rank but also 
officers either with or without concurrent juri

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