2012 (8) TMI 971 - AT - Income Tax

Summary

Issues Involved:
1. Validity of Block Assessment Notice.
2. Admissibility of Additional Grounds.
3. Jurisdiction of Assessing Officer (AO) based on Notice Validity.

Summary:

1. Validity of Block Assessment Notice:
The primary issue in both appeals was the validity of the block assessment notice issued by the AO u/s.158BC. The notice required the assessee to file the return within 15 days, contrary to the statutory requirement of "not less than 15 days but not more than 45 days." The Tribunal held that the notice was invalid as it did not comply with the mandatory time period stipulated u/s.158BC. Citing the Hon'ble Supreme Court's decision in ACIT vs. Hotel Blue Moon and the Karnataka High Court's decision in CIT vs. Micro Labs Ltd., the Tribunal concluded that an invalid notice renders the entire assessment void ab initio.

2. Admissibility of Additional Grounds:
In ITSS 196 of 2005, the assessee raised an additional ground challenging the validity of the notice u/s.158BC. The Tribunal admitted this additional ground for adjudication, referencing the Hon'ble Supreme Court's decision in National Thermal Power Co. Ltd. vs. CIT, which allows raising purely legal grounds without requiring new facts to be examined.

3. Jurisdiction of Assessing Officer (AO) based on Notice Validity:
The Tribunal emphasized that the notice u/s.158BC is the foundation for jurisdiction. Since the notice in question did not comply with the statutory requirement of providing "not less than 15 days," it was deemed invalid. Consequently, the AO had no jurisdiction to proceed with the assessment proceedings, rendering the entire assessment process void. The Tribunal rejected the argument that the defect was curable under sec.292B, as the invalid notice caused a jurisdictional defect.

Conclusion:
The Tribunal set aside the assessments in both cases, declaring them void due to the invalid notice issued u/s.158BC. As a result, the appeals of the assessees were allowed, and the Tribunal did not address the merits of the cases.

Order Pronounced:
The order was pronounced in the open court on 29th August, 2012.