2015 (12) TMI 756 - AT - Income Tax

Assessment under s. 143(3) r/w s. 158BC - non service of notice - Held that - While applying the ratio of Hon ble Apex Court in the case of Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) to the facts of case and other decisions held that all block assessment are null and void where notice u/s.143(2) of the Act was served on the assessee beyond prescribed time limit. The CIT(A) finally held that in the case of the assessee, since the notice u/s.143(2) was not served on the assessee within the period of 12 months from the end of the month in which the block-return of income was furnished, the assessment order dated 31/07/2001 was patently illegal and void ab initio. This legal and factual finding of CIT(A) is no need of any interference, same is hereby upheld by us. As a result, appeal of the Revenue is rejected. - Decided in favour of assessee.

Summary

Issues:
Appeal by Revenue challenging validity of notice u/s.143(2) and assessment order. Cross-objection by Assessee supporting CIT(A)'s decision on notice validity.

Analysis:
1. The appeal by Revenue contested the acceptance of the assessee's claim regarding the notice u/s.143(2) not being validly served, despite documentary evidence and the assessee's submissions before the AO. The CIT(A) found the notice served beyond the time limit, rendering the assessment order illegal and void ab initio, citing the Hon'ble Supreme Court's ruling in ACIT vs. Hotel Blue Moon. The ITAT upheld the CIT(A)'s decision, emphasizing the necessity of notice u/s.143(2) within the prescribed period for block assessments, leading to the rejection of the Revenue's appeal.

2. The cross-objection by the Assessee echoed the CIT(A)'s stance on the notice's validity, supported by the Hon'ble Supreme Court's ruling in Hotel Blue Moon. The ITAT deemed this issue as already addressed in the Revenue's appeal, rendering the cross-objection moot. Consequently, the cross-objection was dismissed as infructuous.

3. The ITAT consolidated the appeal and cross-objection due to the common issue of the notice u/s.143(2) validity. The legal and factual findings of the CIT(A) were upheld, emphasizing the importance of timely notice for block assessments. The judgment highlighted the binding effect of the Hon'ble Supreme Court's ruling and the necessity of following procedural requirements strictly in such cases. Ultimately, both the Revenue's appeal and the Assessee's cross-objection were dismissed, affirming the CIT(A)'s decision on the notice's validity and the consequent assessment order's nullity.