9911796707
|
Home
Issues Involved:
1. Validity of notice under section 158BC. 2. Validity of assessment under section 158BC without notice under section 143(2). 3. Legality of search. 4. Addition of undisclosed income for the block period. Detailed Analysis: 1. Validity of notice under section 158BC: The assessee challenged the validity of the notice under section 158BC on two grounds: the status of the assessee was not specified, and the block period was incorrectly mentioned. The tribunal referred to section 292B, which states that minor mistakes in notices do not invalidate them if they conform to the intent and purpose of the Act. The tribunal cited various judgments, including *Mulchand Rampuria v. ITO* and *Chooharmal Wadhuram v. CIT*, to support the view that misdescription or minor errors do not render a notice void. The tribunal concluded that the notice under section 158BC was not invalid due to these errors and rejected the assessee's grounds of appeal Nos. 2 and 3. 2. Validity of assessment under section 158BC without notice under section 143(2): The assessee argued that the assessment under section 158BC was invalid as no notice under section 143(2) was issued. The tribunal noted that the assessment order was captioned '158BC read with section 143(3)' and that the assessee was given full opportunity to present evidence and substantiate claims. The tribunal held that the absence of a notice under section 143(2) was a procedural error cured by section 292B, which validates proceedings with minor defects if they conform to the Act's intent. The tribunal rejected the assessee's ground of appeal No. 4. 3. Legality of search: The assessee initially disputed the legality of the search but withdrew this ground during the hearing, referencing the ITAT Special Bench decision in 95 TTJ (Delhi) 25. Consequently, the tribunal rejected the assessee's ground of appeal No. 6 as withdrawn. 4. Addition of undisclosed income for the block period: The assessee disputed the addition of Rs. 2,82,781 as undisclosed income for the block period. The tribunal noted that only income detected during the search or as a result of the search could be assessed as undisclosed income under section 158BC. The tribunal cited several judgments, including *CIT v. Smt. Usha Tripathi* and *CIT v. Shambhulal C. Bachkaniwala*, to support this view. The tribunal found that the income in question was not detected during the search but was disclosed in returns filed after the search. Therefore, it should be assessed through regular assessment under section 143(3) and not included in the block assessment. The tribunal directed the deletion of the assessment of undisclosed amounts mentioned in ground No. 5 from the block assessment proceedings. Conclusion: The appeal was partly allowed. The tribunal upheld the validity of the notice under section 158BC and the assessment despite procedural errors, citing section 292B. However, it directed the deletion of the addition of undisclosed income for the block period, as it was not detected during the search.
|
