2015 (8) TMI 209 - AT - Income Tax

Validity of block assessment order - CIT (A) held it as void ab initio - Held that - In the case of the assessee, it is observed that notice under section 158BD was served beyond the time limit specified under section 158BE of the Act. Therefore, the assessment is void ab initio - Decided in favour of assessee.

Summary

Issues:
1. Appeal filed by Revenue against the order of the Commissioner of Income Tax (Appeals) for block period 1991-92 to 2000-01 and 2001-02(part).
2. Grievance regarding the block assessment order being void ab initio.
3. Issue of notice under section 158BD being barred by limitation.
4. Decision based on the interpretation of time limits under section 158BE and notice under section 158BD.
5. Upholding the order of the Commissioner of Income Tax (Appeals) based on the decision of the co-ordinate Bench of the Tribunal.
6. Dismissal of Revenue's appeal and assessee's appeal as infructuous.

Analysis:
1. The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) for the block period 1991-92 to 2000-01 and 2001-02(part). The main grievance of the Revenue was that the Commissioner erred in holding the block assessment order as void ab initio.

2. During the hearing, the counsel for the assessee argued that the issue was similar to a previous decision by a co-ordinate Bench of the Tribunal in the case of ACIT Vs. V.P. Ullas. In that case, it was held that the notice issued under section 158BD was time-barred, rendering the assessment void ab initio.

3. The Departmental Representative supported the Assessing Officer's order, while the Tribunal considered the decision of a Special Bench and another Tribunal Bench. It was noted that the time limit under section 158BE also applied to notice under section 158BD, as established in previous cases.

4. The Tribunal observed that the notice under section 158BD in the present case was served beyond the time limit specified under section 158BE. Therefore, the assessment was deemed void ab initio, in line with the decision of the co-ordinate Bench in the case of Shri V.P. Ullas.

5. Consequently, the Tribunal upheld the order of the Commissioner of Income Tax (Appeals) based on the precedent set by the co-ordinate Bench. The grounds raised by the Revenue were rejected, leading to the dismissal of the Revenue's appeal.

6. In another appeal filed by the assessee against an order passed under section 263 of the Act, the Tribunal dismissed the appeal as infructuous since the order of the Commissioner of Income Tax (Appeals) had already been confirmed. As a result, both the Revenue's appeal and the assessee's appeal were dismissed as infructuous.