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TMI Blog2010 (1) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld CIT(A). In the Cross Objection, the assessee has challenged the legality and validity of the assessment framed by the A.O. u/s. 158 BD of the Act vide order dt. 31.1.2000. So far as the Cross Objection is concerned, the issues arising from the same go to the roots of the matter as the assessee has raised issue on jurisdiction of the A.O. to make present assessment on the reason that the A.O. failed to issue the notice u/s. 143(2) for selecting the assessee's return for scrutiny. We, therefore, consider fit to decide the Cross Objection first as the basic legal issues are arising. 2. In the Cross Objection, the assessee has taken the following effective Grounds:- 1. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the proceedings u/s. 158BD of the Act are invalid and void ab initio. 2. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the notices issued by the Assessing Officer during the proceedings are invalid and illegal. 3. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that no surcharge can be le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Period filed by the assessee in response of the notice issued to him. The Ld Counsel for the assessee submitted that the issue in respect of fate of the assessment proceedings were the assessee filed the return of income for the block period and the A.O. decides to verify the correctness of the said return but did not issue the notice u/s. 143(2) of the Act, now stands covered in favour of the assessee by the decision of Hon'ble Jurisdictional High Court in the case of CIT v/s. Mrs. Mudra G. Nanavati, 227 CTR 387 (Bom). The Ld Counsel also filed the copy of the judgment which is placed on record. It is also argued that the consistent view has been taken by the different co-ordinate benches including the decision of ITAT in the case of Zeus Air Services Pvt. Ltd., v/s. ACIT - ITA No. 660 and 753/Mum/2003 dt. 13.10.2008 (to which one of us i.e. Judicial Member, is a party). In a detailed decision rendered by the Tribunal, it has been held that non-issue of the notice u/s. 143(2) will vitiate the assessment proceedings. It is also argued in that case that the Tribunal has followed the decision of the another Co-ordinate Bench in the case of Mrs. Mudra G. Nanavati v/s. DCIT, (ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted by Mr. Sathe. Thus, notice u/s. 158BC (a) cannot be equated with that of notice u/s. 148. That notice u/s. 158BC(a) only provides for procedure to be adopted for block assessment. It does not confer jurisdiction to assessee in favour of the Assessing Officer. In these circumstances, submission made by Mr. Sathe is devoid of any substance." 5.4 Moreover, the technicality of the procedures as illustrated by the appellant i.e. issue of notice u/s. 143(2) within a period of one year is a part and parcel of the proviso to section 143(2). It is a settled principle of statutory interpretation that proviso is added to an enactment to qualify or create an exception to what is in the enactment and ordinarily a proviso is not interpreted as stating a general rule (Shah Bhojraj Kuvarjii Oil Mills and Ginning Factory vs. Subhash Chandra Yogiraj AIR 1961 SC 596 Pg. 1690). It is also an equally settled proposition of law that the proper functioning of proviso is that it qualifies the generality of an enactment by providing an exception and picking out as it were, from the main enactment, a portion which what for the proviso would fall within the main enactment. This proviso does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment revealed that the case of Bandana Gogoi relates to block assessment, while the case of M. Chellappan relates to reassesment proceedings u/s. 147. 5.7 The law laid down by the Hon'ble HC of Gauhati is per incuriam as it fails to discuss the important decisions of the Supreme Court which goes to the very root of the interpretation of the provisions of section 158BC. (i) The decision of Hon'ble SC in the case of Dr. Pratap Singh reported in 155 ITR 166 SC was not considered by the Hon'ble HC of Guwhati which clearly define and interpret the meaning of the word 'so far as may be' to construe it to mean 'to the extent possible'. It is because of this the Hon'ble Gauhati HC construe that the issue in notice u/s. 143(2) is mandatory and not directory. The Special Bench of ITAT at Lucknow had the occasion of discussing the law laid down by the SC in this regard and after fully appreciating the facts, they came to a right conclusion. The decision of the Hon'ble Guwhati HC has rendered itself as per incurrium as it has not followed the law laid down by the Hon'ble Supreme Court .The Hon'ble Supreme Court in the case of S. Shanmugavil Nadar(supra) has observed that article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's order in the above mentioned case, it is seen that the Hon'ble Court has mainly relied on the following High Court decisions:- 1. C.I.T. vs. M. Chellappan and Another - 281 ITR 444 (Mad) 2. Vipan Khanna vs. C.I.T. and Others - 255 ITR 220 (P and H) 5.9 The Hon'ble Supreme Court in the case of A.C.I.T. vs. Rajesh Jhaveri Stock Brokers P. Ltd. reported in 291 ITR 500 (SC) held that:- "Taxing income escaping assessment in the case of an intimation u/s. 143(1)(a) is covered by the main provision of section 147 as substituted w.e.f. April 1, 1989, and initiating reassessment proceedings in the case of intimation would be covered by the main provision of section 147 and not the proviso thereto. Only one condition has to be satisfied. Failure to take steps u/s. 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings when intimation u/s. 143(1) has been issued." 0.9 Thus, it may be seen that the decision of Madras High Court and Punjab and Haryana High Court in the cases of C.I.T. vs. M. Chellappan 281 ITR 444 and Vipan Khanna vs. C.I.T. 255 ITR 220 followed by the Hon'ble Gauhati High Court in the case of Bandana Gogoi vs. C.I.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods vs. State of Rajasthan and Others and also of the case law of Sambhaji and Ors vs. Gangabai and Ors wherein the Hon'ble apex court has held as under:- "The procedure law so dominate in certain system as to overpower substantive rights and substantial justice. The humanist rule that procedure should be handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power in judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable. Justice is the goal of jurisprudence, procedural, as much as substantive. No person has vested right in any course of procedure. He has only the right to prosecution or defense in the manner for the time being by or for the court in which the case is pending, and if, by an act of Parliament the mode of procedure is altered, he has no the right than to proceed accordingly to the altered mode. It procedure law should not ordinarily be construed as mandatory, the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. The procedural or is not to be a tyrant but a servant, not an ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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