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TMI Blog2012 (10) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... to deny the assessee the refund due, subsequently, due to annulment of assessment. Payment of taxes voluntarily is different from adjusting the refund without reference to the assessee - It cannot be held that the assessee has paid taxes and accordingly, in terms of proviso to section 240 to deny refund to the assessee - Commissioner of Income Tax (Appeals) exceeded his jurisdiction to deny the refund - in favour of the assessee Jurisdiction - refund – Held that:- Jurisdiction of the Appellate Authorities to adjudicate the issue of refund in the Appellate proceedings is consequential upon the validity of the assessment proceedings. Having recorded a finding by holding that the entire assessment proceedings are invalid, the question of the jurisdiction of the appellate authorities therefore would not arise for determination Whether Appellate Authorities should have directed the Assessing Officer to pass a fresh order of assessment in view of holding that the notice is invalid - revenue contended that if the notice was held to be invalid, the Assessing Officer should have been directed to pass a fresh order of assessment by complying with the limitation in terms of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the intent and purpose of the Act as contemplated under section 292B of the Act? (iii) It is submitted alternatively without conceding whether the Tribunal after treating the notice as invalid, should have directed the Assessing Officer to pass fresh order of assessment in accordance with the law by giving such time for the purpose of compliance? 5. By a common order dated 22.03.2006, ITA Nos. 2784/2005, 3060/2005 and 3148/2005 were admitted to consider the following five substantial questions of law: (i) Whether the Appellate Authorities were correct in holding that the notice issued under section 158BC of the Income-tax Act on 15.12.1997 giving the assessee 15 days time to file the return of income is invalid and consequently the assessment stand annulled despite the Assessing Officer granting further time of seven months by issuing fresh notices and thereafter the assessee filed the return on 29.6.1999? (ii) Whether the notice issued under section 158BC(a)(i) of the Act cannot be treated as invalid since further time of seven months has been granted to the assessee to file the return of income and the same stood confirmed in accordance with the intent and purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial and the return of income filed and arrived at a net undisclosed income for the block period at Rs. 200 lakhs. 7. The assessee being aggrieved by this order preferred an appeal to the Commissioner of Income-tax (Appeals). The Appellate Commissioner held that the notice issued under section 158BC was invalid and, consequently, he annulled the assessment. It was further held that since the amount of tax computed by the Assessing Officer was the exact amount, on which the assessment order came to be passed, there was no question of making any refund. Consequently, the appeal was allowed in part. Aggrieved by the same, the revenue preferred an appeal to the Tribunal. The assessee filed cross-objection contending that the provision of section 240(b) was not applicable to the block assessment proceedings. That the taxes had not been paid voluntarily and the same had been adjusted pursuant to the VDIS return filed pursuant to the consequence of the court order. The Tribunal rejected the appeal of the revenue and allowed the cross-objection filed by the assessee. Aggrieved by the same, the revenue is in appeal. 8. The learned Counsel appearing for the appellant-revenue contends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under Chapter XIV B of the Act and consequently the tax paid is liable to be refunded. 12. He placed reliance on the judgment of the Gujarat High Court in the case of P.V. Doshi v. CIT [1978] 113 ITR 22 to contend that no jurisdiction can be vested with the authority on the ground of waiver nor on consent. Therefore, only because time was sought to submit the return, would not grant any jurisdiction to the authority. 13. Reliance was also placed by the assessee on the judgment in the case of Asstt. CIT v. Hotel Blue Moon [2010] 321 ITR 362 to contend that the notice under section 158BC dealing with the block assessment makes such a notice the very foundation for jurisdiction. That such a notice is required to be served on the person who is found to have undisclosed income. Reliance was also placed on the unreported judgment of this Court in ITA No. 21/2003 c/w ITA No. 22/2003 disposed of on 03.04.2008, wherein it was held that when once the notice is held to be invalid, the entire proceedings would become void for want of jurisdiction. Further reliance was also placed on the unreported judgment of this Court in the case of Winter Care (P.) Ltd., v. Dy. CIT 15.02.19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the said letter, there is no mention whatsoever questioning the validity or otherwise of the notice under section 158BC. It is therefore contended that in the said reply dated 02.01.1998 the validity of the notice has not been questioned. Moreover the said letter has to be read as accepting the notice dated 15.12.1997 as a valid notice. 16. Consent or waiver does not confer jurisdiction. Jurisdiction is conferred by statute. An authority cannot assume jurisdiction only because the same has been consented to or the lack of jurisdiction has been waived by the assessee. Therefore notwithstanding the letter dated 02.01.1998, the proceedings are wholly without jurisdiction and lack of authority. When the initiation of the proceedings in terms of the notice does not conform with the provisions of law, the authority cannot assume jurisdiction. The revenue is granted authority by statute. The waiver or the consent cannot override the provisions of statue. What is mandated cannot be diluted. An inherent lack of jurisdiction as a result of an invalid notice cannot transcribe into a jurisdiction, which is sought to be validated on the grounds of waiver or consent. Hence, question No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of the Act, section 292 B has no application. Hence, question No. 2 is answered in favour of the assessee and against the revenue. 20. Question No. 3 is as to whether the Tribunal was justified in holding that section 240 of the Act is not applicable to Chapter XIV-B of the Act and therefore, the taxes paid pursuant to the return filed in the block assessment is liable to be refunded since the judgment of the Apex Court reported in 261 ITR 367 is not applicable to the block assessment proceedings especially in view of the Section 158BH of the Act. 21. The revenue contends that in terms of the provisions of section 240 when an assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee. In the assessment order for the block period, the income has been computed by the Assessing Officer exactly on the same amount as declared by the appellant in the return filed for the block period and no additions have been made. Pursuant to the decision of the Karnataka High Court in Writ Appeal Nos.6502 to 6506 of 1997, the amount paid by the appellant pursuant to VDIS has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of holding that the notice is invalid. 25. It was further contended by the revenue that if the notice was held to be invalid, the Assessing Officer should have been directed to pass a fresh order of assessment by complying with the limitation in terms of section 158BC. 26. The contention is unacceptable. The time to be granted in terms of section 158BC is mandatory. Having failed to comply with the same, granting another opportunity to the revenue is highly improper. If that were to be so, then each and every violation of law by the revenue would stand rectified by orders of remand. That is not the intent and purport of the Act. The period as specified in the Act requires to be strictly complied with. Therefore, the plea of the revenue for a direction to pass fresh orders of assessment after complying with the provisions of section 158BC requires to be rejected. Consequently, question No. 5 is answered in favour of the assessee and against the revenue. 27. The facts in all these appeals are identical wherein common questions of law have arisen. Since, the questions of law having been answered in the case of The CIT v. Micro Labs Ltd. [IT Appeal no. 2784 of 2005 the question o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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