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TMI Blog2014 (7) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... otice issued u/s. 142 cannot be equated u/s. 143(2) of the Act, that provisions of section 292BB of the Act are curative in nature and are applicable from 2008 only - the AO had not complied with the mandatory provisions, as envisaged by the provisions of the Act i. e. not issuing the notice u/s. 143(2) within the stipulated time so order passed by him is quashed - the order passed by the AO was without jurisdiction - Decided in favour of Assessee. - IT (SS) A. No. 121Mum/1997 - - - Dated:- 28-5-2014 - Sh. H. L. Karwa And Rajendra,JJ. For the Appellant : Shri Vipul Joshi/Nishit Gandhi/Bhavin Shah For the Respondent : Shri Surinderjit Singh ORDER Per Rajendra, A. M. Challenging the order dt. 30. 04. 1997 of the Assessing Officer(AO), for the block period: 01. 04. 1993 to 29. 03. 1996, assessee-firm has raised following Grounds of Appeal : The block assessment order framed by the A. O. is bad, illegal and void and without jurisdiction, in as much as: (i) The order is time barred (ii) The mandatory notice u/s. 143 (2) was not issued or not issued within time (iii) The assessment is framed on wrong block period, that is, from 01. 04. 1993 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gross profit and sales tax, excise duty collected on unaccounted sale and finished goods at Depot at Nana Chowk 2, 510/- Cash sales 12, 178/- Total 26, 268/- 3. 2. It is submitted that in the facts and the circumstances of the case, and in law, otherwise also, on merits, no such addition was called for. 4. 1. The addition of ₹ 12 lakhs as assumed unaccounted cash sales of the Appellant is bad and illegal. 4. 2. Without prejudice to the above, it is submitted that in the facts and circumstances of the case, and in law: (i)The computation of the addition is arbitrary, excessive and not in accordance with the law; (ii)It amounts to double addition; and (iii) In any case, only net profit could be added. 5. The Appellant craves leave to add, alter, delete or modify all or any of the above grounds at the time of hearing. 2. Survey/Search and Seizure action u/s. 133A/132 of the Act was initiated at the business/residential premises of the firm and its partner on 29. 03. 1996. Cash and items of Jewellery were seized from the residences of the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 143(2) by the AO. We have gone through the notice issued by the AO u/s. 142. In our opinion notices issued u/s. 142 and 143(2) of the Act operate in different fields and they have been incorporated in the Act for specific purposes-they are not substitute for the other. 4. 1. Now we would like to analyse the legal position with regard to the issue/non issue of notice as per the provisions of section 143(2)of the Act. We find that in the matter of Virendra Dev Dixit (331ITR483) Hon ble Allahabad High Court had framed following questions of law: (i)Whether on the facts and in the circumstances of the case, the decision of the learned Tribunal is not erroneous in holding that the application of the provisions of section 143(2) would not be applicable to the block assessment procedure and the matter would necessarily travel back to the file of the Assessing Officer for the purpose of curing the defect of non-service of notice under section 143(2) whereas the assessment deserves to be quashed ? (ii)Whether such restoration is valid in terms of section 292B of the Act which cures only the defect or omission in the notice issued or purported to have been issued which in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tel Blue Moon [2010] 321 ITR 362. Referring to the judgments of the Smt. Bandana Gogoi, (289 ITR 28), Pawan Gupta(318ITR 322) and Hotel Blue Moon(supra), Honble Court further held that the service of notice on the assessee under section 143(2) within the prescribed period of time was a pre-requisite for framing the block assessment under Chapter XIV-B of the Act, that it was mandatory, that non-issuance of notice was not a mere procedural irregularity and the same was not curable, that for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of section 158BC the provisions of section 142 and sub-sections (2) and (3) of Sec. 143 were applicable and no assessment could be made without issuing notice under section 143(2) of the Act within the time specified. In the case of Hotel Blue Moon (supra)Hon ble Apex Court had dealt the issue of notice u/s. 143 (2) of the Act during the block period assessment as under : If the Assessing Officer, for any reason, repudiates the return filed by an assessee in response to notice under section 158BC(a) of the Income-tax Act, 1961 relating to a block assessment, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions (2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression 'so far as may be apply'. In our view, where the Assessing Officer in repudiation of the return filed under section 158BC(a) proceeds to make an enquiry, he necessarily has to follow the provisions of section 142, sub-sections (2) and (3) of section 143. Therefore, the requirement of notice under section 143(2) of the Act cannot be dispensed with. When the same is issued in respect of the block return filed, the Assessing Officer must necessarily issue notice under section 143(1) of the Act within the time prescribed in the proviso to section 143(2) of the Act. Even for the purpose of Chapter XIV-B of the Act, for determination of the undisclosed income for the block assessment under the provisions of section 158BC, the provisions of section 142 and sub-sections (1) and (3) of section 143 are applicable. No assessments could be made without issuance of notice under section 143(2) of the Act . If there is violation of the mandatory pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the procedural requirement and in view of the assessee s participation in the assessment proceedings, no invalidity to the assessment order should be attached. 10. We are unable to accept the contention. We have noticed that Supreme Court in the case of Hotel Blue Moon (supra) has held that even in case of block assessment notice is mandatory and the very notice gives jurisdiction to the Assessing Officer. The time limit for issuing such notice has also been specified in view of the Assessing Officer failing to issue notice within time limit merely because the assessee participated or that the notice was issued later on would not cure the jurisdictional defect. What would be the position in view of the provisions of section 292BB of the Act is not necessary for us to opine since such provision was introduced only with effect from 1. 4. 2008, and therefore, was not in the statute book during the period under consideration. In the result, Tax Appeal is dismissed. . 4. 2. From the above decisions and discussion, it is clear that for assessing the income of the block period AO is required to issue notice u/s. 143(2) of the Act. In the case under consideration, AO has not ..... 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