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TMI Blog2014 (9) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... that in a notice issued u/s 158BC, the period of block period is to be specifically mentioned by the authorities - If it is not mentioned, it would not invalidate the notice - Section 292B to be attracted, the condition precedent is, there should be a defect in the notice - If the notice is not defective at all, the question of validating the said mistake by recourse to Section 292B would not arise – Decided against assessee. - ITA No.942 of 2007, ITA No. 956 of 2007 - - - Dated:- 2-6-2014 - N Kumar And B Manohar , JJ. For the Appellant : Sri K V Aravind, Adv. For the Respondent : Sri Ashok Kulkarni for M/s K R Prasad, Adv. ORDER Per: N Kumar: ITA 942/07 is an appeal by the assessee, whereas ITA 956/07 is an appeal by the Revenue, challenging the very same order passed by the Income Tax Appellate Tribunal. Brief facts of the case: 2. The assessee s office and residential premises were searched under Section 132 of the Income Tax Act, 1961, hereinafter for short, referred to as the Act . During August - October 1997, certain documents relating to financial transactions with the Kannada film producers were seized. The assessee is the proprietor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal to the Tribunal. The Tribunal was also of the view that the Assessing Officer has to mention the block period in the notice as per requirement of Section 158BC(a). As it is not mentioned, it is defective but that will not invalidate the assessment. The Tribunal set aside the assessment made by the Assessing Officer and directed assessment after issue of a valid notice under Section 158BC. The appeal was allowed for statistical purpose. 6. Aggrieved by the said order, both the assessee as well as the Revenue are in appeal. 7. ITA 956/07 was admitted on 11.06.2010 to consider the following substantial question of law: Whether the Tribunal was correct in holding that the Assessing Officer had issued a defective notice under Section 158BC of the Act and therefore the assessment was invalid as the provisions of Section 292B of the Act did not cure the said defect? 8. In ITA 942/07 no substantial question of law was framed at the time of admission. However, the substantial question of law which is urged in this appeal is: Whether, in view of prescription of limitation under Section 158BC of the Act, the Tribunal was justified in directin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER Vs. MICRO LABS LTD., reported in (2012) 348 ITR 75 (Karn), wherein Section 292B of the Act came up for consideration in the context of a invalid notice issued under Section 158BC. It is held as under: The purport of Section 292B is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. The notice should be in conformity with and in accordance with the intent and purpose of the Act. The intent and purport as provided under section 158BC is to serve a notice on the assessee by providing a time of not less than 15 days and not more than 45 days. This is the purport and intent of the section. No extra time can be granted subsequently. Time to be granted is a minimum of 15 and maximum of 45 days. The same has to be specified in the notice. Hence, grant of extra time is without authority of law. It cannot validate an invalid notice. Moreover, it is relevant to note that the notice issued is on a printed form wherein the details are required to be filled up. At the bottom of the notice, is a printed matter, which rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is given. In fact, the assessee is called upon to file his return in the prescribed form within 15 days. So the requirement of minimum 15 days and maximum 45 days, both are complied with. 15. Reliance is also placed on the unreported judgment of this Court in the case of THE COMMISSIONER OF INCOME TAX Vs. B.N. KESHAVA, decided on 3rd April, 2008 in ITA No.21/03 C/w ITA 22/03, wherein, dealing with notice under Section 148 of the Act, which was full of blanks, it was held that the material facts which were required to be mentioned in the notice issued to the assessee under Section 148 of the Act, were altogether missing. Obviously, the assessee was required to imagine everything to himself to have acted pursuant to the notice issued to him. In that context, it was held that the notice was invalid and illegal, all subsequent proceedings would automatically fall and no cognizance thereof can be taken. 16. Reliance was also placed on judgment of the Apex Court in the case of COMMISSIONER OF INCOME-TAX, GUJARAT Vs. KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA reported in (1971) 82 ITR 821. Dealing with Section 34 of the Old Income Tax Act, 1922, the Apex Court held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter. No proceeding under section 158BC had been initiated. There is, thus a patent nonapplication of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November 1995. No other information had been furnished. The provisions contained in Chapter XIV-B are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened 20. As the Assessing Officer had not recorded his satisfaction, which is mandatory, nor had he transferred the case to the Assessing Officer having jurisdiction over the matter, the impugned judgment of the High Court was set aside. 21. The learned Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e one without jurisdiction, was gone into. 23. In this background, first let us see the provisions of law to understand the requirement of law in a notice issued under Section 158BC. Section 158BC reads as under: Procedure for block assessment. 158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132, in the case of any person, then, [(a) the Assessing Officer shall (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in Chapter XIV-B, which deals with procedure for assessment of search cases. Section 158BA reads as under: Assessment of undisclosed income as a result of search 158BA. (1) Notwithstanding anything contained in any other provisions of this Act, where after the 30th day of June, 1995 a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of any person, then, the Assessing Officer shall proceed to assess the undisclosed income in accordance with the provisions of this Chapter. (2) The total undisclosed income relating to the block period shall be charged to tax, at the rate specified in section 113, as income of the block period irrespective of the previous year or years to which such income relates and irrespective of the fact whether regular assessment for any one or more of the relevant assessment years is pending or not. Explanation For the removal of doubts, it is hereby declared that- (a) the assessment made under this Chapter shall be in addition to the regular assessment in respect of each previous year included in the block period; (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession has been defined in the enactment, then it must be understood. In the sense in which it is defined when the statute prescribes as to what is a block period, the authorities under the Act have no jurisdiction or power to alter the said period. Therefore consciously the Legislature after using the word block period , which has a definite connotation and meaning in the context of the Act, did not further elaborate by saying that the notice should mention the period for which the return is to be filed. It is possible that the authorities may mention in the notice, the block period. It is only a practice, which has no statutory basis. Therefore, when the statute expressly provides what is a `Block period , the question of any doubt or confusion in the mind of the assessee would not arise. 26. In the instant notice, the words block period is mentioned. But it is left blank. When that is not the requirement of law, non-mentioning of the block period in the notice would not invalidate the notice nor would vitiate the proceedings as one without jurisdiction. When his premises is searched, he is definite about the date of search. When the notice is issued calling upon him to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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