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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 ..... e South Taluk have fetched him huge income. The seized material throws light on his attempts to extend his business acumen and skill to cover hotels and resorts also. He was also an Actor in Kannada Film Industry prior to block period. 3. In compliance with Section 158BC notice was issued on 20.01.1998 calling upon the assessee to prepare a true and correct return of his total income including the undisclosed income for the block period mentioned in Section 158BA of the Act. On receipt of the said notice the assessee and his authorized representative Sri. V. Srinivasan, Chartered Accountant, appeared and furnished NIL return. The Assessing Authority after considering the seized materials, return filed by the assessee and also the books made available by the assessee about his various business, proceeded to pass order computing the total undisclosed income as Rs. 54,20,820-00 and levied tax at 60% there on in an amount of Rs. 32,52,490-00 and also levied interest under Section 158FA(1) at 2%. In all a sum of Rs. 33,82,590-00. He directed issue of demand notice. He also ordered that penalty proceedings under Section 158BFA(2) are initiated separately. The said order was passed after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the parties at length in respect of rival contentions, we were of the opinion that the following substantial question of law, which is not urged by both the parties and which is not formulated, do arise for our consideration in this appeal. Accordingly, we have framed the following substantial question of law: "Whether the notice issued under Section 158BC is invalid for non-mentioning of the block period in respect of which the said notice is issued?" 10. The learned Counsel for the assessee assailing the impugned order contends that Section 158BE of the Act prescribes time limit for completion of the block assessment. It provides that order under Section 158BC shall be passed within one year from the end of the month in which the last of the authorizations for search under Section 132 was executed in respect of searches after 30th date of June, 1995 but before 1st day of January 1997 and two years from the end of the month in which the last of the authorizations for search under Section 132 was executed in cases where search was initiated on or after the 1st day of January 1997. Therefore when the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted to the assessee is less than 15 days. Therefore, it is apparent that there has been a violation of law. Therefore, when the sum and substance of the notice issued to the assessee is not in conformity with the purpose of the Act, section 292B has no application. Hence, question No.2 is answered in favour of the assessee and against the Revenue. Further, dealing with 5th substantial question of law framed in the said case, it is held as under: "Question No.5 is as to whether the appellate authorities should have directed the Assessing Officer to pass a fresh order of assessment in view of holding that the notice is invalid. 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. 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 vio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled that the Income-tax Officer's jurisdiction to reopen an assessment under section 34 of the Income-tax Act, 1922, depends upon the issuance of a valid notice. If the notice issued by him is invalid for any reason the entire proceedings taken by him would become void for want of jurisdiction." 17. Reliance is also placed on the judgment of the Division Bench of the Kerala High Court in the case of P.N. SASIKUMAR AND OTHERS Vs. COMMISSIONER OF INCOME-TAX reported in (1988) 170 ITR 80, where in it was held that issue and service of a notice under Section 148 is a condition precedent or a matter of jurisdiction. In those circumstances, Section 292B of the Act, has no application. The fundamental infirmity cannot be called a technical objection or a mere irregularity and such vital infirmity cannot be cured or obliterated by relying on section 292B of the Income Tax Act. 18. The learned Counsel for the assessee relied on the judgment of the Apex Court in the case of ASSISTANT COMMISSIONER OF INCOME-TAX AND ANOTHER Vs. HOTEL BLUE MOON reported in (2010) 321 ITR 362 (SC), wherein the Supreme Court dealing with Section 158BC notice itself, has held as under: &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court was set aside. 21. The learned Counsel for the Revenue relied on the judgment of the Bombay High Court in the case of SHIRISH MADHUKAR DALVI Vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS reported in (2006) 287 ITR 242 (Bom). At paragraph 49, the difference between notice under Section 148 and Section 158BC has been brought out. It reads as under: "Having said so, now it is necessary to consider one more potent legal submission of Mr. Sathe that provisions of ss. 148 and 158BC are synonymous and pari material. Having examined the provisions of ss. 148(1) and 158BC, side by side, it would be clear that s.148(1) opens with words "Before making the assessment, reassessment or recomputation under s.147, the AO shall serve on the assessee a notice requiring him......." This very opening sentence, unequivocally, goes to suggest that in order to assume jurisdiction for assessment under s.147, notice under s. 148(1) is a condition precedent; whereas scheme of Chapter XIV-B of the Act suggests that s.158BA is a section which provides that notwithstanding anything contained in any other provisions of this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin 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 clause (i) of sub-section (1) of section 142, setting forth his total income including the undisclosed income for the block period : Provided that no notice under section 148 is required to be issued for the purpose of proceeding under this Chapter: Provided further that a person who has furnished a return under this clause shall not be entitled to file a revised return;] (b) the Assessing Officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section158BB and the provisions of section 142, sub-sections (2) and (3) of section143, section 144 and section 145 shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive 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) the total undisclosed income relating to the block period shall not include the income assessed in any regular assessment as income of such block period; (c) the income assessed in this Chapter shall not be included in the regular assessment of any previous year included in the block period. (3) Where the assessee proves to the satisfaction of the Assessing Officer that any part of income referred to in sub- section (1) relates to an assessment year for which the previous year has not ended or the date of filing the return of income under sub- section (1) of section 139 for any previous year has not expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractice, 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 file return for the block period, as the block period is defined under Act, the period for which the return is to be filed is also known. There is no ambiguity. If there are several searches, most of them not in his premises but in the premises of others, with whom he has transactions, if that is not brought to his notice, he will be completely in dark and he would not be able to file a proper return. In such circumstances, it is open to the assessee to seek for particulars which he wants, to file a proper return. Unless the prejudice is pointed out and a statutory notice validly issued as per the require ..... X X X X Extracts X X X X X X X X Extracts X X X X
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