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TMI Blog2015 (3) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... gned orders of the Ld. CIT(A)-I, Nagpur dated 28-03-2003 and this appeal is arising out of block assessment framed u/s. 158BC r.w.s. 144 of the Income-tax Act for Block Period 01-04-1990-11-08-2000. This appeal was filed in the ITAT, Mumbai Benches, Mumbai and vide order of Hon'ble President, Income Tax Appellate Tribunal, Mumbai dated 09-02- 2012, this appeal was transferred to ITAT, Pune Benches, Pune on the application made by the legal heirs of the deceased assessee dated 27-04-2011. The assessee has taken the legal grounds as well as grounds on merit. We first decide the legal grounds taken by the assessee. Ground Nos. 1 and 2 are the legal grounds which read as under: 1. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the ACIT even though the order was bad in law and void ab initio as the same had been framed in pursuance of an invalid notice issue u/s. 158BC. 2. The learned Commissioner of Income Tax (Appeals) erred in confirming the order of the ACIT even though the order was bad in law and void ab initio as the same had been framed in pursuance of a notice issue u/s. 143(2) which was served on the appellant beyond the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r fresh disposal. He also submitted that the said appeal was decided without presence of the assessee on 25- 08-2006 and so far as the legal issue in this appeal is concerned it is legal issue and it can be independently decided. 4. We have heard the rival submissions of the parties and perused the record. The Ld. Counsel submits that nowhere there is a dispute in respect of factual aspect that so far as the original notice issue to the deceased assessee u/s. 158BC dated 30-11-2000, it was mentioned that the assessee should file the return for the Block Period within 15 days from the date of receipt of notice . He submits that Sec. 158BC though lays down a procedure but the Assessing Officer assumes the jurisdiction only when the notice is issue to the assessee directing the assessee to file the return of income for the Block Period as it then was. He submits that this issue has come for the consideration before the Hon'ble ITAT, J Bench, Mumbai in the case of Shri Ravendra M. Patil, Mumbai Vs. Dy. CIT, Central Circle-1, Thane/Mumbai being ITSS 143 196/Mum/2005 order dated 29-08-2012. He submits that in the case of ACIT and Another Vs. Hotel Blue Moon 321 ITR 362 (SC) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he further time of one month for filing the return for the Block Period and the same was granted and according to the extended time limit the assessee filed his return for the Block Period on 22-01-2001. In the notice, it was mentioned that the assessee should file his return for the Block Period within 15 days from the date of receipt of the said notice . Now, the legal issue before us is whether the notice issued by the Assessing Officer u/s. 158BC(a) dated 03-11-2000 comply with the mandatory requirement of the said statutory provision. One of the important requirements is that the notice must be served on the searched person and the second mandatory requirement is that he must be given minimum 15 days time, as per the provisions applicable at that point of time, to the assessee for filing his return for the Block Period. 7. In the case of Hotel Blue Moon (supra) the Hon'ble Supreme Court has examined whether the notice u/s. 143(2) of the Income-tax Act was required to be served on the assessee within the prescribed time limit given while framing the block assessment in consequence of the search and seizure actions which are applicable up to 30-06-2003. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earthed as a result of search without affecting the regular assessment made or to be made. Search is the sine qua non for the block assessment. The special provisions are devised to operate in the distinct field of undisclosed income and are clearly in addition to the regular assessments covering the previous years falling in the block period. The special procedure of Chapter XIV-B is intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. It is not intended to be substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of accounts or documents and such other materials or information as are available with the AO. Therefore, the income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under s. 132 or requisition under s. 132A of the Act. 13. Sec. 158BC stipulates that the chapter would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a return could be filed. When any search has been conducted under Section 132 or books of account, other document or assets are requisitioned under Section 132A, it is only then, the Assessing Officer shall proceed to assess the undisclosed income. Therefore, Section 158 BA provides for jurisdiction to the Assessing Officer to assess the undisclosed income in accordance with Chapter XIV-B. Section 158BA(2) is a charging section, 158BB provides for computation of undisclosed income for the block period and 158BC provides for procedure for block assessment. Therefore, a notice under Section 158BC cannot be equated with that of notice under Section 148. A notice under Section 158 BC provides for a procedure to be adopted for block assessment. Under this procedure envisaged, the Assessing Officer shall serve a notice requiring the assessee to furnish his return within such time not being less than 15 days but not more than 45 days as specified in the notice. Therefore, the time to be granted to the assesse in terms of Section 158BC is a minimum of 15 days and a maximum of 45 days. If the said period of time is not granted, the notice is invalid rendering the entire proceedings as wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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. 9. Thus, it is clear that the time period to be allowed for furnishing the return of income is not less than 15 days which means the time period must be more than 15 days but not more than 45 days. The words used in the provision is not being less than 15 days and not within 15 days . Therefore, there is a clear difference between the time period allowed for furnishing the return within 15 days and not less than 15 days, which means more than 15 days with a rider of 45 days. The term not less than 15 days has been clarified by the CBDT in Circular No.717 in Para 39.3(e) as under: (e) Procedure for making block assessment: The Assessing Officer shall serve a notice on such person requiring him to furnish within such time, not being less than 15 days, as may be specified in the notice, a return in the prescribed form and verified in the same manner as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s. Winter Care Private Ltd., vs. Deputy Commissioner of Income-Tax, disposed off on 15.02.1993 passed in W.P. No. 33832/1992, wherein it was held that when the notice did not conform with the requirements of provisions of the Act, the proceeding requires to be quashed. 14. The proceedings under Chapter XIV-B and the provisions of Section 139 are different. A return filed under Section 139 is a voluntary return. A return under Chapter XIV-B cannot be filed voluntarily. It is only when a notice under Section 158BC would be issued by the revenue. However, as and when validity issued, it is only then that a return could be filed. When any search has been conducted under Section 132 or books of account, other document or assets are requisitioned under Section 132A, it is only then, the Assessing Officer shall proceed to assess the undisclosed income. Therefore, Section 158 BA provides for jurisdiction to the Assessing Officer to assess the undisclosed income in accordance with Chapter XIV-B. Section 158 BA(2) is a charging section, 158BB provides for computation of undisclosed income for the block period and 158 BC provides for procedure for block assessment. Therefore, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return. 47. Pursuant to the above notice dt. 17th Sept., 1998, the appellant approached the Dy. CIT vide his letter dt. 28th Sept., 1998 and sought further extension of 45 days for filing block period return. He has, accordingly, filed his return on 2nd Nov., 1998, declaring total income of ₹ 1,01,33,700. The same was accordingly assessed vide assessment order dt. 30th June, 2000. 48. It is not in dispute that notice dt. 6th July, 1998 did not cause any prejudice to the appellant. During the course of hearing, we specifically asked Mr. Sathe as to what prejudice was suffered by the appellant on account of alleged defective notice dt. 6th July, 1998. He made a positive statement - no specific prejudice was suffered by the appellant. At any rate, the notice dt. 6th July, 1998 suffered from only technical defects, if any, and, in our opinion, it was protected under the umbrella of s. 292B of the Act 12. It is clear from the facts of the said case that when the subsequent notice was issued then the alleged defective notice did not cause any prejudice to the assessee. Therefore, the said decision is not applicable in the facts of the present case where the only notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision of the Hon'ble Supreme Court in the case of Hotel Blue Moon (supra) in which it is held that issuing the notice u/s. 158BC(a) is a mandatory requirement and the said notice is the foundation for jurisdiction of the Assessing Officer to assess undisclosed income of the searched person. Moreover, the ITAT, Mumbai Bench has also explained the observation of the Hon'ble jurisdiction High Court in the case of Shri Ravendra M. Patil (supra). In the light of our above discussion and reasoning, we hold that as in the present case the notice issued by the Assessing Officer u/s. 158BC(a) of the Act dated 30-11- 2000 did not give the minimum time of 15 days to the deceased assessee for filing his return of income for the Block Period, the said notice was notice in compliance with mandatory requirement of Sec. 158BC(a) of the Act and the assessment framed in consequence of the legally void notice u/s. 158BC r.w.s. 144 of the Income-tax Act vide order dated 22-08- 2002 is bad in law and we cancel the assessment order. Accordingly, Ground No. 1 is allowed. 12. So far as Ground No. 2 is concerned the Ld. Counsel submitted that as per the instruction of the assessee, he i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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