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2014 (11) TMI 692 - AT - Income TaxValidity of block assessment u/s 158BC – Order beyond period of limitation or not – Notice u/s 143(2) not provided to assessee - Held that:- There were a series of such correspondences through which the Revenue Department has fairly accepted the fact that there was no notice u/s 143(2) ever existed or issued or served - in a situation when a letter was issued by the Revenue Authority and that letter was responded by the assessee then whether there was a legal requirement to issue a notice u/s 143(2) of IT Act especially when the assessee has participated in the proceedings - on receiving that letter the assessee has responded on 07.11.2000 and requested the AO to issue notice u/s 143(2) of IT Act by specifically mentioning that in block assessment proceedings to be held u/s.158BC it is mandatory to issue a notice u/s.143(2) of IT Act - in the absence of the requisite notice u/s.143(2), the participation in the proceedings by the assessee was under protest. Even after pointing out to the AO about the mandatory requirement of the issuance of notice u/s. 143(2) of IT Act, the AO had not taken the cognizance and proceeded to finalize the assessment without issuing the said requisite notice u/s.143(2) of IT Act. The notice must have been served otherwise there was no occasion for the assessee's representative to attend the assessment proceedings before the AO - There was evidence that the assessee had participated in the assessment proceedings pursuant to the said notice; hence, it was held that the notice u/s. 143(2) was validly served - by virtue of the provisions of Section 147/148 itself the assessment must not be rendered as null and void - u/s.158BC(b) the AO should proceed to determine the undisclosed income of the Block Period in the manner laid down in the provisions of Section 143(2) and (3) of the Act so far as may apply. This section does not provide for accepting the return as provided u/s 143(1)(a) - The AO has to complete the assessment u/s 143(3) only - In case of default in not filing the return or not complying with the notice under s. 143(2)/142, But s. 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice u/s 143(2) - Omission on the part of the assessing authority to issue notice under s.143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under s. 143(2) cannot be dispensed with - The other important feature that requires to be noticed is that the s.158BC(b) specifically refers to some of the provisions of the Act which requires to be followed by the AO while completing the block assessments under Chapter XIV-B of the Act - This legislation is by incorporation - This section even speaks of sub-sections which are to be allowed by the AO - A reading of the provision would clearly indicate if the AO, if for any reason, repudiates the return filed by the assessee in response to notice u/s 158BC(a), the AO must necessarily issue notice under s.143(2) of the Act within the time prescribed in the proviso to s.143(2) of the Act within the time prescribed in the proviso to s.143(2) of the Act. In a situation when the Tribunal Bench has given a number of opportunities to the Revenue Department to place on record any evidence of either existence or issuance/ service of notice u/s.143(2) of IT Act but no such evidence was placed and that the assessee himself has communicated to the AO during the assessment proceedings that the issuance of notice u/s.143(2) is a mandatory requirement and that the notice u/s.142(1) was not a notice after the return was filed but it was a notice served on the assessee before the block return was filed = Decided in favour of assessee.
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