TMI Blog2001 (7) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... f: (a) non-issuance/non-service of notice under s. 158BC as per the provisions of law; (b) that the valuation report which was made the basis of addition of a sum of Rs. 10,90,200 was not capable of being treated as an evidence against the appellant. 4. Because the appellant is not a person subjected to search under s. 132(1) as there existed no search warrant in his case and the block assessment order made by invoking the provisions contained in Chapter XIV-B is liable to be declared as null and void." 5. Because in any case the learned AO never acquired the jurisdiction to pass the block assessment order, as mandatory requirement of issuing notice under s. 143(2) was not fully valid. 3. S.K. Garg, FCA appeared on behalf of the assessee, whereas Ram Lal, the learned Departmental Representative represented the Department. 4. Before proceeding to consider the grounds of appeal, it would be proper to point out certain facts relating to the proceedings in this appeal, which are as follows. 5. Vide order dt. 17th April, 2000, the Bench was of the opinion that a remand report may be called from the AO and for this purpose, directed the AO to submit his remand report by 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there has to be a valid authorization of search in the case of the assessee, because the assessment under s. 158BC can be made only on the basis of undisclosed assets found during the course of search. In support of his arguments, the learned counsel also placed reliance on the decisions in the case of: 1. Microland Ltd. vs. Asstt. CIT (1999) 63 TTJ (Bang) 701 : (1999) 67 ITD 446 (Bang); 2. Verma Roadways vs. Asstt. CIT (2001) 70 TTJ (All) 728 : (2001) 75 ITD 183 (All); 3. Decision of ITAT, Allahabad Bench in the case of Mongha Metals (P) Ltd. vs. Asstt. CIT [ITA No. 1377/All/1997, dt. 30th June, 1999]; and 4. The decision of ITAT, Patna Bench in the case of Shanti Complex vs. ITO (1999) 237 ITR 27 (AT). 10. The learned Departmental Representative, on the other hand, submitted that there was a search warrant issued on 17th Oct., 1995, in the joint name of Shelja Jain and Narendra Kumar Jain and, therefore, it cannot be said that the assessment order is not valid. According to him, in pursuance of the search warrant in the case of Brij Kattha factory, incriminating materials relating to the accused was also disclosed. 11. We have carefully considered the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h warrant in the names of Smt. Shelja Jain and Narendra Kumar Jain for searching the locker in their joint names can also not justify any search in the case of the assessee. It may be pointed out during the course of hearing that the learned Departmental Representative was specifically asked to point out and specify the material or documents, which were found during the course of search and which were relating to the assessee. In any case, even if some valuable assets or documents or any incriminating material was found relating to undisclosed income of the assessee during the course of search in the case of the company, then also proceedings for block assessment under s. 158BC cannot be sustained. In that situation, since the material recovered or discovered relates to other person , the proper course is to initiate assessment proceedings under s. 158BD of the Act, which course has not been adopted in the case of the present assessee. 14. To conclude, since there was no authorization of search in the name of Narendra Kumar Jain (Individual), in our view, there was no search in his case. Further, since the block assessment under s. 158BC is in consequence of a valid search condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be mentioned that if there was any omission on the part of the AO to issue notice under s. 143(2), the assessment would not be nullity. In this regard, reliance is placed in the case of Sant Baba Mohan Singh vs. CIT (1973) 90 ITR 197 (All). A photocopy of the Hon ble High Court order is enclosed." The above report of the learned senior Departmental Representative makes it clear that no notice under s. 143(2) was issued in the case of the assessee. 18. So far as the requirement of notice under s. 143(2) of the Act in block assessment proceedings under Chapter XIV-B is concerned, in the case of Rakesh S. Mardiya vs. Dy. CIT (IT(SS) No. 30(Ahd) 2000 and ITA (SS) No. 30 (Ahd)/2000), the Ahmedabad Bench C of Tribunal vide its order dt. 24th Oct., 2000 held that s. 143(2) along with its proviso are applicable to block assessment proceedings also. According to the Bench, in the absence of any specific provision restricting the scope of s. 143(2), the said section has to be applied along with proviso and the case of the AO for non-applicability of the proviso will not survive. Regarding curability of the defect on account of omission on the part of the AO in not issuing a notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alone. 20. In the result, this ground of the assessee is also allowed in favour of the assessee. 21. Since the assessment order has been quashed in view of the legal grounds decided in favour of the assessee, the other grounds, namely, grounds No. 1 and 3(a), which assail the assessment order on merits are not required to be disposed of. In view of the above, the assessment order passed under s. 158BC dt. 30th Oct., 1996, is quashed. 22. The appeal is allowed. ITA No. 1854/All/1996 23. The assessee has taken five grounds in this appeal to challenge the block assessment order dt. 30th Oct., 1996. 24. S.K. Garg. F.C.A. appeared on behalf of the assessee, whereas Ram Lal, Departmental Representative represented the Department. 25. The assessee has taken five grounds which are finally pressed grounds of appeal. Out of these five ground, ground No. 2 has not been pressed at the time of hearing of the appeal. Hence, only remaining four grounds are to be adjudicated. Whereas ground No. 3(a), 4 and 5 assail the assessment order on legal grounds, the remaining grounds, viz., ground Nos. 1 and 3(c) challenge the block assessment order on merits. Ground No. 3(a) 26. The argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there was no search warrant in the case of the assessee, namely, Smt. Radha Jain. A perusal of assessment order also reveals that there was search in the residential premises of Ramesh Chandra Jain, director of the company at 4/279, Tilak Nagar, and during the course of search of these premises, certain locker and keys were found, which were stated to be belonging to the locker in the joint names of Pradeep Jain, director of M/s Brij Kattha Industries and Smt. Radha Jain (wife of Pradeep Jain). It is not the case of the Department that premises at 4/279, Tilak Nagar, belonged to the assessee. It is also not the case of the Department that any search warrant in the individual name of the present assessee, namely, Smt. Radha Jain or joint name of Radha Jain and Pradeep Jain was issued under s. 132 of the Act. Thus, it could not be proved that there was valid authorization of search in the case of the assessee. Since in our view, no valid search was conducted in the case of the assessee, the assessment order for the block period under s.158BC, cannot be legally sustained. It may also be pointed out that if during the course of search of any premises of any person, the undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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