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2006 (2) TMI 213 - AT - Income TaxValidity of the assessment framed in pursuance of the notice issued u/s. 158BC - period of limitation - Block Assessment in search case - HELD THAT:- As in the present case, the assessing authority did not provide clear period of 15 days for filing the return, in our considered opinion, the basic and prerequisite conditions of law or mandatory requirement of legal provision was not satisfied. Such a notice is illegal and void and neither the departmental authorities are capable to cure the defect nor the assessee can waive such a prerequisite requirement of law. Thus, the notice is held to be illegal, void and the assessment order passed in consequence of such illegal notice is void ab initio and such assessment is to be quashed. Ground No. 2, taken by the assessee is therefore allowed. It is observed that the foundation for assumption of jurisdiction is the satisfaction to proceed u/s 158BD against a person not searched. The issuance of notice, after record of such satisfaction, is another requirement, which entitles the Assessing Officer to assume jurisdiction to assess the undisclosed income of such person. Thus, if necessary satisfaction has not been recorded prior to making of assessment u/s 158BD, such assessment cannot be legally justified. Thus, on this basis the assumption of jurisdiction to assess u/s 158BD is on different footing than the assumption of jurisdiction u/s 158BC. It can, therefore, be concluded that if the Assessing Officer does not record satisfaction prior to the making of assessment u/s 158BD, such assessment has to be quashed, as was done in the case of Amity Hotels (P.) Ltd[2004 (10) TMI 27 - DELHI HIGH COURT]. In the case of R.K. Upadhayaya v. Shana Bhai P. Patel [1987 (4) TMI 5 - SUPREME COURT], the Hon'ble Supreme Court, has held that there is a clear distinction between issuance of notice and service of notice. It was observed in that case that service under the new Act is not a condition precedent to the confirmation of jurisdiction on the ITO but it is a condition precedent for making the order of assessment. Thus, the service of a valid and legal notice requiring the assessee to furnish return after fifteen days is a necessary condition and mandatory requirement for assuming jurisdiction for making assessment u/s 158BD and if such condition is not satisfied then the assumption of jurisdiction for making assessment u/s 158BD cannot be legally justified. Hence, we allow the plea of the assessee for challenging the assessment order on the basis of a defective notice, which is to be treated as no notice in the eye of law. It is to be repeated here that the assessee has not acquiesced in the exercise of jurisdiction by the Assessing Officer in the present case nor did he filed any return in pursuance or in compliance to the notice issued to him, rather he challenged the very validity of the notice and also of the jurisdiction of the Assessing Office:- Thus, the assessment made in this case is liable to be quashed on the ground mentioned above. Hence, the assessment is quashed on this ground itself. Consequently, ground No. 1 as taken by the assessee stands allowed. As we have quashed the assessment order on the ground as mentioned above, we are not required to dispose off other grounds of appeal on merit. In the result, assessee's appeal stands allowed accordingly.
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