TMI Blog1997 (10) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... ear that whatever decision we will be rendering in the case of Urmila Chandak (Ap. No. 1) shall be deemed as decision given in the appeals of the remaining appellants arrayed. 3. Facts (from the case of Urmila Chandak) There were search and seizure operations on 31st Aug., 1995 in the cases of S/Shri Bhojraj Chandak, father of this appellant and Madanmohan Chandak, brother of Bhojraj Chandak and uncle of this appellant. There were no search warrants issued in the name of Smt. Urmila Chandak or in the name of any of these appellants in terms of s. 132 of the Act. But the AO has mentioned in the impugned block period assessment order that various details relating to income of these appellants were found and seized. On the basis of the seized material recovered from Shri Bhojraj Chandak Shri Madan Mohan Chandak to notice under s. 158BC(a) was issued to these appellants. However in response to such a notice return for the block period was filed declaring income which was declared by this appellant during the past ten years namely the block period and the additional undisclosed income was declared in such a return filed in pursuance to the notice issued by the AO under s. 15BBC(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the block assessment is computed as under: . Rs. (i) Short-term capital loss 44,581 (ii) Income from 1995-96 42,000 (iii) Interest disallowed 17,281 Total 2,56,862 Tax thereon @ 60% 154117 4A. This has given rise to these appeals. The assessee s authorised representative Shri Ashok Kumbhat Chartered accountant submitted that there were no search operation on any of the appellants in terms of s. 132 of the Act and there were only search operation on Shri Bhojraj Chandak, father of Smt. Urmila Chandak and Shri Madanmohan Chandak, uncle of Smt. Urmila Chandak. That being the case, the provisions of s. 158BC are not at all applicable and the AO had no jurisdiction to issue a notice under s. 158BC ceiling upon the appellant-assessee to file the block period return. Nonetheless the appellant-assessee in order not to displease the AO filed block period return in pursuance to such an illegal notice issued under s. 158BC by the AO declaring income for each assessment years covered in the block period as disclosed in the original regular returns pursuant to the provisions of s. 139 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative submitted that on the basis of the appraisal report, the AO was satisfied that this was a case falling within the provisions of s. 158BC and, therefore, notice issued under that provisions calling for filing all the returns for the block period and which the assessee did file in compliance to the said notice, notification issued under s. 158BC(a) of the Act. According to the Departmental Representative the assessee after filing all the returns of the block period also complied with various notices issued under s. 142(1) and 143(2) and furnished details and various other information and explanation through her authorised representative Shri Kumbhat. Having responded to the notices issued under s. 158BC(a) r/w s. 142(1) and 143(2) of the Act, the assessee was estopped from questioning the jurisdiction of the AO before this Tribunal and, therefore, this Tribunal should not quash or annul the assessment of the block period as being without jurisdiction because jurisdiction has been conferred upon the AO by consent and acquiescence. To our query, the Departmental Representative fairly conceded that no search warrants and authorisations in terms of s. 132 were issued by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995 and as published in 212 ITR at pp. 306 to 309. The provisions of s. 158BA r/w provisions of s. 158BB of the Act clearly lay down that the AO not below the rank of Asstt. CIT is empowered to make assessment of the block period of ten years in respect of undisclosed income found as a result of search and seizure operation under s. 132 or requisition action under s. 132A of the Act and in accordance with the previous of Chapter XIV-B of the Act. What is undisclosed income for the purpose of block assessment has been clearly defined by the legislature in sub-s. (h) of s. 158B of the Act and for proper appreciation we reproduce the same: " Undisclosed income includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purpose of this Act." The provisions of s. 158BB clearly lay down that the undisclosed income of the block period shall be aggre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-assessees mentioned hereinabove. The search warrants were issued by the competent IT authority under s. 132 of the Act to conduct searches in the case of Shri Bhojraj Chandak and Shri Madanmohan Chandak, father and uncle respectively of Smt. Urmila Chandak. The AO in the impugned orders has at more than one place repeatedly stated that no account books of any other record was maintained by the appellant-assessee. When that is the case, we fail to understand how these appellant-assessees can be brought into the net of Chapter XIV-B of the Act. Therefore, the AO did not derive any jurisdiction, authority or power to issue notice to any appellant herein as provided in s. 158BC of the Act. From these facts, it is very clear that the notice under s. 158BC has been issued contrary to the legal requirements and, therefore, as contended by Shri Kumbhat, the AO had no jurisdiction to issue any notice and consequently the impugned assessments made pursuant to such illegal notices cannot stand in the eye of law and have to be annulled. 10. A study of the impugned assessment order of Smt. Urmila Chandak clearly reveals that the AO has merely reappreciated the evidence in relation to the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there were search operations on the father and uncle of Smt. Urmila Chandak. The notice issued by the AO under s. 158BC was therefore wholly invalid and without jurisdiction and as per ratio of the Hon ble Supreme Court laid down in the case of CIT vs. Kurban Hussain Ibrahimji Mithiberwala 1973 CTR (SC) 454 : (1972) 82 ITR 821 (SC), the impugned assessments are void for want of jurisdiction on account of irregularity in issuing notice under s. 158BC. The Hon ble Supreme Court in that case has clearly laid down that if a notice issued by an AO is not valid for any reasons the entire proceeding is void for want of jurisdiction. 12. The impugned assessments also are not saved on the specious plea of the Departmental Representative that al the appellant-assessees submitted and acquiesced to the jurisdiction of the AO by filing block period returns pursuant to and in compliance with notice issued by the AO under s. 158 BC(a) of the Act and further in responding to and complying with various other notices issued by him to appellant-assessees in terms of s. 142(1) as well as in terms of s. 143(2) of the Act. It is well settled and established principle of law in so far as tax procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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