TMI Blog2013 (12) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... R.K. Upadhyay appears for the Income Tax department. In pursuance to the search and seizure operation on the business and residential premises of the assessee/ appellant, on 14th May, 1997, a notice under section 158 BC of the Income Tax Act (the Act) was issued. In compliance of which, a "return" in the prescribed Form 2-B was filed on 10th August, 1998 by the assessee showing an income of Rs.16,59,595/-. On the admitted tax liability on the income so shown in the return in Form 2-B, amounting to Rs.9,95,757/-, was discharged by payment. On the enquiries made by the Assessing Officer, thereafter, through the notices issued under Section 142 (1) of the Act, prior to the filing of "return" as aforesaid as also thereafter, a block assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of compliance is fixed for 29.6.98." 6. 29.6.1998 The matter was adjourned with the order as follows:-"Shri Anil Jaiswal, Authorised Representative appeared along with Shri Kamta Prasad Garg, Partner. Reason for not filing of return is stated to be dissension amongst the partners. Written explanation filed. In compliance of the questionnaire dated 15.6.1998, adjournment is granted to 14th July, 1998." 7. 31.8.1998 A return was filed in the prescribed form showing undisclosed income of Rs.16,59,595/-. 8. 13.11.1998 Notice under section 142 (1) along with questionnaire issued. 9. 23.11.1998 Inspection of seized material took place. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance of the provision of section 143 (2) at the part of the Assessing Officer does not go to affect the validity of block assessment order dated 25th/28th May, 1999 as has been passed in the case of the assessee? (iii) Whether the Tribunal was legally correct in holding that in view of the phraseology "so far as may be" as appearing in section 158 BC (b), the applicability of section 143 (2) as a whole, to the block assessment proceedings, was optional at the end of the Assessing Officer and non-issuance (by the Assessing Officer) and non-service (on the assessee) of such a notice does not affect the validity of block assessment order? (iv) Whether the Tribunal was legally correct in holding that the Circular No.717 dated 14th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that after filing the block assessment on 10.08.1998, no notice under Section 143 (2) was issued by the A.O." In Asstt. CIT v. Hotel Blue Moon, (2010) 321 ITR 362 (SC), it was held by the Supreme Court that if the Assessing Officer for any reason repudiates the return filed by any assessee in response to the notice under Section 158 BC (a) of the Act relating to the block assessment, the Assessing Officer must necessarily issue notice under Section 143 (2) of the Act within the time prescribed. In the proviso to Section 143 (2), the issuance of notice is mandatory and that the very foundation of the jurisdiction under Section 158BC of the Act requires a notice to be served on the person, who is found to have undisclosed income. The req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the provisions of the Act, and such assessee shall be precluded from taking any objections in any proceedings or enquiry under the Act that the notice was not served upon him or not served upon him in time or served upon him in an improper manner. The Court observed:- "The Supreme Court held in Hotel Blue Moon's case that if the Assessing Officer, for any reason, repudiates the return filed by an assessee in response to notice under Section 158BC (a) of the Act relating to a block assessment, the Assessing Officer must necessarily issue notice under Section 143 (2) of the Act within the time prescribed in the proviso to Section 143 (2). It was further held that by making the issue of notice mandatory, Section 158BC, dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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