TMI Blog2016 (8) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... which was issued by the authority asking the assessee to file the return within fifteen days is not in accordance with the provisions of the Income-tax Act and therefore it is invalid. In our view, the authority who is issuing the notice must be aware of the Act and must construe the provision strictly. The words `not less than fifteen days’ have to be interpreted correctly. In that view of the matter, since the Assessing Officer asked the assessee to file the return within fifteen days of the service of the notice, the notice issued by the Assessing Officer is invalid. We are, therefore, of the opinion that the Tribunal has rightly cancelled the order of the Assessing Officer. The questions referred to us are, therefore, answered in favour of the assessee and against the revenue. - TAX APPEAL NO. 243 of 2007 With TAX APPEAL NO. 244 of 2007 - - - Dated:- 11-8-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR. M.R. BHATT, SR. ADVOCATE WITH MRS MAUNA M BHATT, SR. STANDING COUNSEL FOR THE OPPONENT : MR. HARDIK V VORA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of these appeals under section 260A of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer is a mere typographical error and the notice as well as the proceedings, in substance and effect, is in conformity with provisions of the Act. Sections 158 BC and 292B of the I.T. Act read as under: 158BC - Where any search has been conducted tinder section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then,- (a) the Assessing Officer shall: (I) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time, not being less than fifteen days; (ii) in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but not more than forty-five days, as may be specified in the notice a return in the prescribed form and verified in the same manner as a return under clause (i) of subsection (1) of section 142, setting forth his total income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing decisions: (1) Shirish Madhukar Dalvi v. Assistant Commissioner of Income-tax and others [2006) 287 ITR 242 (Bom) where the Bombay High Court has observed as follows: Before we deal with the aforesaid contentions raised on behalf of the rival parties in the light of the above extracted statutory provisions, it is appropriate to first consider the law laid down by the apex court with various other High Courts relevant to the facts of the case at hand. In the case of State of Karnataka v. Muniyalla, AIR 1985 SC 470, it is held that merely because an order is purported to be made under a wrong provision of law, it does not become invalid so long as there is some other provision of law. In the case of Hukumchand Mills Ltd. v. State of Madhya Pradesh (1964) 52 ITR 583 (SC); AIR 1964 SC 1329, the apex court has ruled that mere mistake in the opening part of the notification in reciting the wrong source of power does not affect the validity of the amendments made. In the case of State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364, the apex court ruled that in the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry if the context or the intention otherwise demands. (see: Sainik Motors v. State of Rajasthan, AIR 1961 SC 1480, para 12). 97. It is important to that in Crawford on Statutory Construction at page 539, it is stated: `271. Miscellaneous implied exceptions from the requirements of mandatory rules, in general Even where statute is clearly mandatory or prohibitory, yet, in many instances, the courts will regard certain conduct beyond the prohibition of the statute through the use of various devices or principles. Most, if not all of these devices find their jurisdiction in considerations of justice. It is a well-known fact that often to enforce the law to its letter produces manifest injustice, for frequently equitable and humane considerations, and other considerations of a closely related nature, would seem to be of a sufficient calibre to execute or justify a technical violation of the law. In the case of Balchand v. ITO (1969) 72 ITR 197, the apex court ruled that merely because of a defect in service of notice, the assessment order does not become invalid. Similarly, the apex court in the case of Jai Prakash Singh (1996) 219 ITR 737 went on to hold that non-service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In the said case, the Supreme Court held that in the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. An order passed in violation of such provision can be set aside only when such violation has occasioned prejudice to the subject. Even mandatory requirement can be waived by the person concerned, if the mandatory provision is conceived in his interest and not in the public interest. The conduct of the subject is required to be examined and kept in mind. Procedural rules are assigned to afford a full and proper opportunity to the person concerned to defend himself. 3. Commissioner of Income-tax v. Jagat Novel Exhibitors P. Ltd. (2013) 356 ITR 559 where at paragraph Nos. 41 and 45, it was observed as follows: 41. The aforesaid observations are significant. In the present case, the Tribunal has not held that the jurisdictional preconditions were missing or not satisfied. Reasons to believe have been recorded. Notice has also been issued within the limitation period. The question whether the notice was addressed to the correct person has been examined and dealt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lvi s (supra) the Bombay High Court considered the nature of the proceedings contained in section 158BD. On going through the provisions contained under sections 147, 148 and 158BC, the Bombay High Court held that section 158BA refers to jurisdiction of the Assessing Officer to assess undisclosed income in accordance with Chapter XIV-B, whereas Section 158BA(2) is the charging section, section 158BB provides for computation of undisclosed income for the block period, whereas section 158BC provides the procedure for block assessment. In the decision in Sakthivel Bankers (supra) this court held that failure to mention the provision in the notice was not a circumstance which could be said to vitiate the ultimate order. The said decision relates to the assessment made consequent on the search conducted in assessee s place and notice was issued thereon to eight firms and to the wife of the assessee. Referring to Section 158BD, this court held that non mentioning of the purpose for which the notice was issued or the source of the authority of the Officer issuing the notice per se would not defeat the aspect of the persons against whom the notice issued were fully aware of the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l base because the provisions of rule 1(v) of the Second Schedule were not satisfied. According to him, under the term loan-agreement dated 1.8.1964 the last instalment was to be paid on 31.7.1971 and as such, the period of repayment was less than seven years. He further contended that in the context the expression `during a period of less than seven years means a period of more than seven years. The learned counsel for the respondent, on the other hand, argued that the term loan was payable within the period of seven years. According to him, the period of seven years is obviously a period which is `not less than seven years . 7. We are of the view that on the plain reading of the proviso to rule 1(v), Second Schedule it is clear that in order to claim benefit of the said provision the borrowed money has to be repaid during the period of more than seven years. The only interpretation which can be given to the expression `during a period of not less than seven years is that the said period should go beyond seven years. The reasoning is simple. The period of seven years would not complete till the last `minute or even the last `second of the said period are counted. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 348 ITR 75 (Karnataka) to submit that calling upon the assessee to file the return of income within a period of 15 days is in violation of mandatory period of time as stipulated under section 158BC of the Income-tax Act. He has contended that the Karnataka High Court after considering the decision of Bombay High Court in the case of Shrish Madhukar Dalvi v. Asst. CIT (2006) 287 ITR 242, has observed that the defect in the notice is vital and held that notice under section 158BC is mandatory. In paragraph No. 26 of the said judgement, the Karnataka High Court has observed as under: The contention is unacceptable. The time to be granted in terms of section 158BC is mandatory. Having failed to comply with the same, granting another opportunity to the revenue is highly improper. If that were to be so, then each and every violation of law by the revenue would stand rectified by orders of remand. That is not the intent and purport of the Act. The period as specified in the Act requires to be strictly complied with. Therefore, the plea of the revenue for a direction to pass fresh orders of assessment after complying with the provisions of section 158BC requires to be rejected. Conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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