TMI Blog2017 (3) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee to file a return under Section 158BC and the assessee is entitled to not less than 15 days to file the return, the section does not indicate that if the notice inadvertently prescribes a period less than 15 days, it is void. Much less does the section indicate that the entire block proceedings relating to the block assessment would be void on account thereof. - Decided in favour of the assessee. - D. B. Income Tax Appeal No. 2 / 2008 - - - Dated:- 21-3-2017 - K. S. Jhaveri ACJ And Mahendra Maheshwari, JJ. For the Appellant : Mr. P.K. Kasliwal For the Respondent : Ms. Parinitoo Jain JUDGMENT Per Hon ble Jhaveri, Acting CJ. 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly allowed the appeal. 2. This Court while admitting the appeal on 25.01.2008 has framed the following substantial questions of law: 1. Whether notice issued U/s 158 BC of the Income Tax Act, 1961 dated 3.12.98 by the assessing officer to file return of income within 15 days is correct in law irrespective of the fact that statutory requirement under the Act is provided not being less than 15 days, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the said documents does not belongs to the assessee and is a dumb document, such conclusion is legally sustainable? 7. Whether, on the facts in the circumstances of the case, the Tribunal was justified in sustaining the addition of ₹ 10,00,000/- towards undisclosed investment in stock, which is without any basis, further the addition, based on incomplete material, estimation, surmises conjectures is legally sustainable in Block Assessment? 8. Whether, on the facts in the circumstances of the case, the Tribunal was justified in sustaining the addition of ₹ 1,00,000/- towards undisclosed investment in factory premises, merely on the basis of statement of the assessee without considering the various replies, statements and documents filed by the appellant assessee, such conclusion is not perverse? 3. Counsel for the appellant has contended that the issues are squarely covered by the decision of this Court in the case of M/s Kumawat Udyog Bus Stand Bandanwara vs. The Commissioner of Income Tax, Ajmer Anr. in DB Income Tax Appeal No.49/2009, decided on 01.03.2017, which reads as under: 1. By way of this appeal, the appellant has chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved and no contention was raised against the same before the Assessing Officer. The assessee filed return of income on 13.1.1999 for the relevant assessment year and thereafter, the assessee has raised the contention before the Tribunal that the Assessing Officer has not given sufficient time to the assessee to file the return of income and therefore, the notice issued by the Assessing Officer is invalid. He has further contended that in view of section 292B read with section 158BC of the Act, the Tribunal has committed serious error in reversing the decision of the Commissioner of Income-tax (Appeals) and the Assessing Officer. He has relied on the following decisions: (1) Shirish Madhukar Dalvi v. Assistant Commissionerof 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, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has observed as under (page 212): `74. In this case, it is not necessary for us to go into the question as to whether section 83 is imperative in character or not inasmuch as it is settled law that even where the expression `shall is used, the same may not be held to be mandatory. Even a mandatory provision having regard to the text and context of the statute may not call for strict construction. 75. In U.P. State Electricity Board v. Shiv Mohan Singh (2004) 8 SCC 402, this court stated the law in the following terms: ( SCC p. 440, paras 96-97)`96. Ordinarily, although word `shall is considered to be imperative in nature it has to be interpreted as directory 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product on technicalities. 18. In view of our findings on the second contention, which are against the appellantassessee and in favour of the revenue, the third contention loses its relevance and is not required to be decided. However, we may notice that the Tribunal in this regard has followed the judgement of the Bombay High Court in Shirish Madhukar Dalvi (2006) 287 ITR 242 (Bom.), wherein a distinction has been made between service of notice under sections 147 and 158BC of the Act. It has been held that section 158 BC is a procedural section and not a substantive section and, therefore, the ratio and the decision in State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364 applies. 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / 156 Taxman 79 (Bom.), Smt. Mahesh Kumari Batra v. Jt. CIT (2005) 146 Taxman 67/95 ITD 152 (Asr.) (SB) as well as Sakthivel Bankers case (supra) (255 ITR 144) and submitted that when the assessee had acted on the notice and filed the return knowing fully well the period of block assessment, yet considering the fact the notice issued under section 158BD is only procedural and not related to assumption of jurisdiction, it is not open to the assessee to contend that the assessment was not valid. 16. As far as the non mentioning of the block period in the notice issued under section 158BD is concerned, in the decision relied on by learned Standing Counsel for the revenue in Shirish Madhukar Dalvi 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. Consequently, question No. 5 is answered in favour of the assessee and against the revenue. 6. We have heard learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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