TMI Blog2013 (7) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... as allowed the rectification application filed by the assessee under Section 254(2) of the Act against the order passed earlier on 28.04.2006 and has held, with reference to dictum of the Hon'ble Supreme Court in the case of ACIT Anr. Vs. Hotel Blue Moon: 321 ITR 362, that completion of assessment under Section 158BC of the Act without issuance of notice under Section 143(2) of the Act within prescribed time was wholly without jurisdiction and void ab-initio. In brief, the relevant background aspects of the matter are that search and seizure operations took place at the residential premises of respondent-assessee on 07.04.1999 which, as per assessee were concluded on 09.04.1999 whereas the Assessing Officer [the AO] observed that last panchnama was drawn on 26.07.1999. In response to the notice issued under Section 158BC of the Act on 18.10.1999, the assessee filed the return for the block period on 09.12.1999. The AO issued notice under Section 142(1) on 08.12.2000 and then, the notice under Section 143(2) of the Act on 15.02.2001. The assessment was completed by the AO on 25.10.2001. In the appeal before the Commissioner of Income Tax (Appeals), Kota [CIT(A)], the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an application per Section 254(2) of the Act for modification of the order dated 28.04.2006. The ITAT proceeded to allow the application so moved by the assessee in its impugned order dated 12.10.2010 while observing as under: - 5. After considering the submissions, we find that at the time of disposing of the appeal of the department, the decision of Hon'ble Apex Court was not available and, therefore, the same could not be taken into consideration. Now the decision of Hon'ble Apex Court has come by which it has been held that before completion of the assessment under section 158BC issuance of notice under section 143(2) within the prescribed time is mandatory. Therefore, we recall the order of the Tribunal in ITSSA No.106/JP/2002. 6. Now the appeal of the department is disposed off accordingly. The following ground has been taken by the department before the Tribunal:- The ld. CIT (A) has erred in annulling the assessment order made by the Assessing Officer u/s 158BC/143(3) on 25.10.2001 on legal ground of not issuing the notice u/s 143(2) within 12 months from the end of the month in which the return of income was filed. 7. The issue is squarely covered by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion in ACIT Vs. Saurashtra Kutch Stock Exchange Ltd.: 305 ITR 227 that only when an issue has been settled by the Apex Court or jurisdictional High Court, failure to apply the same could be treated as a mistake apparent from the record. The contention of the learned counsel for the appellant is that when ITAT allowed the appeal of the revenue on 28.04.2006, there was no such law as propounded in the case of Hotel Blue Moon (supra), which was decided on 02.02.2010 and, therefore, the application for rectification of mistake was not maintainable on the basis of this subsequent decision rendered by the Hon'ble Apex Court. It is also submitted that though in the impugned order, the ITAT has given a categorical finding that the decision of the Hon'ble Apex Court in the case of Hotel Blue Moon was not available at the time of disposing of the appeal of the department and the cross-objections of the assessee yet, the rectification application was allowed and thereby, under the garb of rectification, a review has been carried which is not permissible in law. The learned counsel also submitted that the Hon'ble Apex Court in Hotel Blue Moon (surpa) has held that notice under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment a nullity. These observation of the ITAT led to the restoration of matter to the file of CIT(A) who, consequently, passed the order on 22.05.2009. However, the matter remained sub-judice before the ITAT with the revenue having filed an appeal (ITSSA No.20/JP/2009); and the assessee having filed cross-objections therein (CO No.152/JP/2009) against this order dated 22.05.2009. In the meantime, the law came to be declared by the Hon'ble Supreme Court in no uncertain terms in Hotel Blue Moons case (surpa) that if the AO repudiates the return filed under Section 158BC(a), a notice, within prescribed time, under Section 143(2) must be issued; and omission to do so was not a mere procedural irregularity. In Hotel Blue Moon, the Hon'ble Supreme Court, inter alia, held as under:- .However, if an assessment is to be completed under section 143(3) read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple which has to be applied. The doctrine of prospective over-ruling has always been considered to be an exception to this general rule. Moreover, the very jurisdiction for rectification is for the purpose of securing justice. These aspects have been highlighted in the very decision referred on behalf of the appellant-revenue in Saurashtra Kutch Stock Exchange Ltd. (supra) wherein, the Hon'ble Supreme Court has observed and held as under: - 42. In our judgment, it is also well settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the court to pronounce a new rule but to maintain and expound the old one. In other words, Judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later decision) does not make new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the court operated for quite some time, the decision rendered later on would have retrospective effect clarifying the legal position which was earlier not cor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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