TMI Blog2010 (2) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. The provisions which are specifically included are those which are available in Chapter XIV-B of the Act, which includes Section 142 and sub-sections (2) and (3) of Section 143 - Decision of HC upheld - Block assessment can not be made without issuing notice u/s 143(2) - Decided in favor of Assessee - 1198 OF 2010 - - - Dated:- 2-2-2010 - S.H. Kapadia and H.L. Dattu, JJ. JUDGMENT H.L. Dattu, J. Leave granted in all the special leave petitions. 2) These six appeals have been heard together. They arise out of similar facts and the question of law arising therefrom is the same. 3) The facts in the lead case are: This is an appeal against the judgment of the High Court of Guwahati in a appeal under Section 260A of the Income Tax Act, 1961, hereinafter referred to as 'the Act', and the point that is raised for our determination is, whether issue of notice under Section 143(2) of the Act within the prescribed time for the purpose of block assessment under Chapter XIV-B of the Act is mandatory for assessing undisclosed income d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the procedure prescribed under Chapter XIV which includes issuance of notice under Section 143(2). The learned counsel has further contended that in a proceeding under Section 158 BC, there is no requirement of a notice to be issued under Section 143(2), since issuance of notice for the purpose of Section 158 BC is separately prescribed. It is further submitted that Block assessment is in addition to regular assessment, and what is included in regular assessment, cannot be assessed again in the course of a Block assessment and similarly, what is assessed in Block assessment, cannot be the subject matter of regular assessment. It is further submitted that Section 143(2) of the Act is in two parts.The first part deals with jurisdiction and the second with the procedure. The proviso to Section 143(2) puts an embargo on the assessing officer to exercise jurisdiction after the expiry of 12 months from the end of the month in which the return was filed by the assessee. It is the discretion of the assessing officer to accept the return as it is or to proceed further with the assessment of income, once the assessing officer decides to proceed, he has to issue notice under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of notice under Section 143(2), the same restriction would not be applicable in the case of Block assessment. 6) Per contra, the contention on behalf of the assessee(s) is that, for the purpose of Block assessment under Section 158 BC, the provisions of Section 142 and Sub-sections (2) and (3) of Section 143 are applicable and, therefore, no Block assessments could be made without issuing notice under Section 143(2) of the Act. It is further contended that notice under Section 143(2) could have been dispensed with by the assessing officer if he proceeds to determine the income on the basis of the return without going for scrutiny. Referring to the provisions in clause (v) of the Second Proviso to Section 158 BC, it is submitted by the learned counsel that the words "so far as may be" does not give any discretion to the assessing officer to dispense with the requirement of such a notice under Section 143(2), when he proceeds to make an enquiry within the scope and ambit of Section 143(2). It is further contended that after a notice under Section 158 BC is issued, the assessee is required to file a return within a stipulated period. Once the return is filed, it is open to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Block assessment. Omitting what is not necessary for the purpose of this case, clause (e) is extracted and it reads as under:- "(e) Procedure for making block assessment: (i) The Assessing Officer shall serve a notice on such person requiring him to furnish within such time, not being less than 15 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 sub-section (1) of section 142 setting forth his total income including undisclosed income for the block period. The officer shall proceed to determine the undisclosed income of the block period and the provisions of section 142, sub-sections (2) and (3) of section 143 and section 144 shall apply accordingly." 12) Chapter XIV-B provides for an assessment of the undisclosed income unearthed as a result of search without affecting the regular assessment made or to be made. Search is the sine qua non for the Block assessment. The special provisions are devised to operate in the distinct field of undisclosed income and are clearly in addition to the regular assessments covering the previous years falling in the block period. The special procedure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... An analysis of this sub section indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under Sections 143(2)/142 and complete the assessment under Section 143(3). This Section does not provide for accepting the return as provided under Section 143(i)(a). The assessing officer has to complete the assessment under Section 143(3) only. In case of default in not filing the return or not complying with the notice under Sections 143(2)/142, the assessing officer is authorized to complete the assessment ex-parte under Section 144.Clause (b) of Section 158 BC by referring to Section 143(2) and (3) would appear to imply that the provisions of Section 143(1) are excluded. But Section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) should be issued within one ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the observation made by this Court in Dr. Pratap Singh's case [1985] 155 ITR 166(SC). In this case, the Court has observed that Section 37(2) provides that "the provisions of the Code relating to searches, shall so far as may be, apply to searches directed under Section 37(2). Reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in Section 165 has to be generally followed. The expression "so far as may be" has always been construed to mean that those provisions may be generally followed to the extent possible. The learned counsel for the respondent has brought to our notice the observations made by this Court in the case of Maganlal Vs. Jaiswal Industries, Neemach and Ors., [(1989) 4 SCC 344], wherein this Court while dealing with the scope and import of the expression "as far as practicable" has stated "without anything more the expression `as far as possible' will mean that the manner provided in the code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied." 16) The case of the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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