TMI Blog2002 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... e IT Act." and submitted the same in prescribed form was wholly illegal and without jurisdiction. 3. Because the said notice dt. 28th July, 1997, under which the jurisdiction has been sought to have been assumed by the learned AO for completing the block assessment is liable to be held to have not been issued at all and the assessment order dt. 31st July, 1998, as completed thereunder is wholly illegal and without jurisdiction. 4. Because notice in question, otherwise also, cannot be said to be satisfying the provisions of s. 282 of the IT Act, 1961, and the same, therefore, cannot be held to be conferring a valid jurisdiction on the learned AO to complete the assessment for block period commencing from 1st April, 1986 to 5th July, 1996. 5. Because in any case and without prejudice to the objections taken to the inherent look, it is contended that the impugned order has been passed has the 'approval' as envisaged under s. 158BG cannot be said to have been validly given by the learned CIT, Allahabad." 2. During the course of the proceedings, the assessee has also moved the petition dt. 13th June, 2001, for admission of additional ground which reads as under: "12. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 997, issued under s. 158BC and 158BD is no notice under the law. In this notice, no status is clear and the AO has done only formality in the matter. The learned counsel for the assessee accordingly argued that the assessee filed objection before the AO in this regard but the assessee was again directed to file the return on so many status, which is not warranted under the special procedure. He has further argued that the reminder dt. 17th July, 1998, was also issued in connection with the illegal notice dt. 28th July, 1997. He has further argued that no sufficient opportunity was granted by the AO to the assessee as the assessment was framed on 31st July, 1998, and last notice and reminder was served upon the assessee on 27th July, 1998. He has further argued that the assessee had also filed objection dt. 27th July, 1998, before the Addl. CIT but the same was not dealt with. The learned counsel for the assessee further argued that search was conducted in the case of Ajai Kumar Vijai Kumar Dal Mill on 5th July, 1996, and at that time limitation to complete the assessment was one year and, as such, the assessment is barred by limitation. He has also referred to the affidavit filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A Bench, in the case of L. Saroja vs. Asstt. CIT (2001) 71 TTJ (Mad) 158. 6. In rejoinder, the learned counsel for the assessee argued that the satisfaction of the AO should be discernible before the issue of notice. The assessment order came later and cannot be relied upon. He has further argued that even the assessment order did not show that it was undisclosed income. The learned counsel for the assessee relied upon the order of the Tribunal, A Bench, Allahabad, in the matter of M/s Monga Metals (P) Ltd., Kanpur vs. Asstt. CIT ITA No. 1377/All/1997 which was decided vide order dt. 30th June, 1999, which was also followed by the Tribunal 'A' Bench, Allahabad, in the case of V.V.S. Alloys Ltd., Kanpur vs. Asstt. CIT, decided vide order dt. 30th Nov., 1999. The learned counsel for the assessee accordingly argued that the notice issued is void ab initio under the law and, therefore, the case of the assessee is squarely covered by the order of the Tribunal 'A' Bench, Allahabad, in the case of M/s Monga Metals (P) Ltd., Kanpur and the order of the Tribunal, A Bench, Allahabad, in the case of V.V.S. Alloys Ltd., Kanpur. 7. We have considered the rival submissions of the parties, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat case also. In this case also, it was submitted that the assessee was unable to understand as to in which status return was to be filed. Even it is not clear whether the AO was satisfied with regard to the issue of notice under s. 158BC or that the AO was satisfied about the undisclosed income of the assessee. The Tribunal in the case of Monga Metals (P) Ltd., Kanpur has formulated three questions for consideration on the identical facts: "(i) the first question, in our opinion, for our decision, is with respect to the nature/status of the notice required to be served under s. 158BC of the Act, i.e., is such a notice akin/analogous and within the parameter of a notice under s.148 of the Act? (ii) If so, can the points raised by the assessee's counsel amount to illegalities in the notice and consequently have they rendered the notice illegal, bad in law and vague? (iii) If the notice is found to be vague, can the assessment for block period be quashed as a nullity? The Tribunal, after considering various provisions of the assessment under the law as well as the special procedure under Chapter XIV-B on the identical facts came to the conclusion that the notice required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the applicability of the provisions of ss. 158BC and 158BD in his case, while the Department has not rectified the mistake and rather issued the reminder dt. 17th July, 1998, in which also nothing is mentioned about the objections raised by the assessee. However, during the course of arguments, the learned Departmental Representative precisely stated that the notice may be defective, which also supports our view that the notice in this case is also defective, vague and illegal and cannot be said to be a valid notice as required under the provisions of s. 158BC. Since the AO has assumed the jurisdiction in consequence upon the notice dt. 28th July, 1997, which is invalid and vague, therefore, the assumption of jurisdiction on the basis of such notice is also bad in law and void ab initio. 10. The next primary issue, which is sought to be raised by the parties is that whether the AO was satisfied as required under s. 158BD before initiating the proceeding under s. 158BD. We had an occasion to deal with this point of law in the matter of Vishwanath Prasad Ashok Kumar Sarraf, Varanasi vide order dt. 29th Aug., 2002, on similar facts. Certain important points were noticed by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that AO having jurisdiction over such other person shall proceed against such other person under s. 158BD to determine the undisclosed income by following the procedure provided. Therefore, the crux of the difference between these two provisions under Chapter XIV-B is that for assessment under s. 158BC, the AO is not required to record his satisfaction before proceeding to determine the undisclosed income in respect of block period. However, in the case of s. 158BD, the AO who had been handed over the seized material, documents and assets, etc. by the search party will have to satisfy himself that any undisclosed income belongs to any person other than the person searched under s. 132 or whose books of account or documents were requisitioned under s. 132A of the IT Act. Therefore, though it is not provided under the Act what satisfaction is to be recorded by the AO but the Act clearly provides that before proceedings under s. 158BD the AO who received the seized material and documents from the search party shall have to be satisfied that any undisclosed income belongs to any person other than the person searched. The difference is created in these two provisions of law under the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned Departmental Representative was directed to show the material available on the assessment record if any satisfaction was arrived at by the AO that any undisclosed income belongs to such person other than the person who is searched under s. 132. However, the learned Departmental Representative could not point out any material from which it can be discernible that the AO was satisfied about the conditions laid down under s. 158BD before issuing the notice dt. 28th July, 1997. We have decided with regard to the validity of the notice above and we have held that the notice dt. 28th July, 1997, had not been validly issued. Also, we have held that the same is void ab initio and bad in law and, therefore, the entire proceedings are vitiated. However, the learned Departmental Representative mainly argued that this notice was addressed to the individual and, therefore, status could be presumed though he has stated that there may be defect in the notice. Since the notice itself is defective and, therefore, it could not be presumed that the AO was satisfied about the undisclosed income before issuing the notice. The learned Departmental Representative further argued that from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
