ANANDI KAUSHIK LAIJAWALA,MUMBAI V. DDIT (INV.) UNIT 6(4), MUMBAI

BMA 2/MUM/2022

AI Insights

The case involves appeals by Smt. Anandi Kaushik Laijawala and Mr. Kaushik Gokuldas Laijawala against the orders passed by the CIT(A)-51, Mumbai under the BMIT Act for the assessment year 2018-19. The primary legal contention was the validity of the notice issued for the assessment year 2018-19, which was argued to be based on a notice issued for the assessment year 2017-18. The tribunal examined the sequence and validity of the notices issued under section 10(1) of the BMIT Act and found that the necessary legal procedures were not followed, leading to the decision in favor of the assessees.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471311 (ITAT-MUMBAI)
• Appeal Type: Black Money Appeal
• Pronouncement Date: 14-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Other Referred Cases: CIT vs. Norton Motors, Infineon Technologies AG vs. DCIT, CIT vs. Kurban Hussain Ibrahimji Mithiborwala, SSS Projects Ltd vs. DCIT
• Laws Referred To: The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWANATH DAS
• Assessee Lawyers: V. CHANDRASEKHAR AW
• Keywords: Opportunity of being heard; Fair market value; Reopening of assessment; Principle of natural justice; Double taxation relief; Residential status; Audi alteram partem
• Section: 153C; 10; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “E” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER BMA No. A.Y. Appellant Respondent 2/Mum/2022 2018-19 Smt. Anandi Kaushik Laijawala, 121, Vallabh Apartments, 87, Bhulabhai Desai Road, Mumbai PAN: AAZPL2423K Dy. Director of Income Tax (Inv.), Unit-6(4), Mumbai 3/Mum/2022 2018-19 Mr. Kaushik Gokuldas Laijawala, 121, Vallabh Apartments, 87, Bhulabhai Desai Road, Mumbai PAN: AAAPL2665C Assessee by : Shri V. Chandrasekhar a/w. Shri Nishit Gandhi / Shri Harshad Shah Revenue by : Shri Biswanath Das, CIT-DR Date of Hearing : 29-11-2024 Date of Pronouncement : 14-02-2025 O R D E R PER B.R. BASKARAN, A.M : Both the appeals filed by the respective assessees are directed against the orders passed by the Ld CIT(A)-51, Mumbai u/s.15(1) r.w.s. 17 of The Black Money (undisclosed foreign income and assets) and Imposition of Tax Act, 2015 (hereinafter referred to as “BMIT Act”) in their respective hands for 2 BMA Nos. 2 & 3/Mum/2022 the Assessment Year (AY.) 2018-19. The additions made in the hands of both the assessees are identical in nature and further they arise out of common set of facts. Accordingly, both the appeals were heard together and are being disposed of by this common order, for the sake of convenience. 2. Though both the assessees have raised many grounds, we heard the parties on the following legal ground only:- “The assessment order for the A.Y 2018-19 is based on a notice issued u/s 10(1) for the A Y 2017-18. Thus the assessment order for the A.Y 2018-19 is bad in law as the same is passed without a valid notice being issued for the A Y 2018-19.” 3. The common facts relating to the case are discussed in brief.Smt Anandi Kaushik Laijawala is the wife of Shri Kaushik Gokaldas Laijawala. The assessing officer received information that both the assessees herein, viz., Smt Anandi Kaushik Laijawala and Shri Kaushik Gokaldas Laijawala are beneficial owners and beneficiaries in an arrangement consisting of an off-shore private trust named “Vanaka Trust” and also an off-shore Company named “Vanaka Group Limited”. The Vanaka Trust is a Guernsey based entity while the company Vanaka Group Limited is a British Virgin Islands based entity. It was noticed that both the assessees herein are settlers of the above said trust. The beneficiaries of the trust are both the assessees herein, their son Shri Aditya Kaushik Laijawala (born on 24 July 1998) and their daughter Ms Vipsasha Kaushik Laijawala (bron on 20 March 1994). All of them are residents of India except for Ms Vipasha Laijawala who was resident of India prior to AY 2018- 19.Both these entities were having substantial assets in foreign jurisdictions. 3.1. The above said trust was settled on 31st May, 2012 and M/s Standard Chartered Trust (Guernsey) Limited was appointed as Trustee. The asset of the Trust stood at USD 9,514,676 as on 31-03-2016, which also included 100 shares of the company M/s Vanaka Group Limited. 3 BMA Nos. 2 & 3/Mum/2022 3.2. The AO noticed that the share capital of M/s Vanaka Group Limited stood at 100 shares and the entire shareholding, as noticed earlier, is held by Vanaka Trust only. The AO noticed that the above said Company M/s Vanaka Group Limited has shown retained profit of USD 2,20,274/- as on 31.3.2017. He further noticed that both the assessees herein did not disclose the investment of USD 9,514,676 and the retained profit income of USD 2,20,274 in Schedule FA of the Income tax returns filed by them in any of the assessment years. 3.3. Accordingly, the AO initiated proceedings u/s BMIT Act. After hearing the assessee, the AO held that the entire amount of USD 9,735,050 (9,514,676 (+) 2,20,274) is assessable under BMA Act in the hands of both the assessees herein. Adopting the conversion rate of Rs.64.8386, the AO determined the value of undisclosed foreign income and asset at Rs.63,12,00,520/-. The AO assessed 50% of the above said amount on substantive basis and remaining 50% on protective basis in the hands of both the assessees in AY 2018-19. 3.4 As noticed earlier, the assessee has raised a legal issue mentioned above contending that the assessment order has been passed without a valid notice. We notice that the assessing officer has issued more than one notice u/s 10(1) of the Act. Hence, in order to appreciate the legal contention urged by the assessee, it is necessary to list out the notices issued by the AO u/s 10(1) of the Act. The details of notices issued by the AO are mentioned chronologically hereunder:- (a) The first notice u/s 10(1) of the BMIT Act was issued by the AO (DDIT (Inv.)-Unit-6(4)) on 07-08-2017 for assessment year 2017-18. (b) The second notice u/s 10(1) of the BMIT Act was issued by the very same AO on 27-04-2018 for assessment year 2018-19. 4 BMA Nos. 2 & 3/Mum/2022 (c) In the meantime, there was change in the office of DDIT (Inv.-Unit 6(4) and hence the new incumbent issued another notice u/s 10(1) on 10-07- 2018 for assessment year 2018-19 as per the requirement of sec.7 of BMIT Act. (d) The new incumbent officer again issued another notice u/s 10(1) of the Act on 09-11-2018 and did not mention any assessment year in that notice. (e) The new incumbent officer also issued a corrigendum dated 31.07.2018, wherein it is mentioned that the notice issued u/s 10(1) of the Act issued on 7th August 2018 refers to the previous year 2016-17 and the assessment year as 2017-18, but they should be read as previous year 2017-18 and assessment year 2018-19. The assessing officer has finally passed the assessment order for assessment year 2018-19. 4. The assessee raised before Ld CIT(A) the above said legal issue contending that the AO did not issue any valid notice for AY 2018-19. However, the Ld CIT(A) held that the notice dated 27-04-2018 is the valid notice and accordingly held that the assessment order was rightly passed for AY 2018-19. The decision so rendered by Ld CIT(A) are extracted below:- “5.28 On this issue, the action of the Assessing Officer in moving to issue a new notice under section 10(1) of the Act on 27-04-2018 for AY 2018-19 is found to be correct as he came in possession of the information only in previous year 2017-18. The para 19 of the new notice effectively withdraws the earlier notice issued on 07-08-2017 and rightly so. The notice under section 10(1) under BMIT Act for AY 2017-18 was infructuous as no information had come to the notice of the Assessing Officer in PY 2016-17.” 5 BMA Nos. 2 & 3/Mum/2022 It can be noticed that the Ld CIT(A) has held that the notice dated 07-08-2017 issued u/s 10(1) of the Act has been withdrawn by the AO. It is pertinent to note that the revenue has not challenged this observation of the Ld CIT(A), meaning thereby, the above said fact has attained finality. 5. We heard the parties on the above said legal issue. We have noticed earlier that the assessing officer has issued more than one notice u/s 10(1) of the Act. The contention of the assessee is that the AO has not issued a valid notice for initiating assessment proceedings for assessment for AY 2018-19 and hence the assessment order passed by him for that year is not valid. 5.1. Before proceeding to discuss about the facts relating to the above said legal issue, we shall extract the relevant provisions of BMIT Act, which governs the issue of notices. Charge of tax. 3. (1) There shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent of such undisclosed income and asset: Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. (2) For the purposes of this section \"value of an undisclosed asset\" means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed. Assessment. 10. (1) For the purposes of making an assessment or reassessment under this Act, the Assessing Officer may, on receipt of an information from an income-tax authority under the Income-tax Act or any other authority under any law for the time being in force or on coming of any information to his notice, serve on any person, a notice requiring him on a date to be specified to produce or cause to be produced such accounts or documents or evidence as the Assessing Officer may require for the purposes of this Act and may, from time to time, serve further notices requiring the production of such other accounts or documents or evidence as he may require. 6 BMA Nos. 2 & 3/Mum/2022 (2) The Assessing Officer may make such inquiry, as he considers necessary, for the purpose of obtaining full information in respect of undisclosed foreign income and asset of any person for the relevant financial year or years. (3) The Assessing Officer, after considering such accounts, documents or evidence, as he has obtained under sub-section (1), and after taking into account any relevant material which he has gathered under sub-section (2) and any other evidence produced by the assessee, shall by an order in writing, assess 3[or reassess] the undisclosed foreign income and asset and determine the sum payable by the assessee. (4) If any person fails to comply with all the terms of the notice under sub- section (1), the Assessing Officer shall, after taking into account all the relevant material which he has gathered and after giving the assessee an opportunity of being heard, make the assessment 3[or reassessment] of undisclosed foreign income and asset to the best of his judgment and determine the sum payable by the assessee. Removal of doubts. 72. For the removal of doubts, it is hereby declared that— (a) save as otherwise expressly provided in the Explanation to sub- section (1) of section 69, nothing contained in this Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration under this Chapter; (b) where any declaration has been made under section 59 but no tax and penalty has been paid within the time specified under section 60 and section 61, the value of such asset shall be chargeable to tax under this Act in the previous year in which such declaration is made; (c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly. The terms “Previous year” is defined under sec.2(9) of the BMIT Act and the terms “assessment year” is defined in sec.2(4) of the Act. Sec. 2(15) states that „all other words and expressions used herein but not defined and defined in the Income tax Act shall have the meanings respectively assigned to them in that Act.‟ 7 BMA Nos. 2 & 3/Mum/2022 5.2. It is pertinent to note that the BMIT Act, 2015 initially came into force w.e.f 1.4.2016, vide section 1(3) of the Act. However, the date 1.4.2016 was substituted with“01-04-2015” by the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act (Removal of Difficulties) order, 2015.The BMIT Act contained a provision to voluntarily disclose the foreign assets, Hence, the objective of advancing the implementation of the Act was to enable the assessees to voluntary disclose the foreign assets as per the scheme framed u/s 59 in Chapter VI of the BMIT Act and pay due taxes thereon. Obviously, the scheme was made applicable to those undisclosed assets that were acquired prior to the commencement of the BMIT Act and also hitherto unknown to the revenue/Central Government. This legal position is made clear by the Circular No.13/2015 dated 6th July, 2015 issued by CBDT, wherein several possible questions have been answered by the CBDT. Following questions clarify this legal position:- Question No.6: Where a notice under section 142/ 143(2)/ 148/ 153A/ 153C of the Income-tax Act has been issued to a person for an assessment year will he be ineligible from voluntary declaration under section 59 of the Act? Answer: The person will only be ineligible from declaration of those foreign assets which have been acquired during the year for which a notice under section 142/ 143(2)/ 148/ 153A/ 153C is issued and the proceeding is pending before the Assessing Officer. He is free to declare other foreign assets which have been acquired during other years for which no notice under above referred sections have been issued. Question No.12: Whether a person is barred from voluntary declaration under Chapter VI of the Act if any information has been received by the Government under DTAA? Answer: As per section 71(d)(iii), the person cannot make a declaration of an undisclosed foreign asset where the Central Government has received 8 BMA Nos. 2 & 3/Mum/2022 an information in respect of such asset under the DTAA. The person is entitled for voluntary declaration in respect of other undisclosed foreign assets for which no information has been received. Question No.15: If a declaration of undisclosed foreign asset is made under Chapter VI of the Act and the same was found ineligible due to the reason that Government had prior information under DTAA then will the person be liable for consequences under the Act? Answer:In respect of such assets which have been duly declared in good faith under the tax compliance but not found eligible, he shall not be hit by section 72(c) of the Act and no action lies in respect of such assets under the Act. However, such information may be used for the purpose of the Income-tax Act. 5.3. On a careful perusal of the above said provisions, in our view, following legal position would emerge. (a) As per the proviso to sec.3 of the BMIT Act, undisclosed asset located outside India shall be charged to tax on “its value in the previous year in which such asset comes to the notice of the Assessing Officer.” As per Sec.3(2), the “value of an undisclosed asset” means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed. Hence what is assessable in respect of the undisclosed asset is the fair market value determined in the manner prescribed under the BMIT Act and Rules. It appears that the actual cost incurred by the assessee may not be relevant for the purpose of assessment u/s 3(1) of the BMIT Act. (b) As per sec. 3(1) of BMIT Act, the tax shall be levied on every assessee in every assessment year. Hence, the assessment under BMIT Act is also assessment year specific, as in the case of Income tax Act. (c) As per the provisions of sec.10(1) of BMIT Act, the AO „may‟ serve a notice under that section to the assessee, requiring him to produce or cause to 9 BMA Nos. 2 & 3/Mum/2022 be produced such accounts or documents or evidence as the AO may require for the purposes of this Act and may, from to time, serve further notices requiring the production of such other accounts or documents or evidence as he may require for the purpose of making an assessment or reassessment. After making due enquires u/s.10(2), the AO shall pass an order of assessment u/s.10(3) of the Act. (d) It is pertinent to note that the provisions of sec 10(1) of the BMIT Act uses the expression “may serve on any person a notice”. It is a common understanding that the word “may” will also include “may not”. Hence, it is possible to argue that it is not mandatory to issue notice to the assessee u/s 10(1) of the Act. In our view, it may not be right interpretation for the simple reason that the AO cannot raise a tax liability upon any assessee, unless he is given opportunity of being heard as per the mandatory requirements of the Doctrine of Audi Alteram Partem under Principles of Natural Justice. (e) The above said view of ours would also get support from the provisions of sec.72(c) of the BMIT Act. We noticed that, for voluntary disclosure of the undisclosed foreign assets acquired prior to the commencement of the BMIT Act, separate provisions have been incorporated under Chapter VI of the Act titled as “Tax compliance for undisclosed foreign income and assets”. However, if any assessee fails to disclose the same under the scheme prescribed in chapter VI of the Act, then those assets are assessable under the BMIT Act. In this regard, a deeming fiction has been introduced under sec.72(c) of the Act, which reads as under:- “(c) where any asset has been acquired or made prior to commencement of this Act, and no declaration in respect of such asset is made under this Chapter, such asset shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly.” 10 BMA Nos. 2 & 3/Mum/2022 Hence, in respect of undisclosed foreign assets acquired or made prior to the commencement of the Act and if no declaration has been made under Chapter VI, such asset shall be deemed to have been acquired or made in the year in which a notice under sec.10 is issued by the assessing officer. This deeming fiction would show that it is mandatory to issue notice u/s 10(1) of the Act in respect of undisclosed assets acquired prior to the commencement of the Act and which was not voluntarily declared, since the date of acquisition of that asset shall be deemed to be the year in which notice u/s 10 was issued. 5.4 We notice that the legal effect of provisions of sec.72(c) of the BMIT has been explained by the CBDT in Circular No.13 of 2015 dated 6th July, 2015 and the said Circular was issued in the context of Chapter VI of BMIT Act with regard to the tax compliance scheme by Central Board of Direct Taxes (CBDT). Following question and answer thereto clarifies the legal position:- Question No.14: What are the consequences if no declaration under Chapter VI of the Act is made in respect of undisclosed foreign assets acquired prior to the commencement of the Act? Answer: As per section 72(c), where any asset has been acquired prior to the commencement of the Act and no declaration under Chapter VI of the Act is made then such asset shall be deemed to have been acquired in the year in which it comes to the notice of the Assessing Officer and the provisions of the Act shall apply accordingly. India is expected to start receiving information through Automatic Exchange of Information (AEOI) route under FATCA from USA later in the year 2015. Further, under the multilateral agreement India will start receiving information from other countries under AEOI route from 2017 onwards. As at 18th March 2015, 58 jurisdictions (including India) have committed to share information under AEOI by 2017 and 36 jurisdictions have committed to share by 2018, including jurisdictions which have beneficial tax regime. The multilateral agreement is expected to cover all the countries in the near future. The information under the AEOI will include information of controlling persons (beneficial owners) of the asset. The possibility of discovery of an undisclosed asset may arise at any time in the future; say for example, information of an immovable property can be unearthed if any utility bills/property tax or even gardener’s/ caretaker’s salary has been paid through an existing or closed bank account. Therefore, if any information of an undisclosed foreign asset acquired earlier, say in the year 1975, for $ 100,000 comes to the notice of an Assessing Officer later, say in the year 2020, when its value becomes, 11 BMA Nos. 2 & 3/Mum/2022 say, $ 5 Million, the liability under the Act amounting to 120 percent of the fair market value of the asset on the valuation date may arise in the year 2020, besides prosecution and other consequences. In this case if the valuation date is in the year 2020 the amount of tax and penalty under the Act will be $ 6 Million.” 6. In the instant cases, the impugned foreign assets have been acquired by both the assessees prior to the commencement of the BMIT Act and further they have also not filed any declaration u/s 59 of the Act voluntarily. Hence the deeming provisions mentioned in sec.72(c) of BMIT Act shall apply to the facts of the present cases. Accordingly, the “assessment year” for assessing those foreign assets would have to be determined on the basis of date of notice issued by the AO u/s 10(1) of the Act. We noticed earlier that the proviso to sec.3(1) of the BMIT Act stated that the undisclosed asset located outside India shall be charged to tax on “its value in the previous year in which asset comes to the notice of the Assessing officer”. A interplay between the proviso to sec.3(1) and sec. 72(c) in respect of assets acquired or made prior to the commencement of Act and which has also not been declared u/s 59 of the Act, may be explained as under:- (a) the determination of value of the undisclosed asset located outside India is one thing and assessing the said value under BMIT Act is another thing. (b) While the value of the undisclosed asset will be determined on the basis of its value prevailing in the previous year in which such asset comes to the notice of the assessing officer, the same will be assessed in the hands of the assessee only in the assessment year, which is determined in terms of sec.72(c) of the Act. 7. With the above said understanding of legal provisions of BMIT Act, we shall now turn to the facts of the present case with regard to the various notices issued by the AO. 12 BMA Nos. 2 & 3/Mum/2022 8. The first notice was issued by the AO u/s 10(1) of the Act on 07-08-2017 for Assessment year 2017-18. The initial portion of the said notice reads as under:- “WHEREAS information has come to my notice during the previous year 2016-17 relevant to the assessment year 2017-18, that you have “Undisclosed asset located outside India”, this notice is issued to you under subsection (1) of section 10 of the The Black Money (Undisclosed income and Assets) and Imposition of Tax Act, 2015 (hereinafter referred to as The BM(UFI&A) & IT Act) by me as Assessing Officer in exercise of powers conferred under section 6 of the BM(UFI&A) & IT Act.” It can be noticed that the AO has initiated proceedings for assessment year 2017-18 only under this notice. However, no assessment order has been framed by the AO for assessment year 2017-18 in the hands of both the assessees. On the contrary, the AO has passed the present assessment orders in the hands of both the assessees herein for assessment year 2018-19. At this stage, it would be relevant to refer to the decision rendered by Ld CIT(A) in respect of this notice issued on 07-08-2017. The same is reproduced below at the cost of repetition:- “5.28 On this issue, the action of the Assessing Officer in moving to issue a new notice under section 10(1) of the Act on 27-04-2018 for AY 2018-19 is found to be correct as he came in possession of the information only in previous year 2017-18. The para 19 of the new notice effectively withdraws the earlier notice issued on 07-08-2017 and rightly so. The notice under section 10(1) under BMIT Act for AY 2017-18 was infructuous as no information had come to the notice of the Assessing Officer in PY 2016-17.” It can be noticed that the Ld CIT(A) has also expressed the view that the notice dated 07-08-2017 has been effectively and rightly withdrawn by the AO. This decision of Ld CIT(A) has attained finality, since the revenue has not challenged the above said decision of Ld CIT(A). At this stage, it is pertinent to note that the AO has observed as under in Page 86 of the assessment order:- “The value of undisclosed asset located outside India has been determined as on 01 April 2017 as this office has assumed the jurisdiction under The 13 BMA Nos. 2 & 3/Mum/2022 BM(UFI&A)&IT Act on 12 July 2017 and the first notice u/s 10(1) has been issued on 07 August 2017, i.e during FY 2017-18.” The above said observation of the AO is contrary to the observations made in the notice issued on 07th August 2017, which we had extracted earlier. In any case, the notice dated 07-08-2017 cannot be taken cognizance of for two reasons, viz., firstly, it was issued for assessment year 2017-18, which is not the year under consideration and secondly, the Ld CIT(A) has held that the above said notice has been withdrawn by the AO and the said decision remained unchallenged. Thirdly, the AO had in fact issued another notice on 27-04-2018 on re- appreciation of facts, meaning thereby, the AO has taken a conscious decision to issue another notice on 27-04-2018 ignoring the earlier notice. Accordingly, we are of the view that the Ld CIT(A) has rightly held that the earlier notice dated 07-08-2017 has been withdrawn by the AO. Accordingly, we are of the view that the revenue cannot rely upon the notice dated 07-08-2017 in order to contend that the assessing officer has acquired jurisdiction for assessing the undisclosed asset for assessment year 2018-19. 9. Before considering the other notices issued by the AO u/s 10(1) of the Act, we may now refer to the corrigendum dated 31-07-2018 issued by the AO, which is apparently with reference to the notice issued on 07-08-2017. A perusal of the said notice would show that the assessing officer has wrongly mentioned the date of notice as 07th August 2018 instead of 07th August 2017. In the corrigendum, it is stated as under:- “2. Please note that in Paragraph 1 of the said notice, the previous year reads as 2016-17 and assessment year reads as 2017-18. You are informed that in respect of the said notice, the previous year shall be read instead as 2017-18 while the assessment year shall be read instead as 2018-19.” 14 BMA Nos. 2 & 3/Mum/2022 There should not be any dispute that a notice u/s 10(1) of the Act is issued in order to acquire jurisdiction for making assessment in the hands of the assessee u/s 10(3). In the instant case, we have held that the provisions of sec.10(1) have to be read along with of sec.72(c) also. Accordingly, we have held that, in the facts of the present cases, issuing of notice u/s 10(1) is mandatory. Hence, the AO has to acquire jurisdiction to assess the undisclosed asset by issuing a valid notice. Accordingly, without acquiring proper jurisdiction, the AO cannot acquire jurisdiction and pass any assessment order. 9.1. The question that arises is whether the AO can modify the “assessment year” in the notice issued u/s 10(1) in order to acquire jurisdiction. It was contended by the Ld DR that the provisions of sec.81 of BMIT Act, which is akin to sec.292B of the Income tax Act, will protect the validity of notice, since mentioning of wrong previous year and assessment year was a mistake, defect or omission in the notice, which could be . However, the above said contention of the Ld DR is contrary to the decision rendered by Hon‟ble High Courts in the following cases:- (i) CIT vs. Norton Motors (2005)(146 Taxman 701)(P & H). In this case, it was held that the provisions of sec.292B of Income tax Act can be relied upon for resisting a challenge to notice etc., only if there is a technical defect or omission in it. If the notice etc., issued by an authority suffers from an inherent lacuna affecting his/its jurisdiction, same cannot be cured by having resort to section 292B of the Income tax Act. (ii) Infineon Technologies AG vs. DCIT (2022)(141 taxmann.com 288)(Kar). In this case, the AO issued notice for AY 2015-16. Subsequently, by a corrigendum dated 11.4.2017, he modified the assessment year as 2010-11. The Hon‟ble Karnataka High Court held 15 BMA Nos. 2 & 3/Mum/2022 that the said corrigendum could not be said to have cured a procedural irregularity as contemplated u/s 292B and jurisdiction to reopen assessment for AY 2010-11. In this case, one additional legal point available was that, by the time the corrigendum was issued, the reopening of assessment for AY 2010-11 was time barred. (iii) CIT vs. Kurban Hussain Ibrahimji Mithiborwala (1971)(82 ITR 821)(SC). In this case, the notice u/s 22(2) of the Income tax Act, 1922 was issued for AY 1949-50. However, the notice u/s 34 of that Act was issued for AY 1948-49. Even though the assessee pointed out this discrepancy, the AO proceeded to complete the assessment for AY 1949- 50. The Hon‟ble SC held that notice in question was invalid and as such the ITO had no jurisdiction to revise the assessment for year 1949-50. (iv) In the case of SSS Projects Ltd vs. DCIT (129 Taxmann.com 378)(kar), the Hon‟ble Karnataka High Court has clarified that only clerical errors or accidental omissions can be protected under Section 292B. It can be noticed that all these case laws lay down the law that the protection afforded by sec. 81 of BMIT Act/ 292B of Income tax Act does not extend to substantive issues or fundamental flaws in the proceedings. Accordingly, the above said contentions of Ld DR are liable to be rejected. Accordingly, the corrigendum issued by the AO cannot be recognized. Even otherwise, we noticed earlier that the Ld CIT(A) has clearly held that the notice issued on 07- 08-2017 has been rightly and effectively withdrawn by the AO. In that case, the AO could not have issued a corrigendum on a notice, which has already been withdrawn by him. 10. The next notice issued by the AO u/s 10(1) of the Act is the notice dated 27-04-2018 issued for AY 2018-19. The Ld CIT(A) has also held that this is the notice, which has given jurisdiction to the AO to assess the undisclosed assets 16 BMA Nos. 2 & 3/Mum/2022 for AY 2018-19. In this notice, the AO has clearly stated that the earlier notice dated 07-08-2017 was issued incorrectly for AY 2017-18 and hence he is issuing the fresh notice dated 27-04-2018 for AY 2018-19. 10.1. We notice that the notice dated 27-04-2018 is issued for AY 2018-19 and the same is contrary to the provisions of sec.72(c) of the BMIT Act. We noticed that section 72(c) is a deeming provision as per which the undisclosed assets are deemed to have been acquired during the previous year in which such notice is issued. Since the second notice is issued on 27-04-2019, the impugned undisclosed assets are deemed to have been acquired during the previous year 2018-19 and accordingly they have to be assessed in assessment year AY 2019-20 only. Hence the AO could not have passed the assessment order for AY 2018-19 on the strength of notice dated 27-04-2018. Accordingly, the said notice would not also validate the assessment order passed for AY 2018-19. 11. We noticed that the AO has also issued two more notices u/s 10(1) of the Act, viz., on 10-07-2018 and 09-11-2018. On the strength of those notices, the AO could have framed assessment order for AY 2019-20 only in view of the deeming fiction enshrined in sec.72(c) of the Act and not for AY 2018-19. 12. The foregoing discussions would show that the assessing officer did not acquire jurisdiction in accordance with law for assessing the undisclosed assets and income in Assessment year 2018-19 by issuing a valid notice. In the absence of a valid notice issued for the impugned assessment year, we have to quash the orders passed by the tax authorities in the hands of both the assessees herein. We order accordingly. 17 BMA Nos. 2 & 3/Mum/2022 13. Since we have quashed the orders on the legal issue relating to jurisdiction, there is no necessity to adjudicate other grounds urged by the assessee and accordingly, they are left open. 14. In the result, the appeals of both the assessees are allowed. Order pronounced in the open court on 14-02-2025 Sd/- Sd/- [SUNIL KUMAR SINGH] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 14-02-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "