Ande Sri Rama Murthy, Mangalagiri V. The Assistant Commissioner of Income Tax, Circle-2(1), , Guntur

CO 70/VIZ/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0245 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 17-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D.K.SONOWAL
• Keywords: Capital asset; Procedural lapse; Competent authority; Block assessment; Reassessment proceedings; Set aside
• Section: 145; 148; 144; 139; 143(3); 142(1); 143(1); 201; 292BB; 143(2); 153

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 237 / VIZ/201 9 ( / A SSESSMENT Y EAR : 201 6 - 1 7 ) ASST. COMMISSIONER OF INCOME TAX CIRCLE - 2(1) GUNTUR VS. SRI ANDE SRI RAMA MURTHY SL/O MANGAIAH, 10 - 221 A NEAR KALYANA MANDAPAM MANGALAGIRI [PAN :ABSPA6305P] ( / APPELLANT) ( / RESPONDENT) CROSS OBJECTION NO.70/VIZ/2019 (ARISING OUT OF I.T. A.NO. 237/VIZ/2019) ( / ASSESSMENT Y EAR : 2016 - 17) SRI ANDE SRI RAMA MURTHY SL/O MANGAIAH, 10 - 221 A NEARKALYANA MANDAPAM MANGALAGIRI [PAN :ABSPA6305P] VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE - 2(1) GUNTUR /REVENUE BY : SHRI D.K.SONOWAL, CIT DR / ASSESSEE BY : SHRI G.V.N.HARI, AR / DATE OF HEARING : 1 2 . 12. 201 9 / DATE OF PRONOUNCEMENT : 31 .12. 201 9 2 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEAL] - 1, GUNTUR IN APPEAL NO.17/2017 - 18 DATED 19 . 02 .201 9 AND CROSS OBJECTIONS ARE FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR (A.Y.) 2016 - 17. 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE VALIDITY OF ISS UE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). FOR THE A.Y.2016 - 17, THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME. THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAD ENTERED INTO JOINT DEVELOPMENT AGREEMENT (JDA) VIDE DOCUMENT NO.16218/2015 OF SRO, MANGALAGIRI ON 04.12.2014 WITH M/S GOOD LIFE HOMES, VIJAYAWADA FOR CONSTRUCTION OF 70 RESIDENTIAL FLATS IN THE RATIO OF 47.34% (33 FLATS) TO LAND LORDS SHARE AND 52.66% (37 FLATS) TO BUILDERS SHARE. AS PER THE AGREEMENT, THE ASSESSE E HAS TRANSFERRED HIS SHARE OF LAND ADMEASURING 2089.90 SQ.YARDS TO THE BUILDER. SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME, THE AO HAD ISSUED THE NOTICE U/S 148 ON 15.02.2017 WHICH WAS SERVED ON THE ASSESSEE ON 16.02.2017. IN RESPONSE TO THE NOTICE ISSUED U/S 148, THE ASSESSEE HAS UPLOADED THE RETURN OF INCOME ON 03.04.2017 ONLINE ADMITTING TOTAL INCOME 3 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI OF RS.3,91,230/ - IN THE E - FILING WEBSITE OF INCOME TAX DEPARTMENT. AFTERWARDS NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE ON 10.04.2017 AND DULY SERVED ON THE ASSESSEE ON 12.04.2017. THE RETURN FILED BY THE ASSESSEE ON 03.04.2017 WAS NOT ACCEPTED BY THE INCOME TAX DEPARTMENT, SINCE, THE ASSESSEE HAS FAILED TO FURNISH SIGNED ITR V TO CPC BANGALORE OR E - VERIFIED THE RETURN FILED. SUBSEQUENTLY, THE ASSESSEE HAS FILED ANOTHER RETURN OF INCOME ON 27.06.2017 FOR THE A.Y.2016 - 17 ADMITTING TOTAL INCOME OF RS.34,45,890/ - WHICH WAS ACCEPTED BY THE DEPARTMENT. THE AO COMPLETED THE ASSESSMENT U/S 143(3) ON TOTAL INCOME OF RS.3,93,00,159/ - . IN THE ASSESS MENT ORDER, THE AO HAS TAKEN THE ASSESSEES SHARE OF LAND AS WELL AS THE SHARE OF RIGHT TO RECEIVE 33 FLATS AS CONSIDERATION FOR TRANSFER OF LAND TO THE BUILDER. ACCORDINGLY COMPLETED THE ASSESSMENT ON TOTAL INCOME OF RS.3,93,00,159/ - . 3. AGAINST THE OR DER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND CHALLENGED THE ORDER OF THE AO STATING THAT THERE WAS NO NOTICE ISSUED U/S 143(2) BY THE AO, HENCE , ARGUED THAT THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 WAS INVALID. THE LD.CIT(A) CONSIDER ED THE SUBMISSION MADE BY THE ASSESSEE AND HELD THAT THE ASSESSMENT MADE U/S 143(3) AS INVALID AND ACCORDINGLY ALLOWED THE APPEAL OF THE ASSESSEE. 4 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI 4. AGAINST WHICH THE DEPARTMENT HAS FILED APPEAL BEFORE US . DURING THE APPEAL HEARING, THE LD.DR SUBMITTED T HAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ORIGINALLY ON 03.04.2017. SUBSEQUENTLY, THE AO HAD ISSUED THE NOTICE U/S 143(2), SINCE, THE ASSESSEE HIMSELF HAS REQUESTED THE AO TO TREAT THE ORIGINAL RETURN FILED IN RESPONSE TO THE NOTICE U/S 148, AS RETU RN IN RESPONSE TO THE NOTICE, THE NOTICE ISSUED U/S 143(2) REQUIRED TO BE HELD AS VALID AND ARGUED THAT THE AO HAS RIGHTLY ASSUMED JURISDICTION . T HE LD.CIT(A) ALLOWED THE APPEAL PLACING RELIANCE ON HONBLE SUPREME COURTS DECISION IN THE CASE OF HOTEL BLUE MOON 321 ITR 362 (SC) WHICH IS NOT APPLICABLE IN THE ASSESSEES CASE. ACCORDINGLY ARGUED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND UPHOLD THE VALIDITY OF ISSUE OF NOTICE U/S 143(2) AND REQUESTED TO REMIT THE MATTER BACK TO THE FILE OF LD.CIT(A) TO DECI DE THE ISSUE ON MERITS. 5. ON THE OTHER HAND, THE LD.AR SUBMITTED THAT IN THE INSTANT CASE, NOTICE U/S 148 WAS ISSUED ON 15.02.2017, IN RESPONSE TO WHICH THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 03.04.2017 ADMITTING TOTAL INCOME OF RS.3,91,230/ - . SUBSEQUENTLY THE AO HAD ISSUED THE NOTICE U/S 143(2) ON 10.04.2017 IN RESPECT OF THE RETURN FILED ON 03.04.2017. SINCE THE DEPARTMENT HAS TREATED THE RETURN AS INVALID, TH E ENTIRE ASSESSMENT 5 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI PROCEEDINGS RELATING TO THE RETURN OF INCOME FILED ON 03.04.2017 BECOMES INFRUCTUOUS, THUS ARGUED THAT THE SAME CANNOT BE TAKEN AS VALID PROCEEDINGS . THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED THE SECOND RETURN OF INCOME O N 27.06.2017 ADMITTING TOTAL INCOME OF RS.34,45,890/ - WHICH WAS NOT TAKEN FOR ASSESSMENT. NOTICE ISSUED IN RESPECT OF INVALID RETURN CANNOT BE TAKEN COGNIZANCE AND SEPARATE NOTICE REQUIRED TO BE ISSUED FOR INITIATION OF ASSESSMENT PROCEEDINGS IN RESPONSE TO THE RETURN FILED. THEREFORE, SUBMITTED THAT THE AO HAS TO ISSUE FRESH NOTICE ON VALID RETURN. IN THE ABSENCE OF FRESH NOTICE SUBSEQUENT TO FILING THE VALID RETURN, THE AO IS NOT PERMITTED TO TAKE UP THE ASSESSMENT AS PROVIDED U/S 143(2) OF THE ACT. TH E ISSUE OF NOTICE U/S 143(2) PRE SUPPOSES THE EXISTENCE OF VALID RETURN OF INCOME. IN THE INSTANT CASE, THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 27.06.2017 AND THERE WAS NO NOTICE ISSUED U/S 143(2) SUBSEQUENT TO FILING THE RETURN OF INCOME , H ENCE, A RGUED THAT THE ASSESSMENT WAS COMPLETED WITHOUT A VALID NOTICE U/S 143(2) AND THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA). THEREFORE, SUBMITTED THAT THE LD.CIT(A) HAS RIGHTLY HELD TH AT THE ASSESSMENT IS INVALID AND NO INTERFERENCE IS CALLED FOR. 6 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE AO HAD ISSUED NOTICE U/S 148 IN RESPONSE TO WHICH THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 03.04.2017. SUBSEQUENTLY, NOTICE U/S 143(2) WAS ISSUED ON 10.04.2017. THE RETURN FILED ON 03.04.2017 WAS NOT ACCEPTED BY THE INCOME TAX DEPARTMENT, HENCE, THE RETURN FILED ON 03.04.2017 BECOMES NON - EST AND THE CONSEQUENT NOT ICE ISSUED U/S 143(2) ON 10.04.2017 BECOMES INFRUCTUOS. THEREFORE, THE RETURN FILED ON 03.04.2017 OR NOTICE ISSUED ON 10.04.2017 BOTH BECOMES INVALID, HENCE , THE AO IS NOT PERMITTED TO PROCEED FURTHER FOR ASSESSMENT WITHOUT HAVING VALID RETURN AND WITHOUT ISSUE OF VALID NOTICE. THE ASSESSEE FILED ANOTHER RETURN OF INCOME ON 27.06.2017 AND LATER ON, THE AO HAS NOT ISSUED ANY NOTICE U/S 143(2) OF THE ACT. AS PER SECTION 143(2) OF THE ACT, THE NOTICE REQUIRED TO BE ISSUED IN A CASE, WHERE THE RETURN HAS BEE N FURNISHED U/S 139 OR IN RESPONSE TO THE NOTICE U/S 142(1) OF THE ACT. IN THE INSTANT CASE, VALID RETURN WAS FILED BY THE ASSESSEE ON 27.06.2017, SUBSEQUENTLY, THERE WAS NO NOTICE ISSUED U/S 143(2) BY THE AO. THE ASSESSMENT REQUIRED TO BE COMPLETED U/S 143(3) ONLY AFTER ISSUE OF NOTICE U/S 143(2) AS PROVIDED U/S 143(3) OF THE ACT AS PER TH E DECIDED CASE LAWS. IN THE INSTANT CASE, THOUGH THE AO COMPLETED THE ASSESSMENT U/S 143(3), THERE WAS NO NOTICE ISSUED U/S 143(2) OF THE ACT. THE LD.CIT(A) CONSIDERE D 7 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI THE ENTIRE ISSUE OF NON EXISTENCE OF RETURN OF INCOME AND ALSO THE ISSUE OF NOTICE U/S 143(2) PRIOR TO THE RETURN OF INCOME FILED AND DECIDED THE ISSUE AGAINST THE ASSESSEE. FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THE LD.CIT(A) WHICH READS AS UNDER : I HAVE CONSIDERED THE MATERIAL FACTS AND DECISIONS RELIED UPON BY THE APPE LLANT INCLUDING REPORT OF THE AO FOR DISPOSAL OF ADDITIONAL GROUND. THE APPELLANT FLIED A RETURN OF INCOME ON 03 - 04 - 2017 IN RESPONSE TO NOTIC E U/S. 148 OF THE ACT ISSUED BY THE AO. THE APPELLANT FAILED TO SUBMIT SIGNED ITR - V TO THE COMPETENT AUTHORITY , HENCE , RETURN FILED WAS NOT ACCEPTED. HOWEVER, THE AO IN THE MEANTIME I.E. 10 - 04 - 2017 ISSUED NOTICE U/S. 143(2) OF THE ACT AND SERVED ON 12 - 04 - 2017. THE APPELLANT, AS THE FIRST RETURN FILED WAS NOT ACCEPTED, FILED ONE MORE RETURN ON 27.06. 2017 STATING THAT IT IS A N ORIGINAL RETURN FILED AND THE SAME WAS ACCEPTED BY CPC, BANGALORE ON 06 - 07 - 2017. THE APPELLANT CONTENDED THAT THE VALID RETURN FOR THE YEAR WAS FILED ON 27 - 06 - 2017 AND THEREAFTER THE AO HAS NOT ISSUED NOTICE U/S. 143(2) OF THE ACT TO CONVERT THE CASE INTO SCRUTINY HENCE CLAIMED THAT THE ASSESSMENT IS VOID. THE AO IN THE REPORT STATED THAT THE APPELLANT WAS REPRESENTED THROUGH HIS AR THROUGHOUT THE ASSESSMENT PROCEEDINGS AND IN NO OCCASION OBJECTED THE ISSUE OF SERVICE OF NOTICE. HOWEVER, THE AO HAS NOT BROUGHT ANYTHING ON RECORD TO DI SPROVE THE CLAIM OF THE APPELLANT THAT NOTICE U/S. 143(2) OF THE ACT WAS NOT SERVED SUBSEQUENT TO FILING OF RETURN WHICH WAS ACCEPTED BY THE DEPARTMENT. IN THE REJOINDER; THE APPELLANT STATED THAT MERE COOPERATION OF THE APPELLANT IN THE ASSESSMENT PROCEED INGS AND NON - RAISING OF ISSUE OF NON - SERVICE OF NOTICE WOULD NOT MAKE THE DEFECT CURABLE. IT WAS CONTENDED THAT NOTICE U/S. 143(2) OF THE ACT WAS NOT ISSUED WITHIN THE TIME PRESCRIBED UNDER ACT AGAINST THE RETURN WHICH WAS CONSIDERED BY THE AO FOR COMPLETI ON OF THE ASSESSMENT. HENCE, ARGUED THAT THE ASSESSMENT ORDER IS INVALID. THE APPELLANT FILED COPIES OF THE DECISIONS OF VARIOUS HONBLE COURTS AND TRIBUNAL AS UNDER: 1 . MR. SALMAN KHAN (ITA (L) NO. 2362 OF 2009) BOMBAY HIGH COURT 2 . MR. SALMAN KHAN (ITA NO 508 OF 2010) BOMBAY HIGH COURT 3 . PANKAJ DUTTA (ITA NO. 2206/KOL/2016) ITAT, KOLKATA 4 . KAMLA DEVI SHARMA (ITA NO.1026/JP/2016) ITAT,JAIPUR I HAVE CONSIDERED THE DECISIONS RELIED UPON BY THE APPELLANT AS ABOVE. THE APPELLANT RELIED ON ABOVE DECISIONS FOR THE PROPO SITION THAT ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT IS MANDATORY AND THE MISTAKE IF ANY IS NOT CURABLE EITHER 8 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI U/S. 292 B B AND 292 C OF THE IT ACT. ISSUING NOTICE U/S. 143(2) OF THE ACT IS FOR ASSUMING JURISDICTION AND THIS IS NOT A PROCEDURAL THING AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (321 ITR 362) . THE RELEVANT PART OF THE ORDER IS AS UNDER: 15. WE MAY NOW REVERT BACK TO SECTION 158 BC(B) WHICH IS THE MATERIAL PROVISION WHICH REQUIRES OUR CONSIDERATION. SECTION 158 BC(B) PR OVI DES FOR ENQUIRY AND ASSESSMENT. THE SAID PROVISION READS THAT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED IN COME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158 BB AND THE PROVISIONS OF SECTION 142, SUBSECTION (2) AND (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FOR AS MAY BE, APPLY. 'AN ANALYSIS OF THIS SUB SECTION INDICATES THAT, AFTER T HE RETURN IS FILED, THIS CLAUSE ENABLES THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER SECTIONS143(2)/142 AND COMPLETE THE ASSESSMENT UNDER SECTION 143(3). THIS SECTION DOES NOT PROVIDE FOR ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143( 1 )(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 ASSES SMENT IS TO BE COMPLETED UNDER SECTION 143(3) READ WITH SECTION 158 - BC, 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 SECTION143( 2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SOME IS NOT CURABLE AND, THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH. THE OTHER IMPORTANT FEATURE THAT REQUIRES TO BE - NOTICED IS THAT THE SECTION 158 BC (B) SPECIFICALLY REFERS TO SOME OF THE PROVISIONS OF THE ACT WHICH REQUIRES TO BE FOLLOWED BY THE ASSESSING OFFICER WHILE COMPLETING THE - BLOCK ASSESSMENTS UNDER CHAPTER XIV - B OF THE ACT. THIS LEGISLATION IS BY INCORPORATION. THIS SECTION - EVEN SPEAKS OF SUBSECTIONS WHI CH ARE TO BE FOLLOWED BY THE ASSESSING OFFICER. HAD THE INTENTION OF THE LEGISLATURE WAS TO EXCLUDE THE PROVISIONS OF CHAPTER XIV OF THE ACT, THE - LEGISLATURE WOULD HAVE OR COULD HAVE INDICATED THAT ALSO. A READING OF THE PROVISION WOULD CLEARLY INDICATE, IN OUR OPINION, IF THE ASSESSING OFFICER, IF FOR ANY REASON, REPUDIATES THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION - 158 BC(A), THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME PR ESCRIBED IN THE PROVISO TO SECTION 143(2) OF THE ACT WHERE THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN PROVISIONS FROM THE AMBIT OF SECTION 153 BC(B) IT HAS DONE SO SPECIFICALLY. THUS, WHEN SECTION 158 BC(B) SPECIFICALLY REFERS TO APPLICABILITY OF THE PROV ISO THERETO CANNOT BE EXCLUDED. WE MAY ALSO NOTICE HERE ITSELF THAT THE CLARIFICATION GIVEN BY CBDT IN ITS CIRCULAR NA.717 DATED 14 9 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI AUGUST, 1995, HAS A BINDING EFFECT ON THE DEPARTMENT, BUT NOT ON THE COURT. THIS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW I N RESPECT OF SERVICE OF NOTICE UNDER SUB - SECTION (2) OF SECTION 143 OF THE ACT. ACCORDINGLY, WE CONCLUDE EVEN FOR THE PURPOSE OF CHAPTER XL V - B OF THE ACT, FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF SECTION 158 B C, THE PROVISIONS OF SECTION 142 AND SUB - SECTIONS (2) AND (3) OF SECTION 143 ARE APPLICABLE AND NO ASSESSMENT COULD BE MADE WITHOUT ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. HOWEVER, IT IS CONTENDED BY SRI SHEKHAR, LEARNED COUNSEL FOR THE DEPARTMENT THAT IN VIEW OF THE EXPRESSION 'SO FAR AS MAY BE' IN SECTION 153 BC(B), THE ISSUE OF NOTICE IS NOT MANDATORY BUT OPTIONAL AND ARE TO BE APPLIED TO THE EXTENT PRACTICABLE. IN SUPPORT OF THAT CONTENTION, THE LEARNED COUNSEL HAS RELIED ON THE OBSERVATION MAD E 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 CODE RELATING TO SEARCHES, SHALL SO FOR 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 WH ILE 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 IS THAT THE EXPRESSION SO FOR AS MAY BE APPLY INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PROVISIONS OF SECT/AN 142, SUB SECTIONS (2) BAD (3) OF SECTION 143 STRICTLY FOR THE PURPOSE OF BLOCK ASSESSMENTS. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE, SINCE WE DO NOT SEE ANY REASON TO RESTRICT THE SCOPE AND MEANING OF THE EXPRESSION 'SO FOR AS MAY BE APPLY'. IN OUR VIEW, WHERE THE ASSESSING OFFICER IN REPUDIATION OF THE RETURN FILED UNDER SECTION 1588C(A) PROCEEDS TO MAKE ON ENQUIRY, HE HAS NECESSARILY TO FOLLOW THE PROVISIONS OF SECTION 142, SUB - SECTIONS (2) AND (3) OF SECTION 143. 17. SECTION 158BH PROVIDES FOR APPLICATION OF THE OTHER PROVISIONS OF THE ACT. IT READS: 'SAVE AS OTHERWISE PROVIDED IN THIS CHAPTER, ALL THE OTHER PROVISIONS OF THIS ACT SHALL APPLY TO ASSESSMENT MADE UNDER THIS CHAPTER'. THIS IS AN ENABLING PROVISION, WHICH MAKES ALL THE PROVISIONS OF THE ACT, SAVE AS OTHERWISE PROVIDED, APPLICABLE FOR PROCEEDINGS FOR BLOCK ASSESSMENT. THE PROVISIONS WHICH ORE SPECIFICALLY INCLUDED ARE THOSE WHICH ARE OVAL/ABLE IN CHAPTER XIV - B OF THE ACT, WHICH INCLUDES SEC TION 142 AND SUB - SECTIONS (2) AND (3) OF SECTION 143. 10 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI 18. ON A CONSIDERATION OF THE PROVISIONS OF CHAPTER XL V - B OF THE ACT, WE ARE IN AGREEMENT WITH THE REASONING AND THE CONCLUSION REACHED BY THE HIGH COURT' THE HON'BLE ITAT, KOLKATA IN THE CASE OF PANKAJ DUTTA DISCUSSED SO MANY ASPECTS REGARDING ISSUE OF NOTICE U/S. 143(2) OF THE ACT IN REASSESSMENT PROCEEDINGS. THE HON'BLE TRIBUNAL CONSIDERED 1 THE DECISION OF HON'BLE ITAT DELHI IN THE CASE OF MEENAKSHI AGGARWAL WHEREIN IT WAS HELD THAT ISSUE OF NOTI CE U/S. 143(2) OF THE ACT PRIOR TO FILING OF RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT IS INCORRECT AND PASSING AN ORDER IS WITHOUT JURISDICTION. IN THE PRESENT CASE, THE AO ISSUED NOTICE. U/S. .143(2) OF THE ACT PRIOR TO THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THOUGH THE APPELLANT FILED A RETURN PRIOR TO ISSUE OF NOTICE U/S. 143(2) OF THE ACT THE SAME WAS NOT ACCEPTED BY THE DEPARTMENT HENCE IT CANNOT BE HELD THAT THERE IS A VALID RETURN AS ON DATE OF ISSUE OF NOTICE U/ S. 143(2) OF THE ACT. COMPLETING THE ASSESSMENT / REASSESSMENT WITHOUT ASSUMING JURISDICTION IS BAD IN LAW. ISSUING NOTICE, PRIOR TO FILING OF RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT IS NOT A PROCEDURAL MISTAKE. AS PER THE DECISION OF THE HON'BLE SUPREME 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 IS THAT THE EXPRESSION SO FOR AS MAY BE APPLY INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PROVISIONS OF SECT/AN 142, SUB SECTIONS (2) BAD (3) OF SECTION 143 STRICTLY FOR THE PURPOSE OF BLOCK ASSESSMENTS. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE, SINCE WE DO NOT SEE ANY REASON TO RESTRICT THE SCOPE AND MEANING OF THE EXPRESSION 'SO FOR AS MAY BE APPLY'. IN OUR VIEW , WHERE THE ASSESSING OFFICER IN REPUDIATION OF THE RETURN FILED UNDER SECTION 1588C(A) PROCEEDS TO MAKE ON ENQUIRY, HE HAS NECESSARILY TO FOLLOW THE PROVISIONS OF SECTION 142, SUB - SECTIONS (2) AND (3) OF SECTION 143. 6 .1. IN THE INSTANT CASE, THERE WA S NO NOTICE ISSUED U/S 143(2) OF THE ACT SUBSEQUENT TO FILING THE RETURN OF INCOME. EVEN IN THE CASE OF HOTEL BLUE MOON HONBLE SUPREME COURT HELD THAT SECTION 292BB COMES TO THE RESCUE OF THE DEPARTMENT ONLY AFTER ISSUE OF NOTICE U/S 143(2). IN THE INSTANT CASE, THERE IS NO NOTICE ISSUED U/S 143(2) BY THE AO SUBSEQUENT TO FILING THE VALID RETURN OF INCOME. THEREFORE, WE HOLD THAT THE CASE OF THE ASSESSEE IS 11 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI SQUARELY COVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AGAI NST THE ASSESSEE. THEREFORE, WE HOLD THAT THE LD.CIT(A) HAS RIGHTLY CANCELLED THE ASSESSMENT MADE U/S 143(3) , IN THE ABSENCE OF NOTICE ISSUED U/S 143(2). ACCORDINGLY, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND UPHOLD THE SAME. 7. THE A SSESSEE FILED CROSS OBJECTIONS SUPPORTING THE ORDER OF THE LD.CIT(A). SINCE THE REVENUES APPEAL IS DISMISSED, CROSS OBJECTIONS FILED BY THE ASSESSEE BECOMES INFRUCTUOUS, HENCE DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTI ONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2019. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 31 . 1 2 .2019 L.RAMA, SPS 12 I.T.A. NO. 237/VIZ/2019 AND CO NO.70/VIZ/2019, A.Y.2016 - 17 SRI ANDE SRI RAMA MURTHY, MANGALAGIRI / COPY OF THE ORDER FORWARDED TO: - 1 . / THE REVENUE - ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), GUNTUR 2 . / THE ASSESSEE - SRI ANDE SRI RAMA MURTHY, SL/O MANGAIAH, 10 - 221 A, NEAR KALYANA MANDAPAM, MANGALAGIRI 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX , GUNTUR 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 1, GUNTUR 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM