Shri Subrata Kumar Saha, Agartala V. Assistant Commissioner of Income Tax, Circle - Agartala , Agartala

ITA 101/GTY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8553 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA SINGHJ DATEOFHEARING
• Assessee Lawyers: SANJAYMODI FCA J
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Non compliance; Procedural lapse; Assessment record; Block assessment; Revised return; Documents seized
• Section: 143(3); 142(1); 153A; 143(1); 145; 148; 132

Judgement Text

] \ ' \ ' , ' , IN THEINCOMETAXAPPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRIS.S.GODARA,JUDICIALMEMBER AND DR. A.L. SAINI, ACCOUNTANTMEMBER ITA NO. 101 / GAU / 2018 ASSESSMENT YEAR :2009-10 M/S SUBRATA KUMAR SAHA C/O SHHRI RANJIT KR. SAHA, OLD THANA ROAD, BANAMALIPUR, AGARTALA- 799001 [ PAN NO.AUQPS 2648 E ] V/S . ACIT, CIRCLE- AGARTALA, AGARTALA, TRIPURA \ ' /APPELLANT .. / RESPONDENT ITA NO. 102 - 108 / GAU / 2018 ASSESSMENT YEARS :2009-10 TO 2015- 16 M/S RANJIT KUMAR SAHA OLD THANA ROAD, BANAMALIPUR, AGARTALA- 799001 [ PAN NO.AULPS 6524 J ] V/S . ACIT, CIRCLE- AGARTALA, AGARTALA, TRIPURA \ ' /APPELLANT .. / RESPONDENT J /BYASSESSEE SHRI SANJAYMODI, FCA J /BYREVENUE SHRI RAVINDRA SINGH,JCIT-DR ' _ /DATEOFHEARING 10-07-2019 /DATEOFPRONOUNCEMENT 12-07-2019 / ORDE R PERBENCH:- THE INSTANT BATCH OF EIGHT CASES PERTAINS TO TWO ASSESSEE SHRI SUBRATA KUMAR SAHA & M/S RANJIT KUMAR SAHA, HEREINAFTER REFERRED AS FIRST AND SECOND ASSESSEES FOR ASSESSMENT YEAR(S) 2009-10 TO 2015-16, ARISE AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-SHILLONGS SEPARATE ORDERS ALL ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE2 DATED 26.02.2018 PASSED IN CASE NOS. CIT(A)/SHG/10286, 10375-10279, 10282, 10285, INVOLVING PROCEEDINGS U/S 153C R.W.S. 153A R.W.S. 144 OF THE INCOMETAXACT,1961;INSHORTTHEACTRESPECTIVELY. HEARD LEARNED COUNSEL, SHRI SANJAY MODI REPRESENTING THE ASSESSEES AND SHRI RABINDRA SINGH APPEARING AT THE REVENUES BEHEST. CASE FILE(S) PERUSED. 2. IT EMERGES DURING THE COURSE OF HEARING THAT FIRST ASSESSEES APPEAL ITA NO. 101GAU/2018 AND SECOND ASSESSEES SIX APPEAL(S) IN ITA NO.102 TO 107/GAU/2018 CHALLENGE VALIDITY OF THE LOWER AUTHORITIES ACTION INITIATING SEC. 153C PROCEEDINGS IN ABSENCE OF ANY VALID SATISFACTION RECORDED THAT THE SE4ARCH IN ISSUE HAD LED TO ANY MONEY, BULLION JEWELLERY OR THE OTHER SPECIFIED ASSETS AS BELONGING OR PERTAINING OR RELATING TO THEM. WE ARE TAKEN TO ASSESSING OFFICERS IDENTICAL SATISFACTION INITIATING THE IMPUGNED SEC. 153C PROCEEDINGSREADING ASUNDER:- ORDER SHEET NAME OFTHE ASSESSEE:SUBRATA KUMARSAHA PAN: AUQPS 2648E ASSESSMENT YEAR:2009-10 DATE: 02-11-2015 A SEARCH AND SEIZURE WAS CONDUCTED IN THE PREMISES OF SUBRATA KUMAR SAHA ON 25.03.2015 . APPRAISAL OF THE CASE HAS ALREADY BEEN RECEIVED FROM THE DDIT, GUWAHATI. IT IS A CONSEQUENTIAL CASE OF SUSHANTA SAHA . ACCORDINGLY A NOTICE U/S. 153A READ WITH SECTION 153C IS ISSUED TO THE ASSESSEE CALLING RETURN FOR THE ASST. YEAR 2009-10 BEING ONE OF THE SIX ASSESSMENT YEARS PRECEDING TO THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED) IN THE PRESCRIBED FORMAT AND BE DULY VERIFIED IN PRESCRIBED MANNER AND TO BE SUBMITTED TO THE OFFICEOFTHEUNDERSIGNED BY 03-12-2015 . SD/-ILLEGIBLE PREPARED BY DCIT SD/- DHARRMENDRADEV BARMAN SD/-RITASEN STENOGRAPHER (RITASEN) OFFICE SUPERINTENDENT O/OTHE JCIT,AGARTALA ORDER SHEET NAME OFTHE ASSESSEE:RANJIT KUMARSAHA PAN: AULPS 6524 J ASSESSMENT YEAR:2009-10 DATE: 02-11-2015 A SEARCH AND SEIZURE WAS CONDUCTED IN THE PREMISES OF RANJIT KUMAR SAHA ON 25.03.2015 . APPRAISAL OF THE CASE HAS ALREADY BEEN RECEIVED FROM THE DDIT, GUWAHATI. IT IS A CONSEQUENTIAL CASE OF SUSHANTA SAHA . ACCORDINGLY A NOTICE U/S. 153A READ WITH SECTION 153C IS ISSUED TO THE ASSESSEE CALLING RETURN FOR THE ASST. YEAR 2009-10 BEING ONE OF THE SIX ASSESSMENT YEARS PRECEDING TO THE ASSESSMENT ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE3 YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED) IN THE PRESCRIBED FORMAT AND BE DULY VERIFIED IN PRESCRIBED MANNER AND TO BE SUBMITTED TO THE OFFICEOFTHEUNDERSIGNED BY 03-12-2015 . SD/-ILLIGIBLE PREPARED BY DCIT SD/- DHARRMENDRADEV BARMAN SD/-RITASEN STENOGRAPHER (RITASEN) OFFICE SUPERINTENDENT O/OTHE JCIT,AGARTALA THEASSESSEED THEN QUOTE THIS TRIBUNALS DECISIONIN THE VERYSEARCH RELATINGTO THESEGROUP ENTERPRISE JOYRAM ENTERPRISE VS. ACIT IN ITA NO. 260 TO 266/GAU/2017 DECIDED ON 22.02.2018 QUASHING IDENTICAL PROCEEDINGS IN ABSENCEOFA VALID SATISFACTIONASUNDER:- 2. AS THE FACTS AND ISSUE INVOLVED IN THESE APPEALS ARE IDENTICAL, THEY ARE BEING DISPOSED OFFTOGETHER BYTHIS CONSOLIDATEDORDER. 3. THE GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-2010 ARE ASUNDER:- 1. FOR THAT THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOMETAX(APPEALS)[CIT(A)] ISBAD IN LAW,FACTSAND PROCEDURE. 2 FOR THAT THE LD. CIT(A) ERRED IN NOT QUASHING THE ORDER OF ASSESSMENT PASSED BYTHELD. AOWHICH IS BARREDBYLIMITATION. 3. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ORDER PASSED BY THE LD. AO AS THE INITIATION OF PROCEEDINGS U/S. 1563C OF THE ACT IN THE INSTANT CASE IS WITHOUT SATISFACTION OF PRE-REQUISITE CONDITIONS AND CONSEQUENTLY, WITHOUTJURISDICTIONAND BAD IN LAW. 4. FOR THAT IN ABSENCE OF ANY VALID NOTICE U/S. 153C BEING SERVED UPON THE APPELLANT ALSO,THE IMPUGNED ORDER IS WITHOUTJURISDICTION AND BADIN LAW. 5. FOR THAT THE IMPUGNED ORDER WAS PASSED BY THE LEARNED CIT(A) IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT ALLOWING REASONABLE OPPORTUNITY OF BEING HEARD AND HENCE, THE SAME IS BAD IN LAW AND IS LIABLE TO BEQUASHED. 6. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ARBITRARY ADDITION OF RS.33,873/-. 7. FOR THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ARBITRARY ADDITION FORRS.4,86,411/- 8. FOR THAT THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE CHARGE OF INTEREST U/S. 234C AT RS.5,948/- IS BAD IN LAWAND UNTENABLE. 9. FOR THAT YOUR APPELLANT CRAVES LEAVES OF YOUR HONOURS TO TAKE ADDITIONAL GROUND OR GROUNDS AND/OR TO MODIFY ANY GROUND(S) OF APPEAL AT OR BEFORE THE TIME OF HEARING. 4. THE AR OF THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT HE WILL BE ARGUING GROUND NO.3 OF THE APPEAL, WHICH IS DIRECTED AGAINST THE ASSESSING OFFICER INITIATING PROCEEDINGS U/S 153C OF THE ACT WHERE THE PROCEEDINGS WERE INITIATED BY HIM WITHOUT RECORDING SATISFACTION WHICH IS A PRE-REQUISITE CONDITIONS FOR INITIATING PROCEEDINGS U/S 153C OF THE ACT AND WITHOUT WHICH THE AO DOES NOT DERIVE JURISDICTION TO MAKE ASSESSMENT AND, THEREFORE, THE ORDER PASSED BY HIM U/S 153C OF THE ACT IS WITHOUT JURISDICTION AND BADIN LAW. 5. HE SUBMITTED THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SHRI SUSHANTA SAHA ON 25.03.2015. SHRI SUSHANTA SAHA IS A PARTNER IN THE ASSESSEE FIRM, FROM WHERE CERTAIN DOCUMENTS WERE FOUND AND SEIZED ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE4 IN THE SEARCH OPERATION, THEREFORE, PROCEEDINGS U/S. 153C OF THE ACT WAS INITIATED AGAINST THE ASSESSEE FOR THE SIX YEARS UNDER CONSIDERATION AND CONSEQUENTLY AN ORDER CAME TO BE PASSED U/S. 153C R.W.S. 143(3) OF THE ACT ON 26.12.2016. THE PROCEEDINGS WAS STARTED U/S. 153C OF THE ACT WITHOUT RECORDING SATISFACTION OF THE NATURE SPECIFIED IN SECTION 153C OF THE ACT AND, THEREFORE, IS INVALID AND BAD IN LAW. FOR THIS, HE PLACED RELIANCE ON THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. M/S SHETTYS PHARMACEUTICALS & BIOLOGICALS LTD. IN ITAT NO.662 OF 2014 DATED 26-11-2014 AS WELL AS DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI SATYANARAYAN AGARWAL VS ASST. CIT, ITA NO.1764/HYD/2013 , DATED 08.01.2016, WHERE IT WAS HELD THAT INITIATION OF PROCEEDINGS U/S 153C OF THE ACT WITHOUT RECORDING SATISFACTION BYTHE ASSESSING OFFICEROFTHESEARCHEDPERSON AND BY THE ASSESSING OFFICER OF THE OTHER PERSON AGAINST WHOM PROCEEDINGS U/S 153C OF THE ACT ARETAKEN UP,THEPROCEEDING IS INVALID AND BAD IN LAW. 6. THE DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, REFERRED TO THE SECTION 124(3)(C) OF THE INCOME-TAX ACT AND CONTENDED THAT NO PERSON SHALL BE ENTITLED TO CALL IN QUESTION THE JURISDICTION OF AN ASSESSING OFFICER IN A CASE WHERE AN ACTION HAS BEEN TAKEN U/S. 132 OR U/S. 132A OF THE ACT AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED WITH A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 153A OF THE INCOME-TAX ACT OR SUB-SECTION (2) OF SECTION 153C OF THE INCOME-TAX ACT OR AFTER THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. HE SUBMITTED THAT THE OBJECTION WHICH IS NOW BEING RAISED BY THE ASSESSEE THAT THE INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT IS BAD IN LAW, SHOULD HAVE BEEN RAISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WITHIN ONE MONTH OF THE INITIATION OF PROCEEDINGS BY HIM AND AS THIS WAS NOT DONE, IN VIEW OF THE PROVISIONS OF SECTION 124(3)(C)OF THE ACT, THE SAME CANNOT BERAISEDNOW BEFORETHETRIBUNAL. 7. IN THE REJOINDER, THEN COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROVISIONS OF SECTION 124(3)(C) OF THE ACT WHICH PROVIDES THAT NO PERSON SHALL BE ENTITLED TO CALL IN QUESTION THE JURISDICTION OF AN ASSESSING OFFICER AFTER THE EXPIRY OF ONE MONTH FROM THE DATE OF SERVICE OF NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 153A OR SUB- SECTION (2) OF SECTION 153C OF THE INCOME-TAX ACT OR AFTER THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER, WAS INSERTED W.E.F. 01.06.2016, WHEREAS THE PROCEEDING IN THE CASE OF ASSESSEE U/S. 153C OF THE ACT WAS INITIATED ON 02.11.2015 AND, HENCE, THE PROVISIONS ARE NOT APPLICABLE TO THE ASSESSEE. HE FURTHER CONTENDED THAT IN PRESENT APPEAL BEFORE THE TRIBUNAL, THE JURISDICTION OF THE AO IS NOT CHALLENGED PER SE BUT THE VALIDITY OF THE ACTIN OF AO TO INITIATE PROCEEDINGS U/S. 153C OF THE ACT WITHOUT RECORDING SATISFACTION WHICH IS A SINE QUA NON IS CHALLENGED AND, THEREFORE, THE SAID PROVISIONS ARE NOT APPLICABLE IN THECASEOFTHE ASSESSEE. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEFLY THE FACTS RELATED TO ALL THE SIX YEARS UNDER APPEAL I.E. ASSESSMENTYEARS 2009- 2010 TO 2014-2015 ARE THAT A SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF SHRI SUSHANTA SAHA ON 25.03.2015. THE SAID SHRI SUSHANTA SAHA IS A PARTNER IN THE ASSESSEE FIRM AND DOCUMENTS RELATED TO THE ASSESSEE FIRM WERE ALSO FOUND AND SEIZED DIN THE COURSE OF SEARCH OPERATION. CONSEQUENTLY, THE ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT WAS INITIATED AGAINST THE ASSESSEE FOR ALL THE SIX YEARS UNDER CONSIDERATION AND ASSESSMENT U/S. 153C R.W.S 143(3) OF THE ACT WAS COMPLETED ON 26.12.2016. THE ASSESSEE CONTENDED BEFORE US THAT THE INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT IN THE INSTANT CASE IN ABSENCE OF RECORDING OF SATISFACTION OF THE NATURE SPECIFIED IN SECTION 153C OF THE ACT, IS INVALID AND BAD IN LAW. THE AS HAS FILED PAPER BOOK BEFORE US WHEREIN COPY OF ORDER SHEET ENTRIES FOR ALL THE SIX YEARS UNDER CONSIDERATION ARE FILED AT PAGE NOS. 1 TO 14 OF THE PAPER BOOK. THE FIRST RECORDING IN THE ORDER SHEET OF THE ASSESSEE IS MADE BY TD HE AO ON 02.11.2015 I.E. THE VERY SAME DATE ON WHICH NOTICE U/S. 153C OF THE ACT WAS ISSUED. THE RECORDING MADE ON 02.11.2015 IN THE ASSESSMENT YEAR 2009-2010 READS AS UNDER:- ORDER SHEEET ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE5 NAME OFTHE ASSESSEE: JOYRAMENTERPRISE PAN: AAGFJ6548 N ASSESSMENT YEAR: 2009-10 DATE:02.11.2015 A SEARCH AND SEIZURE WAS CONDUCTED IN THE PREMISES OF JOY RAM ENTERPRISE ON 25.03.2015 . APPRAISAL OF THE CASE HAS ALREADY BEEN RECEIVED FROM THE DDIT, GUWAHATI. IT IS A CONSEQUENTIAL CASE OF SUSHANTA SAHA . ACCORDINGLY A NOTICE U/S. 153A READ WITH SECTION 153C IS ISSUED TO THE ASSESSEE CALLING RETURN FOR THE ASST. YEAR 2009-10 ) BEING ONE OF THE SIX ASSESSMENT YEARS PRECEDING TO THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED) IN THE PRESCRIBED FORMAT AND BE DULY VERIFIED IN PRESCRIBED MANNER AND TO BE SUBMITTED TO THE OFFICE OF THE UNDER SIGNED BY 03.12-2015 . SD/- DCIT 9. THE RECORDINGS MADE FOR ALL OTHER YEARS UNDER CONSIDERATION ARE ALSO EXACTLY THE SAME, EXCEPT CHANGE OF ASSESSMENT YEAR. THUS, IT IS OBSERVED THAT NOWHERE IT STATES RECORDING OF ANY SATISFACTION IN THE CASE OF SEARCHED PERSON WHICH HAVES BEEN PLACED IN THIS FILE OF THE ASSESSEE NOR ANY RECORD OF SATISFACTION TO THE EFFECT THAT BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED HAVE A BEARING ON THE TOTAL INCOME OFTHE ASSESSEEFORTHERELEVANT ASSESSMENT YEARS. 10. SECTION 153C OFTHEACT ASWAS INFORCE ATTHE MATERIALTIME,READS ASUNDER:- 1 53C.(1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICERIS SATISFIEDTHAT,- (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGSTO;OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAINTO,ORANYINFORMATION CONTAINEDTHEREIN,RELATES TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL, INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A 11. WE FIND THAT THE HON ANDHRA PRADESH HIGH COURT IN THE CASE OF SHETTYS PHARMACEUTICALS & BIOLOGICAL LTD. IN ITTA NO.662 OF 2014 DATED 26.11.2014, HAS CONSIDERED SIMILAR FACTS AND ANALYSED THE ABOVE PROVISIONS OF SECTION 153C OF THE ACT AND UPHELD THE DECISION OF THE TRIBUNAL THAT INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT WAS INVALID AND CONSEQUENTLY AND CONSEQUENTLY, THE ORDER PASSED U/S. 153C WAS BAD IN LAW. THE HONBLE ANDHRA PRADESH HIGH COURT ON A READING OF SECTION 153C OFTHEACT, HASHELD AS UNDER:- . .. IT IS THEREFORE CLEAR THAT FIRSTLY SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER WHO CONDUCTED SEARCH, THAT ANY MONEY, BULLION, JEWEELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. THEREAFTER, THE ASSESSING OFFICER HAVING JURISDICTION OVER THIRD PARTYON RECEIPT OF THE SEIZED MATERIAL OR BOOKS OF ACCOUNTS OR DOCUMENT BEING HANDED OVER TO HIM SHALL RECORD HIS OWN SATISFACTION AFTER EXAMINING THE SAME INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE SATISFACTION OF ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE6 THE SEIZING OFFICER. IN OTHER WORDS IT IS NOT AN AUTOMATIC ACTION. WE FINDSATISFACTION OF TWO OFFICERS ISMISSING.IN THIS CONNECTION WE SET OUT THETEXT OF THEORDEROF THE ASSESSING OFFICERWHICH IS ASFOLLOWS:- SEARCH AND SEIZURE OPERATION U/S 132 WAS CARRIED OUT IN THE GROUP CASE OF DR. T. YADHAIAH GOUD AND OTHERS ON 25.3.2010. DURING THE COURSE OF SEARCH OPERATION DOCUMENTS BELONGING TO SHETTY PHARMACEUTICALS & BILOOGICAL LTDD., HAS BEEN SEIZED. HENCE IT IS CONSIDERED TO INITIATE PROCEEDING U/S 153C OF THEIT ACT. THE AFORESAID SECTION MANDATES RECORDING OF SATISFACTION OF THE ASSESSING OFFICER(S) IS A PRE-CONDITION FOR INVOKING JURISDICTION AND IT IS NOT A MERE FORMALITY BECAUSE RECORDING OF SATISFACTION POSTULATES APPLICATION OF MIND CONSCIOUSLY AS THE DOCUMENTS SEIZED MUST BE BELONGING TO THE ANY OTHER PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153-A OF THE ACT. IT IS CONTENDED THAT THE SAME ASSESSING OFFICER IS INVOLVED IN THE MATTER. THIS FACT DOES NOT DISPENSE WITH ABOVE REQUIREMENT. IT IS SETTLED POSITION OF LAW THAT WHEN A THING IS TO BE DONE IN ONE PARTICULAR MANNER UNDER LAW THIS HAS TO BE DONE IN THAT MANNER ALONE AND NOT OTHER WAY (SEE NAZIR AHEMD V. KIND EMPEROR). WE THINK THE LEARNED TRIBUNAL HAS CORRECTLY FOLLOWED THE PRINCIPLE.WEDO NOTFINDANYELEMENT OF LAWTO BEDECIDED. 12. THE ABOVE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT WAS FOLLOWED BY THE HYDERABAD TRIBUNAL IN THE CASE OF SRI SATYANARAYAN AGARWAL VS. ASST. CIT, ITA NO. 1764/HYD/2013 DATED 08.01.2016. TO THE SAME EFFECT IS ALSO THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF TANVIR COLLECTIONS PVT. LTD. VS ACIT IN ITA NO.2421/DEL/2014 , ORDER DATED 16.01.2015. THE CBDT ALSO VIDE ITS CIRCULAR NO.24/2015, DATED 31.12.2015 HAS ACCEPTED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEARS, [2014] 362 ITR 673( SC), WHEREIN IT WAS HELD THAT RECORDING OF A SATISFACTION IS SINE QUA NON FOR TAKING AN ACTION AGAINST A PERSON U/S. 158BD OF THE ACT I.E. A PERSON IN WHOSE CASE SEARCH WAS NOT CONDUCTED AND ALSO ACCEPTED THAT THIS DECISION IS SQUARELY APPLICABLE IN CASE COVERED BY SECTION 153C OF THE ACT AND ALSO FURTHER DIRECTED THAT IN PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE U/S.158BD/153CSHOULD BE WITHDRAWN/NOTPRESSED,IF IT DOES NOT MEET THE GUIDELINES LAID DOWN BY THE HONBLE APEX COURT. IN THE CIRCUMSTANCES, IN THE INSTANT CASE, WE FIND THAT BOTH THE TWO SATISFACTIONS WHICH WERE REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER AS PER PROVISIONS OF SECTION 153C, ONE IN CAPACITY AS THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER IN THE CAPACITY OF THE AO OF THE ASSESSEE ( OTHER PERSON ), BOTH ARE MISSING. HENCE, WE HAVE NO HESITATION IN HOLDING THAT THE INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT, IN THE INSTANT CASE, IS BAD IN LAW AND WITHOUT JURISDICTION AND CONSEQUENTLY, THE ORDERS PASSED BY THE AO U/S 153C R.W.S. 143(3) FOR ALL THE SIX ASSESSMENT YEARS UNDER CONSIDERATION ARE LIABLE TO BE CANCELLED. 13. THE LD. DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO THE PROVISIONS OF SECTION 124(3)(C) OFTHEINCOME-TAX ACT,WHICH PROVIDES THAT NO PERSONSHALL BE ENTITLED TO CALL IN QUESTION THE JURISDICTION OF AN ASSESSING OFFICER AFTER EXPIRY OF ONE MONTH FROM THE DATE OF SERVICE OF NOTICE UNDER SECTION 153C OF THE INCOME-TAX ACT OR AFTER THE COMPLETION OF ASSESSMENT, WHICHEVER IS EARLIER, TO CONTEND THAT THE CHALLENGE TO THE INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT, NOW AT THIS STAGES, IS NOT VALID. WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE LD. DR. FIRSTLY, THIS SECTION 124(3)(C) OF THE INCOME-TAX ACT, WAS INSERTED IN THE STATUE W.E.F. 01.06.2016, WHEREAS IN THE INSTANT CASE, THE PROCEEDINGS U/S. 153C WAS INITIATED ON 02.11.2015. MOREOVER, IN THE INSTANT APPEALS, THE JURISDICTION OF THE AO IS NOT CHALLENGED PER SE BUT THE VALIDITY OF ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE7 THE ACTION OF AO TO INITIATE PROCEEDINGS U/S. 153C OF THE ACT WITHOUT RECORDING SATISFACTION WHICH IS A SINE QUA NON, IS CHALLENGED. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ACIT, CIRCLE-AGARTALA HAD NO JURISDICTION TO MAKE ASSESSMENT IN THE CASE OF THE ASSESSEE. FURTHER, THE ISSUE INVOLVED BEING A LEGAL ISSUE, THE SAME CAN BE RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL IS A SETTLED POSITION OF LAW IN VIEW OF THE DECISION OF HONBLE, WHEREIN IT HAS BEEN HELD THAT NOTHING PREVENTED THE TRIBUNAL TO CONSIDER THE QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS, ALTHOUGH NOT RAISED EARLIER. WE, THEREFORE, HEREBY CANCEL THE ORDERS OF LOWER AUTHORITIES FOR ALL THE SIX ASSESSMENT YEARS UNDER CONSIDERATION AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 14. IN VIEW OF OUR ABOVE DECISION, THE ISSUE RAISED IN OTHER GROUNDS OF APPEAL HAVE BECOME INFRUCTUOUSANDTHEREFORE,THE SAMEARENOT ADJUDICATED. 3. WE AFFORDED ADEQUATE OPPORTUNITY TO THE DEPARTMENT TO REBUT THIS CLINCHING FACT OF ASSESSING OFFICER HAVING NOT RECORDED A VALID SATISFACTION AS PRESCRIBED U/S 153C OF THE ACT. THERE IS NO SUCH REBUTTAL FORTHCOMING FROM THE DEPARTMENTS SIDE DURING THE COURSE OF HEARING. WE THEREFORE ADOPT THE ABOVE EXTRACTED DETAILED REASONING MUTATIS MUTANDIS TO QUASH THE IMPUGNED PROCEEDINGS ON ACCOUNT OF ASSESSING OFFICERS FAILURE IN NOT RECORDING A VALID SATISFACTION U/S. 153C OF THE ACT. THE IMPUGNED ASSESSMENT(S) ARE ACCORDINGLY QUASHED. THE ASSESSEES OTHER GROUNDS ON MERITS ARE RENDERED INFRUCTUOUS. 4. THE FIRST ASSESSEES APPEAL ITA NO.101/GAU/2018 AND SECOND ASSESSEES APPEALS ITA NOS. 102 TO 107/GAU/2018 ARE ALLOWED IN FOREGOING TERMS. 5. NEXT COMING TO LATTER ASSESSEES LAST APPEAL ITA NO.108/GAU/2018 FOR ASSESSMENT YEAR 2015-16, WE FIND THAT HE CHALLENGES CORRECTNESS OF THE BEST JUDGMENT ASSESSMENT FRAMED BY THE ASSESSING OFFICER ON 30.12.2016 WITHOUT ISSUING ANY NOTICE U/S. 142(1) OF THE ACT. THE CLINCHING FACT HEREIN IS THAT NO SUCH NOTICE HAD BEEN ISSUED TO THE TAXPAYER DURING THE COURSE OF ASSESSMENT. SAME FACATUAL POSITION CONTINUES SEC. 144(1) NOTICE IS CONCERNED. WE FIND IN THIS BACKDROP A CO-ORDINATE BENCHS DECISION IN IT(SS)A NO.92/KOL/2008 IN ACIT VS. SHRI RAMESH CHAND RATHI DECIDED ON 02.02.2018 HAS HELD A BEST JUDGMENTASSESSMENTASINVALIDBYTHE FOLLOWING DETAILEDDISCUSSION:- ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE8 11.WEHAVE HEARDTHESUBMISSIONS OF THELD. DR AND LD. COUNSELFORTHEASSESSE ON THE PRELIMINARY ISSUE OF VALIDITY OF ORDER OF ASSESSMENT PASSED U/S 158BC READ WITH SECTION 144 OF THE ACT.ITIS CLEARFROMTHE ORDER OF CIT(A)THATNOTICE U/S 142(1) OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE. THE REVENUE HAS NOT CHALLENGED THIS FINDING OF THE CIT(A). NEVERTHELESS THE LD. DR DREW OUR ATTENTION TO PAGE NO.316 OF 6 THE ASSESSEES PAPER BOOK WHICH IS A RECORD OF PROCEEDINGS BEFORE AO CONTAINING ORDER SHEET ENTRIES OF THE AO MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS. IN AN AFFIDAVIT FILED BEFORE THE TRIBUNAL, THE AO HAS STATED THAT THE ORIGINAL ORDER SHEET ENTRY IS NOT AVAILABLE IN THE ASSESSMENT RECORDS. THE ORDER SHEET ENTRY DATED 05.01.2001 READS ASFOLLOWS : 5.01.2001 NO BLOCK RETURN FILED, THE NOTICE U/S 142(1) CALLING FOR BOOKS OF A/CS, BANK STATEMENT AND CLARIFICATION OF SEIZED DOCUMENTS ALONG WITH COPYOF A/CS. 12. AS WE HAVE ALREADY STATED THERE IS NO EVIDENCE ON RECORD TO SHOW THAT NOTICE U/S 142(1) OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE. IT IS ALSO SEEN FROM THE ORDER SHEET ENTRY THAT THE ORDER SHEET ENTRY DATED 05.01.2011 AND 16.05.2001 HAVE NOT BEEN SIGNED BY THE AO. THEREFORE THE ORDER SHEET ENTRY DATED 5.1.2001 DOES NOT SHOW THAT NOTICE U/S.142(1) WAS ISSUED OR SERVED ON THE ASSESSEE. THE REVENUE IN ITS GROUNDS OF APPEAL HAS ALSO NOT CHOSEN TO CHALLENGE THE FINDINGS OF THE CIT(A) THAT NO NOTICE U/S.142(1) WAS ISSUED OR SERVED ON THE ASSESSEE BY THE AO BEFORE COMPLETING THE ASSESSMENT. 13. THE LD. DR DREW OUR ATTENTION TO PAGE 5 OF THE ASSESSEES PAPER BOOK WHEREIN A COPY OF THE NOTICE U/S.142(1) DATED 05.01.2001 IS PLACED. THE CONTENTION OF THE LD. DR IS THAT THE ASSESSEE HAS HIMSELF FILED THE AFORESAID NOTICE IN ITS PAPER BOOK AND THEREFORE IT SHOULD BE PRESUMED THAT THE ASSESSEE WAS SERVED WITH THE NOTICE US/ 142(1) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT COPY OF THE NOTICE PLACED IN PAGE-5 AND 5A OF THE ASSESEES PAPER BOOK WAS A COPY WHICH WAS FILED BY THE AO ALONG WITH THE REMAND REPORT DATED 01.02.2008 BEFORE CIT(A) AND THAT COPY WAS FILED BY THE ASSESSEE IN THE PAPER BOOK. IT WAS SUBMITTED BY HIM THAT THE AFORESAID NOTICE WAS NOT SERVED ON THE ASSESSEE NOR IS THERE ANY EVIDENCE ON RECORD TO SHOWTHATTHE SAIDNOTICE WAS ISSUED BYTHEAO. 14. AS WE HAVE ALREADY STATED THE AO HAS FILED AN AFFIDAVIT BEFORE THE TRIBUNAL REGARDING THE NON AVAILABILITY OF THE ORIGINAL ORDER SHEET ENTRIES CONTAINING THE ENTRY DATED 5.1.2001. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE AFFIDAVIT FILED BY THE AO BEFORE THE TRIBUNAL REGARDING NON AVAILABILITY OF ORDER SHEET ENTRIES AND IN THE LIGHT OF CLEAR FINDINGS OF CIT(A) IN HIS ORDER THAT NO NOTICE U/S 142(1) OF THE ACT WAS ISSUED OR SERVED ON THE ASSESSEE BY THE AO, THE CONTENTION OF THE ASSESSEE THAT NO NOTICE U/S 142(1) OF THE ACT WAS ISSUED OR SERVED ON THE ASSESSEE HAS TO BE ACCEPTED. THE QUESTION THEREFORE THAT ARISES FOR CONSIDERATION IS WHAT IS THE EFFECT OF THE NON ISSUE OF SERVICE OF NOTICE U/S 142(1)OF THEACT? 15.WEHAVE ALREADYSEEN THAT BEFOREMAKING THEBEST JUDGMENT U/S144(1)OF THE ACT, THE AO HAS TO SPECIFICALLY CALL UPON THE ASSESSEE BY A NOTICE TO SHOW CAUSE AS TO WHY THE BEST JUDGMENT SHOULD NOT BE MADE. THIS IS A REQUIREMENT OF THE FIRST PROVISO TO SECTION 144(1) OFTHEACT. ADMITTEDLYNO SUCHNOTICE WAS EITHER ISSUEDOR SERVED ON THE ASSESSEE. SUCH NOTICE MAY NOT BE REQUIRED IF A NOTICE U/S 142(1) OF THE ACT HAS ALREADY BEEN SERVED ON THE ASSESSEE. THIS IS AS PER THE SECOND PROVISO TO SECTION 144(1) OF THE ACT. IN THIS CASE, AS WE HAVE ALREADY SEEN, NO NOTICE U/S 142(1) OF THE ACT WAS EITHER ISSUE OR SERVED ON THE ASSESSEE. UNDER SECTION 158BH OF THE ACT THE PROVISION OF CHAPTER-XIV-B NAMELY BLOCK ASSESSMENT PROCEEDINGS IN SEARCH CASES, IT IS LAID DOWN THAT THE OTHER PROVISION OF THE ACT WILL APPLY, EXCEPT OTHERWISE PROVIDED IN CHAPTER XIVB. THEREFORE FOR MAKING AN ASSESSMENT U./S 158BC OF THE ACT R.W.S. 144 OF THE ACT,THEREQUIREMENTS LAID DOWN IN SEC.144OF THE ACT WILL HAVE TO BESATISFIED. ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE9 16.THE LD. COUNSELFORTHE ASSESSEEDREWOUR ATTENTIONTOTHE DECISION OFTHE HONBLE SUPREME COURT IN THE CASE OF ACIT VS HOTEL BLUE MOON 321 ITR 362 (SC). IN THE AFORESAID DECISION THE QUESTION THAT AROSE FOR CONSIDERATION BEFORE THE HONBLE SUPREME COURT WAS AS TO WHETHER ISSUE OF NOTICE U/S 143(2) OF THE ACT IS MANDATORY BEFORE MAKING THE ASSESSMENT U/S 158BC R;W.S. 143(3) OF THE ACT. THE HONBLE SUPREMECOURT HELDASFOLLOWS :- IF THE ASSESSING, FOR ANY REASON, REPUDIATES THE RETURN FILED BY AN ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 158BC (A) OF THE INCOME TAX ACT, 1961 RELATING TO A BLOCK ASSESSMENT, THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDERSECTION 143(2) OFTHE ACT WITHIN THE TIME PRESCRIBED INTHE PROVISO TO SECTION 143(2). BY MAKING THE ISSUE OF NOTICE MANDATORY, SECTION 158BC, DEALING WITH ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOUNDATION FOR JURISDICTION. SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCOME. SECTION 158BC PROVIDES FOR ENQUIRY AND ASSESSMENT. AFTER THE RETURN IS FILED, CLAUSE (B) OF SECTION 158BC PROVIDES THAT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND 'THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FAR AS MAY BE, APPLY. THIS INDICATES THAT THIS CLAUSE ENABLES THE ASSESSING OFFICER, AFTER THE RETURN IS FILED, TO COMPLETE THE ASSESSMENT UNDER SECTION 143(2) BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER SECTION 143(2)/142. THIS DOES NOT PROVIDE ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143(1)(A) : THE OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) ONLY. IF AN ASSESSMENT IS TO BE COMPLETED UNDER SECTION 143(3) READ WITH SECTION 158BC, NOTICE UNDER SECTION) 43(2)SHOULD BE ISSUED WITHIN ONE YEARFROMTHE DATEOFFILING OF THE BLOCK RETURN. OMISSION ON THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143 (2) CANNOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH. 17. THE LD. COUNSEL SUBMITTED THAT THOUGH THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS WITH REGARD TO THE NECESSITY OF NOTICE U/;S 143(2) OF THE ACT, THE HONBLE SUPREME COURT HAS ALSO MADE A REFERENCE TO THE PROVISION U/S 142 OF THE ACT AND HAS HELD THAT HIS SUBMISSION WAS THAT THE ABSENCE OF NOTICE U/S 142(1) OF THE ACT WILL ALSO RENDER THE ORDER OF ASSESSMENT NULLITY AS HELD BY THE HONBLE SUPREME COURT. IN THE CASE OF HOTEL BLUEMOON (SUPRA). 18. THE LD. DR FURTHER SUBMITTED THAT THE OBSERVATIONS OF THE HONBLE SUPREME COURT WITH REGARD TO THE PROVISION OF SECTION 142 OF THE ACT ARE ONLY ARBITRARY AND SHOULD NOT BE APPLIED FOR NON ISSUE OR NON SERVICE OF NOTICEU/S 142(1) OF THE ACT AND HAVE COME TO THE CONCLUSION THAT ORDER OF ASSESSMENT U/S 158BC OF THE ACT IS NOT VALID FOR WANT OF SERVICE OF NOTICE U/S 142(1) OF THE ACT. THE LEARNED DR SUBMITTED THAT THE NOTICE U/S.158BC ITSELF SERVES THE PURPOSE OF SEC.142(1) NOTICE AND THEREFORE THE 2ND PROVISO TO SEC.144(1)WOULD APPLYIN THE PRESENTCASE. ACCORDING TOHIMTHEREFORE THE ORDERU/S.144 OFTHEACTWAS RIGHTLYPASSED BYTHE AO. 19. WE HAVE CONSIDERED HIS SUBMISSION AND ARE OF THE VIEW THAT THE SAME IS WITHOUT ANY MERIT. SEC.158BC(B) CLEARLY CONTEMPLATES APPLICABILITY OF PROVISIONS OF SEC.142 OF THE ACT FOR FRAMING A ORDER OF ASSESSMENT UNDER SEC.158BC OF THE ACT UNDER CHAPTERXIV BOF THEACT.THEPROVISIONS OF SEC.158BC READSTHUS: ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE10 SEC.158BC PROCEDUREFOR BLOCKASSESSMENT WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER SECTION 132A, IN THE CASEOF ANYPERSON,THEN, (A)THE ASSESSINGOFFICER SHALL (I) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30TH DAY OF JUNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESSTHANFIFTEEN DAYS; (II) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER THE 1ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS BUT NOTMORETHANFORTYFIVE 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 THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD: PROVIDED THAT NO NOTICE UNDER SECTION 148 IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDERTHIS CHAPTER: PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BEENTITLEDTOFILE AREVISED RETURN; (B) THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143, SECTION 144 AND SECTION145 SHALL,SOFAR ASMAYBE, APPLY; (C) THE ASSESSING OFFICER, ON DETERMINATION OF THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN ACCORDANCE WITH THIS CHAPTER, SHALL PASS AN ORDER OF ASSESSMENT AND DETERMINE THE TAX PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT; (D) THE ASSETS SEIZED UNDER SECTION 132 OR REQUISITIONED UNDER SECTION 132A SHALL BE DEALT WITH IN ACCORDANCE WITH THEPROVISIONS OF SECTION 132B. 20. IT IS THUS CLEARTHAT NOTICE U/S.158BC OF THE ACT WILL NOT BE SUFFICIENT COMPLIANCE OR SUBSTITUTE FOR ISSUE OF NOTICE U/S.142 OF THE ACT. NON COMPLIANCE OF TERMS OF A NOTICE U/S.142(1) OF THE ACT HAS CONSEQUENCES SET OUT IN SEC.144 OF THE ACT. THEREFORE THE 1ST PROVISO TO SEC.144(1) OF THE ACT CONTEMPLATES SERVICE OF A SPECIFIC NOTICE BRINING TO THE NOTICE OF THE ASSESSEE THE CONSEQUENCES OF NON COMPLIANCE WITH THE TERMS OF THE NOTICE U/S.142(1) OF THE ACT. THE 2ND PROVISO TO SEC.144(1) PROVIDES THAT THE 1ST PROVISO TO SEC.144(1) WILL NOT APPLY IF A NOTICE U/S.142(1) WAS ALREADY SERVED ON THE ASSESSEE. THIS IS BECAUSE IN THE FORM OF NOTICE U/S.142(1) OF THE ACT, THERE IS A SPECIFIC CLAUSE WHICH SAYS THAT FAILURE TO COMPLY WITH THE SAID NOTICE WILL RESULT IN AN EX-PARTE ASSESSMENTBEING PASSED. 21. A READING OF THE HONBLE SUPREME COURTS DECISION IN THE CASE OF HOTEL BLUE MOON (SUPRA) CLEARLY SHOWS THAT THOUGH THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS WITH REGARD TO THE EFFECT OF NON ISSUE OF SERVICE OF NOTICE U/S 142(3) OF THE ACT ON THE ORDER OF ASSESSMENT PASSED U/S 158BC OF THE ACT THE HONBLE SUPREME COURT HAS ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE11 EXAMINED THE PROCEDURAL REQUIREMENT FOR FRAMING THE ASSESSMENT U/S 158BC OF THE ACT.THIS WILL BE CLEARFROMTHEFOLLOWING OBSERVATIONS OF THEHONBLE SUPREME COURT:- WE MAY NOW REVERT BACK TO SECTION 158BC(B) WHICH IS THE MATERIAL PROVISION WHICH REQUIRES OUR CONSIDERATION. SECTION 158BC(B) PROVIDES FOR ENQUIRY AND ASSESSMENT. THE SAID PROVISION READS 'THAT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, SUB- SECTIONS (2) AND (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FAR AS MAY BE, APPLY.' 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 SECTION, 143(2)/142 AND COMPLETE THE ASSESSMENT SECTION 143(3). THIS SECTION DOES RIOT 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 SECTION 143(2)/142, THE ASSESSING OFFICER IS AUTHORIZED TO COMPLETE THE ASSESSMENT EX PARTE UNDER SECTION 144. CLAUSE (B) OF SECTION 158BC 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(4). 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 SECTION 143(2) CANNOT BEDISPENSEDWITH. ACCORDINGLY, WE CONCLUDE THAT EVEN FOR THE PURPOSE OF CHAPTER-XIV-B OF THE ACT, FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF SECTION 158BC, 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. (IN BOLD LETTERSFOR EMPHASIS) 22. IT IS THUS CLEAR THAT THE PROVISION TO SECTION 142 OF THE ACT ALSO REQUIRES TO BE COMPLIED BY THE AO WHILE FRAMING THE ASSESSMENT U/S 158BC OF THE ACT. NON ISSUE AND NON SERVICE OF NOTICE U/S 142(1) AS WELL AS IN THE FIRST PROVISO U/S 144(1) CANNOT BE REGARDED AS PROCEDURAL IRREGULARITY WHICH IS CURABLE. THEREFORE THE EFFECT OF SUCH IRREGULARITY WOULD BE THAT THE ASSESSMENT WILL HAVE TO BE HELD TO BE NOT VALID IN LAW AND IS LIABLE TO BE ANNULLED. NON COMPLIANCE WITH THE AFORESAID REQUIREMENT WHICH CONFER THE JURISDICTION OF THE AO WOULD RENDER THE ORDER PASSED BY THE AO AS INVALID IN LAW AND SUCH ORDER OF ASSESSMENT IS LIABLE TO BE ANNULLED. WE ALSO FIND SUPPORT FROM THE AFORESAID CONCLUSIONS FROM THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF MOHINI DEVI MALPANI VS ITO 77ITR 674(CAL). 23. FOR THEREASONSGIVEN ABOVE WE HOLD THAT THEORDER U/S 158BC OF THEACT IS BAD IN LAW AND LIABLE TO BE ANNULLED. IN PARTICULAR, WE ARE OF THE VIEW THAT THE STATUTORY REQUIREMENT OF FRAMING THE ASSESSMENT U/S 144 OF THE ACT HAVE NOT BEEN COMPLIED WITH AS CONTENDED BY THE ASSESSEE IN GROUND NO.2AC OF THE CROSS OBJECTION. FOR THE REASONSGIVEN ABOVE WE ANNUL THE ORDEROF ASSESSMENT. ITA NO.101 TO108/GAU/2018 A.YS. 09-10 TO15-16 M/SS.K. SAHA &M/SRANJIT KR. SAHA VS. ACIT, AGR PAGE12 24. ONE OF THE ARGUMENT OF THE LEARNED DR WAS THAT THE OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA), IN SO FAR AS IT RELATES TO SEC.142 OF THE ACT, ARE ONLY OBITER DICTUM AND THEREFORE SHOULD NOT BE REGARDED AS JUDICIAL PRECEDENT. WE ARE UNABLE TO AGREE WITH THIS ARGUMENT. EVEN ASSUMING THE IT(SS)A.NO.92/KOL/2008 & C.O.63/KOL/2008 SHRI RAMESH CHAND RATHI BLOCK PERIOD 1991-92 TO 2000- 01 OBSERVATIONS OF THE HONBLE SUPREME COURT ARE OBITER DICTUM, YET THE SAMEHAS ABINDINGFORCE ASFARASTHETRIBUNAL IS CONCERNED. 6. WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO QUASH THIS BEST ASSESSMENT IN ASSESSMENT YEAR 2015-16 FORMING SUBJECT-MATTER OF ITA 108/GAU/2018. 7. THESEASSESSEES APPEALSAREALLOWEDIN ABOVETERMS. ORDERPRONOUNCEDINTHEOPENCOURT 12/07/2019 SD/- SD/- ( ' ) ( ' ) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP ' ' - 12/07 /201 9 ' \ / COPY OF ORDER FORWARDED TO:- 1 . /ASSESSEE-M/S SUBRATAKR. SAHA/M/S RANJIT KR.SAHA,OLDTHANA ROAD, BANAMALIPUR, AGARTALA-799001 2. /REVENUE-ACIT, CIRCLE-AGARTALA,TRIPURA 3. - ' ] ] ' /CONCERNEDCIT GUWAHATI 4. ] ] - / CIT (A) GUWAHATI 5. ' ' ' , ] \ ' \ ' , ' ' / DR,ITAT,GUWAHATI 6. ' [ /GUARDFILE. BYORDER/ , SR. PRIVATE SECRETARY(ONTOUR) ] \ ' \ ' ,