VASHDEV G ADNANI, MUMBAI V. ACIT 19(1), MUMBAI

ITA 2321/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2963 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-08-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNISH K ARVIND
• Keywords: Principle of natural justice; Validity of assessment; Block assessment; Revised return; Documents seized
• Section: 143(3); 153A; 147; 148; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH , MUMBAI BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER . ITA. NO. 2321 / M UM /20 1 4 (ASSESSMENT YEAR: 2 0 0 2 - 0 3 ) VASHDEV G. ADNANI APPELLANT G - 4, SEA CREST - 2, GR. FLOOR, SEVEN BUNGALOWS GARDENS, ANDHERI (WEST), MUMBAI - 400061 . VS. A CIT , CIRCLE - 19 (1) RESPONDENT MUMBAI. PAN: ABAPA 7414M / BY APPELLANT : SHRI PRAKASH PANDIT , A.R. / BY RESPONDENT : SHRI RAJNISH K. ARVIND , D.R. / DATE OF HEARING : 18 . 0 8 .201 6 / DATE OF PRONOUNCEMENT : 14. 0 9 .201 6 ORDER PER RAJE SH KUMAR , A . M: THE ONLY EFFECTIVE GROUND TAKEN BY THE ASSESSEE IS GROUND NO.2 WHICH IS AGAINST THE NON CONSIDERING OF ADDITIONAL GROUND RAISED BY THE ASSESSEE VIDE LETTER DATED 27.10.2008 RAISING THE ISSUE THAT THE ASSESSMENT ORDER PASSED U/S.143(3) R.W. S. 147 IS BARRED BY LIMITATION AS THE SAME WAS PASSED ON 29.12.2006 I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 2 AGAINST THE DUE DATE AND LAST DATE OF PASSING THE ASSESSMENT ORDER BEING 31.03.2006 AS PER THE PROVISIONS OF SECTION 153 OF THE INCOME TAX ACT, 1961. 2 . THE FACTS IN BRIEF ARE THAT THE AS SESSEE WAS SEARCHED U/S 132 OF THE ACT WHEREAS THE ASSESSMENT AFTER SEARCH PROCEEDINGS WAS FRAMED U/S 143(3) READ WITH SECTION 148 INSTEAD OF 143(3) READ WITH 153A. AT THE OUTSET , LEARNED AR APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUBMITTED BEFORE US THAT THE ISSUE OF ASSESSMENT BEING BARRED BY LIMITATION HAS BEEN DECIDED BY THE DECISION OF CO - ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.2968/M/2011 I N ASSESSMENT YEAR 2004 - 05 VIDE ORDER DATED 19.01.2015 IN THE SAME SEARCH PROCEE DINGS WHEREIN IT HAS BEEN HELD THAT ASSESSMENT AS FRAMED BY THE AO WAS INVALID AND BARRED BY LIMITATION. T HE LEARNED DR HAS FAIRLY AGREED WITH THE SUBMISSION S OF LEARNED AR THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AS STATED ABOVE. 3. AFTER HEA RING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED IN GROUND NO.2 BY THE ASSESSEE QUA THE ASSESSMENT ORDER PASSED IS BARRED BY LIMITATION AS THE SAME WAS PASSED AFTER THE LAST DATE ON WHICH THE ORDER SHOULD HAVE B EEN PASSED BY THE AO. THE ISSUE HAS BEEN SETTLED BY THE COORDINATE BENCH IN THE EARLIER YEARS IN THE ASSESSEE OWN CASE IN ITA NO 2968/M/2011 (SUPRA) IN THE SAME SEARCH ASSESSMENT. THE OPERATIVE PART OF THE DECISION OF THE CO - ORDINATE BENCH IS REPRODUCED A S UNDER: I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 3 4. CONSIDERING THE AB OVE , WE ARE OF THE OPINION THAT ONE OF THE ISSUES FOR DETERMINATION IS WHETHER THE PRESENT PROCEEDINGS WHICH WERE TAKEN IN PURSUANCE OF NOTICE U/S.148 DATED 20.02.2006 FOR AY.S.1999 - 2000,2000 - 01,2001 - 02 &2004 - 05 CAN BE TREATED AS PROCEEDINGS U/S. 153A OF THE ACT AND ACCORDINGLY CAN BE RECTIFIED U/S. 292B OF THE ACT,AS STATED IN THE CROSS OBJECTIONS OF THE AO FILED ON 01.12.2008.SECOND ISSUE IS WHETHER THE RE - ASSESSMENT PROCEEDINGS INITIATED BY THE AO WERE VALID ? ONE OF THE QUE STIONS FOR THE AY. 2005 - 05 IS AGAIN THE VALIDITY OF THE ASSESSMENT.IN THAT MATTER THE AO HAD ISSUED THE NOTICE U/S.147 DURING THE PENDENCY OF THE ASSESSMENT PROCEEDINGS,THOUGH A NOTICE U/S.143(2) OF THE ACT WAS ISSUED BY THE AO IN PURSUANCE OF THE VALID RE TURN FILED BY THE ASSESSEE ON 30/10/2004. 4.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD.WE FIND THAT THE AO,VIDE HIS CROSS OBJECTIONS DATED 01.12.2012,HAS ARGUED THAT THE ASSESSMENTS COMPLETED U/S.148 SHOULD BE TREAT ED AS ASSESSMENT FINALISED U/S.153A OF THE ACT.IT CLEARLY INDICATES THAT AN ACTION 132/132A WAS TAKEN IN THE CASE UNDER CONSIDERATION.BUT,IN RESPONSE TO A QUERY RAISED UNDER RTI ACT ON 7/12/2012 BY THE ASSESSEE,THE AO HAD STATED THAT NO SEARCH WAS CONDUCTE D IN THE CASE UNDER APPEAL AND THAT NO PANCHANAMA WAS DRAWN.THUS,TWO DIAGONALLY OPPOSITE STANDS HAVE BEEN TAKEN BY THE AO.IT IS BEYOND OUR COMPREHENSION AS TO HOW THE SAME OFFICER CAN SAY THAT SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE IN ONE BREATH AND IN ANOTHER HE DENIES THE SAME FACT.FROM THE DOCUMENTARY EVIDENCES AVAILABLE ON THE FILES IT IS CLEAR THAT AN ACTION U/S.132A OF THE ACT WAS CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT IN THE CASE OF THE ASSESSEE AND A PANCHNAMA WAS ALSO DRA WN.THEREFORE,THE STANDS TAKEN BY THE JCIT AND THE AO IN THE FORWARDING LETTER OF THE REMAND REPORT AND IN FURNISHING REPLY TO THE ASSESSEE WITH REGARD TO RTI ACT RESPECTIVELY ARE FACTUALLY INCORRECT. 4.2. ONCE,IT IS ESTABLISHED THAT IT IS A SEARCH - CASE,THE N IT HAS TO BE HELD THAT IT WOULD TO BE GOVERNED BY THE PROVISIONS OF SECTION 153A OF THE ACT,AS THE ACTION U/S.132A WAS TAKEN AFTER 31.05.2003. EXPLAINING THE SCOPE OF THE SECTION 143A,THE HONBLE JHARKHAND HIGH COURT HAS,IN THE CASE OF ABHAY KUMAR SHROF F (290ITR114),HELD AS UNDER: FROM A BARE READING OF THE PROVISIONS OF SECTIONS 153A, 153B AND 153C OF THE INCOME - TAX ACT, 1961 AND THE DEPARTMENTAL CIRCULAR NO. 7 DATED SEPTEMBER 5, 2003, IT IS MANIFESTLY CLEAR THAT AFTER MAY 31 ,2003,THE EARLIER PROVIS ION OF BLOCK ASSESSMENT IN THE CASE OF SEARCH INITIATED AGAINST THE ASSESSEE, SHALL NOT APPLY. INSTEAD, THE PROVISION THAT THERE SHALL BE SINGLE ASSESSMENT ON UNDISCLOSED INCOME COMPRISING PREVIOUS YEARS RELATING TO SIX ASSESSMENT YEARS PRECEDING THAT IN W HICH THE SEARCH WAS CONDUCTED, SHALL APPLY. IT FURTHER PROVIDES THAT THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELATING TO THE PREVIOUS YEAR IN I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 4 WHICH THE SEARCH WAS CONDUCTED UNDER SECTION 132 OR REQUISITION WAS MADE UNDER SECTION 132A OF THE ACT. THE SECOND PROVISO TO SECTION 153A MAKES IT CLEAR THAT ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN TH E PERIOD OF SIX ASSESSMENT YEARS PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A SHALL ABATE. IN OTHER WORDS, IF ON THE DATE OF INITIATION OF SEARCH OR REQUISITION UNDER SECTION 132 OR SECTION 132A ANY AS SESSMENT OR REASSESSMENT PROCEEDING IS INITIATED RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS, IT SHALL STAND ABATED AND THE ASSESSING AUTHORITY CANNOT AND SHALL NOT PROCEED WITH SUCH PENDING ASSESSMENT AFTER INITIATION OF SEARCH OR REQUISITION. THE WORD ABATEMENT MEANS THE ACT OF ELIMINATING OR NULLIFYING OR SUSPENSION OR DEFEAT OF A PENDING ACTION. HONBLE DELHI HIGH COURT IN THE CASE OF SARAYA INDUSTRIES LTD.HAS (306ITR189)INCORPORATED SOME MORE PRINCIPLES RELATED WITH THE SECTION IN FOLLOWING MANNER: THE OPENING PORTION OF SECTION 153A OF THE INCOME - TAX ACT, 1961, MAKES IT CLEAR THAT IT APPLIES TO A PERSON IN RESPECT OF WHOM A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT, OR WHOSE BOOKS OF ACCOUNT, OTHER DOCUM ENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER MAY 31, 2003. SECTION 153C OF THE ACT IS WITH REFERENCE TO A PERSON IN RESPECT OF WHOM ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG. THE PERSONS MENTIONED IN SECTION 153A OF THE ACT ARE SPECIFICALLY EXCLUDED FROM SECTION 153C OF THE ACT. THE PROCEDURE THAT IS SOUGHT TO BE FOLLOWED IN RESPECT OF THESE TWO CATEGORIES OF PERSONS HAS BEEN PROVIDED FOR IN SECTIONS 15 3A AND 153C OF THE ACT. THAT THE PROCEDURE IN RESPECT OF BOTH OF THEM OVERLAPS OR IS SIMILAR IS HARDLY OF ANY CONSEQUENCE, SINCE BOTH HAVE TO BE TREATED IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. IT IS CLEARLY MENTIONED IN THE SUBSTANTIVE PORTIO N OF SECTION 153C(1) OF THE ACT THAT THE ASSESSING OFFICER SHALL PROCEED AGAINST A PERSON COVERED BY THE SECTION BY ISSUING A NOTICE TO HIM FOR THE PURPOSE OF ASSESSING OR REASSESSING HIS INCOME. THE VERY FACT THAT NOTICE IS REQUIRED TO BE ISSUED CLEARLY P OSTULATES THAT THE PRINCIPLES OF NATURAL JUSTICE ARE INCORPORATED IN THE PROVISION. THERE IS NOTHING ARBITRARY IN THE PROCEDURE ADOPTED. ESSENTIALLY BOTH THE CATEGORIES OF PERSONS ARE THE SAME INASMUCH AS THEIR BOOKS OF ACCOUNT, ASSETS, DOCUMENTS, ETC., AR E SEIZED OR REQUISITIONED, THOUGH FROM DIFFERENT LOCATIONS. MOREOVER, THE SEIZURE OR REQUISITION MUST BE OF SUCH A CHARACTER AS TO PERSUADE THE ASSESSING OFFICER TO EVEN REOPEN CLOSED ASSESSMENTS.IN THIS SENSE,THERE IS NO HOSTILE DISCRIMINATION BETWEEN THE TWO CATEGORIES OF PERSONS. FROM THE ABOVE IT IS CLEAR THAT FOR THE ACTIONS TAKEN W.E.F.01.06.2003,ASSESSMENTS WILL HAVE TO BE COMPLETED AS PER THE SCHEME OF SECTION 153A.THE SECTION PROVIDES FOR ISSUING OF NOTICE FOR I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 5 ASSESSING OR REASSESSING THE INCOME O F AN ASSESSEE.FROM THE RECORDS AND THE GROUNDS OF CO.S.IT CLEAR THAT THOUGH IN THE CASES UNDER CONSIDERATION NOTICES HAD TO BE ISSUED U/S.153 A OF THE ACT,BUT WERE NOT ISSUED.THE AO HAD ISSUED NOTICES U/.148 OF THE ACT.ISSUE OF NOTICE U/S.153A AND 148 HAS BEEN DECIDED BY THE HONBLE M P HIGH COURT,IN THE CASE OF RAMBALLABH GUPTA (288ITR347),AS UNDER: IN ORDER TO DECIDE THE LEGALITY AND VALIDITY OF THE NOTICE ISSUED UNDER SECTION 148 OF THE INCOME - TAX ACT, 1961, IT IS NECESSARY TO SEE AS TO WHETHER THE CON DITIONS PRECEDENT PROVIDED IN SECTION 148 ARE SATISFIED OR NOT. ONCE THE CONDITIONS PRESCRIBED UNDER SECTION 148 ARE FOUND PRESENT IN THE NOTICE ISSUED, IN THAT EVENT, THE NOTICE HAS TO BE UPHELD HAVING BEEN ISSUED IN CONFORMITY WITH THE REQUIREMENT OF SEC TION 148. THE ONLY FETTER PUT ON THE POWERS OF THE ASSESSING OFFICER IN TAKING RECOURSE TO SECTION 148 IS THAT IT CANNOT BE ISSUED IN RELATION TO THOSE SIX ASSESSMENT YEARS WHICH ARE DEFINED IN SECTION 153A.(EMPHASIS SUPPLIED) IN ALL OTHER CASES AND FOR AL L OTHER ASSESSMENT YEARS SECTION 148 CAN ALWAYS BE RESORTED TO SUBJECT OF COURSE TO THE CONDITION THAT IT MUST SATISFY THE REQUIREMENT SPECIFIED IN SECTION 148. 4.3. NOW,WE WOULD TAKE UP THE ISSUE AS TO WHETHER THE PROVISIONS OF SECTION 292 B CAN BE INVOKE D FOR TREATING THE RE - ASSESSMENT PROCEEDINGS AS PROCEEDINGS U/S.153A OF THE ACT,AS ARGUED BY THE REVENUE.SECTION 292B OF THE ACT,WHICH SAYS THAT NO RETURN OF INCOME FURNISHED UNDER THE ACT SHALL BE INVALID MERELY BY REASON OF ANY MISTAKE,DEFECT OR OMISSION IN SUCH RETURN OF INCOME, IF IT, IN SUBSTANCE AND EFFECT,IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT, WAS INTRODUCED INTO THE ACT WITH EFFECT FROM 01.10.1975.IN THE STATEMENT OF OBJECTS AND REASONS, PUBLISHED IN THE GAZETTE DAT ED 09.05 1973,FOR BILL NO.34 OF 1973 - 89 ITR(ST.)33),IT IS STATED, AT CLAUSE 80, REFERRING TO SECTION 292B,THAT IT SEEKS TO PROVIDE AGAINST PURELY 'TECHNICAL OBJECTIONS' WITHOUT SUBSTANCE COMING IN THE WAY OF THE VALIDITY OF ASSESSMENT PROCEEDINGS, ETC.IN T HE DEPART - MENTAL CIRCULAR NO. 179DATED 30.09. 1975 - 102ITR(ST.)28), EXPLAINING THE SCOPE OF SECTION 292B, IT IS STATED THAT THE PROVISION HAS BEEN MADE TO PROVIDE AGAINST PURELY TECHNICAL OBJECTIONS WITH - OUT SUBSTANCE COMING IN THE WAY OF THE VALIDITY OF ASSESSMENT PROCEEDINGS, ETC.COURTS HAVE HELD THAT IT WAS NOT RETROSPECTIVE.OVER THE YEARS THE LAW REGARDING THE PROVISIONS OF SECTION 292 B HAVE EVOLVED AND IT HAS TAKEN A DEFINITE SHAPE.HERE,WE WOULD LIKE TO MENTION CERTAIN PRINCIPLES GOVERN - ING THE SEC TION 292B AND SAME CAN BE SUMMARISED AS UNDER: I.) IF AN ASSESSEE DOES NOT FILE HIS RETURN OF INCOME IN THE PRESCRIBED FORM AS ENVISAGED BY THE PROVISIONS OF THE ACT,THE RETURN FILED BY HIM HAS TO BE IGNORED AS NOT FILING OF RETURN IS NOT CURABLE BY THE PR OVISIONS OF SECTION 292B OF THE ACT. II.) AN IRREGULARITY IN NOT SCORING OUT PORTIONS OF THE FORM OF WARRANT OF SEARCH DOES NOT AFFECT THE EXERCISE OF THEIR POWER BY THE AUTHORITIES.IN ANY CASE,SUCH DEFECT WOULD BE CURED BY SECTION 292B. I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 6 III.) THE SIGNING OF A NOTICE ISSUED UNDER S.271(1)(A) OF THE ACT,FOR SHOWING CAUSE WHY PENALTY SHOULD NOT BE IMPOSED ON THE ASSESSEE FOR DELAY IN FILING RETURNS,IS NOT A MERE INCONSEQUENTIAL TECHNICALITY.IT IS A REQUIREMENT OF THE PROVISIONS OF O.5, R. 1(3) OF THE CIVIL PROC EDURE CODE, 1908, WHICH ARE APPLICABLE BY VIRTUE OF THE PROVISIONS OF SECTION 282 OF THE ACT.SECTION 282 OF THE ACT PROVIDES THAT A NOTICE UNDER THE ACT MAY BE SERVED ON THE PERSON NAMED THEREIN AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CPC,1908. SUB - RULE (3) OF R. 1 OF O. 5 OF THE CPC PROVIDES THAT EVERY SUMMONS SHALL BE SIGNED BY THE JUDGE OR SUCH OFFICER AS HE APPOINTS.THEREFORE, IN VIEW OF THIS PROVISION, THE NOTICE TO SHOW CAUSE WHY PENALTY SHOULD NOT BE LEVIED BY THE ITO SHOULD BE SIGNED BY T HE AO AND THE OMISSION TO DO SO INVALIDATES THE NOTICE AND IN SUCH A SITUATION SECTION 292 B WILL NOT COME TO RESCUE OF THE AO. IV.) SECTION 292B MIGHT APPLY TO A CASE WHERE SERVICE OF NOTICE HAD ALREADY BEEN EFFECTED AND THERE IS ONLY A TECHNICAL MISTAKE IN THE NOTICE.BUT,WHERE NO NOTICE HAD BEEN SERVED,THE SECTION WOULD NOT COME TO THE HELP OF THE DEPARTMENT E.G.IF A NOTICE IS NOT ISSUED TO A MINOR OR TO HIS GUARDIAN OR THE KARTA OF THE HUF AND SUCH NOTICE AFFECTS THE RIGHTS OF THE MINOR ADVERSELY,THE PRO CEEDINGS INITIATED IN PURSUANCE OF THAT NOTICE CANNOT BE CURED BY THE PROVISIONS OF SECTION 292B OF THE ACT. V.) WHERE AN ASSESSMENT ORDER CONTAINING COMPUTATION OF INCOME IS SIGNED BY THE AO,BUT THE COMPUTATION OF TAX MADE ON SEPARATE SHEET OF PAPER IS NOT SIGNED BY HIM,THE ASSESSMENT CANNOT BE HELD INVALID.IN SUCH CASES,COURTS ARE OF THE VIEWS THAT IT IS NOT A CASE OF NON - COMPLIANCE WITH MANDATORY PROVISION.SUCH AN ASSESSMENT CANNOT BE HELD INVALID BECAUSE OF THE EXISTING PROVISIONS OF SECTION 292B OF THE ACT. VI.) A COMPOSITE NOTICE ASKING AN ASSESSEE TO PAY BALANCE ADVANCE TAX AND STATING THAT ON FAILURE TO PAY ASSESSEE TO SHOW CAUSE WHY PENALTY SHOULD NOT BE LEVIED IT HAS BEEN HELD VALIDHAVING REGARD TO THE PURPORT OF THE NOTICE AND THE PROVISIONS OF SEC TION 292B. VII.) CONVERTING THE PROCEEDING UNDER SECTION 147(B) INTO A PROCEEDING UNDER SECTION 147(A) OF THE ACT,IS INVALID.IT IS SAID THAT SECTION 292B DOES NOT EMPOWER THE AO TO TREAT A PROCEEDING TAKEN UNDER ONE SECTION AS A PROCEEDING UNDER ANOTHER S ECTION,THAT IT IS NOT A MERE TECHNICALITY, BUT, WAS A QUESTION OF JURISDICTION. VIII.) IN CASE OF AN ASSOCIATION OF PERSONS IF A NOTICE FOR NOT FURNISHING RETURN OF INCOME IS ISSUED TO AN INDIVIDUAL WITHOUT SPECIFYING WHETHER IT WAS ISSUED TO PRINCIPAL OFFICER OR MEMBER OF AOP, THEN THE AO IS NOT COMPETENT TO RE - ASSESS THE INCOME OF THE AOP CONSISTING OF THAT PERSON AND OTHERS.DEFECT IN ISSUE OF NOTICE IN SUCH A CASE COULD NOT BE CURED BY RELIANCE ON SECTION 292B OF THE ACT. IX.) IN CASE OF A DECEASED ASS ESSEE IF THE LEGAL REPRESENTATIVES ARE IMPLEADED AND HEARD AND AFTER THAT IF THE ASSESSMENT ORDER IS I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 7 PASSED IN THE NAME OF THE DECEASED INSTEAD OF THE LEGAL HEIRS, THE ORDER HAS TO BE TAKEN AS A CLERICAL MISTAKE IN LIGHT OF THE PROVISIONS OF THE SECTION UNDER CONSIDE - RATION. X.) THE TRIBUNAL HAS NO POWER TO ENHANCE THE ASSESSMENT,BUT THAT DOES NOT MEAN THAT AN ORDER WHICH IS SET ASIDE BY THE FIRST APPELLATE AUTHORITY CANNOT BE RESTORED.IN CASE OF ANY MISTAKE OR ERROR, THE TRIBUNAL HAS THE POWER TO HAVE RE COURSE TO SECTION 292B OF THE ACT.(224ITR57). XI.) THE PROVISION IN SECTION 139(9)OVERRIDES THE OTHER PROVISIONS OF THE ACT INCLUDING SECTION 292B OF THE ACT. XII.) ACCORDING TO SECTION 140 OF THE ACT, EVERY RETURN HAS TO BE SIGNED AND VERIFIED.THE WORD 'SHA LL' HAS BEEN USED IN THE SECTION WHICH SHOWS THAT IT IS MANDATORY THAT EVERY RETURN SHOULD BE SIGNED AND VERIFIED AND IF IT IS NOT SIGNED AND VERIFIED, THEN IT IS IN BREACH OF THE PROVISIONS OF SECTION 140 OF THE ACT.THEREFORE,THIS CANNOT BE A DEFECT WHICH CAN BE CURED AS PER THE PROVISIONS OF SECTION 292B OF THE ACT AND ANY RETURN FILED WITHOUT SIGNATURE AND VERIFICATION OF THE ASSESSEE WILL NOT BE TREATED AS A VALID RETURN. XIII.) TIME BARRING ASSESSMENT DOES NOT COME WITHIN THE PURVIEW OF MISTAKE,DEFECT O R OMISSION REFERRED IN SECTION 292B OF THE ACT.IN PEERU LAL,MOHAN LAL (257ITR198),HONBLE RAJASTHAN HIGH COURT HELD THAT THE EXPRESSION MISTAKE, DEFECT OR OMISSION CANNOT BE UNDERSTOOD AS ONE OF PROCEDURE,SO AS TO OVERRIDE THE LIMITATION PRESCRIBED BY LA W. XIV.) CANCELLING THE REGISTRATION OF THE FIRM ON THE GROUND OF ERROR IN THE ALLOCATION OF SHARES AMONG THE PARTNERS,WITHOUT ISSUING NOTICE UNDER SECTION 158R.W.S.187 AND 67 OF THE ACT PROPOSING TO CHANGE THE SHARE ALLOCATION AMONG THE PARTNERS,INVOLVES Q UESTION OF JURISDICTION AND THEREFORE DIRECTION GIVEN TO AO TO MODIFY THE ORDER U/S.158 CANNOT BE SUSTAINED BY RELYING ON SECTION 292B. XV.) PROVISIONS RELATING TO ISSUE OF NOTICE FOR BLOCK PERIOD ARE CONSIDERED PROCEDURAL AND NOT SUBSTANTIVE IN NATURE.THER EFORE MENTION OF BLOCK PERIOD WRONGLY IN NOTICE CANNOT RENDER ENTIRE ASSESSMENT A NULLITY AS THE DEFECTS ARE CURABLE UNDER SECTION 292B.SECONDLY,IN BLOCK ASSESSMENT IF A NOTICE IS ISSUED UNDER SECTION 158BC R.W.S.158BD OF THE ACT AND THE AO FAILS TO MENTIO N SEC. 158BD IN THE NOTICE,IT IS NOT CONSIDERED FATAL.IT IS SAID THAT THE DEFECT IN MENTIONING A PARTICULAR SECTION IS CURABLE UNDER SECTION 292B AND CONSEQUENT BLOCK ASSESSMENT ORDER IS CONSIDERED WITHIN JURISDICTION. XVI.) AFTER INSERTION OF SECTION 292 B OF THE ACT,AN APPEAL CANNOT BE DISMISSED DUE TO DEFECT IN MEMORANDUM,BECAUSE IT IS ONLY A TECHNICAL DEFECT AND CAN BE CURED. XVII.) PENALTY PROCEEDINGS CANNOT BE HELD INVALID BECAUSE THE AO HAD NOT STRUCK OFF THE COLUMN FOR WHICH THE ASSESSEE WAS NOT REQUI RED TO GIVE REPLY. XVIII.) IF A RETURN OF COMPANY IS NOT SIGNED BY MANAGING DIRECTOR BUT BY A PERSON AUTHORISED BY BOARD RESOLUTION THE DEFECT IN SIGNING THE RETURN IS CURABLE UNDER SECTION 292B. I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 8 XIX.) UNDER SECTION 151 OF THE ACT,IT IS ONLY THE JOINT COMMI SSIONER OR ADDITIONAL COMMISSIONER, WHO COULD GRANT THE APPROVAL FOR ISSUE OF NOTICE U/S.148 AND IN SUCH CASES IF THE APPROVAL IS GRANTED BY THE COMMISSIONER IT IS NOT AN IRREGULARITY THAT IS CURABLE BY SECTION 292B.COURTS HAVE HELD THAT SUCH NOTICES ARE I NVALID. XX.) GENERAL MISTAKES IN FILING RETURN ARE PROTECTED BY THE SECTION 292 B OF THE ACT E.G.IF FOUR UNITS OF A COMPANY FILE SEPARATE RETURNS AT SAME TIME DISCLOSING LOSSES AND SUBSEQUENTLY A CONSOLIDATED RETURN INCORPORATING LOSS OF ALL FOUR UNITS CONT AINING SAME INFORMATION IS FILED,THE ORIGINAL RETURNS REMAIN VALID AND TECHNICAL MISTAKE STANDS REMOVED ON FILING OF REVISED RETURN.IN SUCH A MATTER REVISED RETURN WOULD RELATE BACK TO DATE OF FILING OF ORIGINAL RETURNS. FROM THE ABOVE,IT CLEAR THAT IF AN Y MINOR DEFECT IS THERE WHICH DOES NOT MILITATE AGAINST THE INTENT AND PURPOSE OF THE ACT THEN SUCH DEFECT CAN BE CURED U/S.292 B OF THE ACT,BUT THE SECTION DOES NOT COME TO THE ASSISTANCE OF THE REVENUE,WHERE THERE IS A FUNDAMENTAL INFIRMITY IN THE ASSESS MENT.IT CANNOT CONFER JURISDICTION,WHERE JURISDICTION HAS NOT BEEN PROPERLY ASSUMED.IN THE MATTER OF NORTON MOTORS(275ITR595),THE HONBLE P&H HIGH COURT HAS HELD AS UNDER: TO PUT IT DIFFERENTLY,SECTION 292B CAN BE RELIED UPON FOR RESISTING A CHALLENGE TO THE NOTICE, ETC.,ONLY IF THERE IS A TECHNICAL DEFECT OR OMISSION IN IT. HOWEVER, THERE IS NOTHING IN THE PLAIN LANGUAGE OF THAT SECTION FROM WHICH IT CAN BE INFERRED THAT THE SAME CAN BE RELIED UPON FOR CURING A JURISDICTIONAL DEFECT IN THE ASSESSMENT NOTI CE, SUMMONS OR OTHER PROCEEDING.IN OTHER WORDS,IF THE NOTICE,SUMMONS OR OTHER PROCEEDING TAKEN BY AN AUTHORITY SUFFERS FROM AN INHERENT LACUNA AFFECTING HIS /ITS JURISDICTION, THE SAME CANNOT BE CURED BY HAVING RESORT TO SECTION 292B. IF THE FACTS OF THE CASE UNDER APPEAL ARE CONSIDERED IN LIGHT OF THE ABOVE DISCUSSION,IT BECOMES CLEAR THAT THE PROVISIONS OF SECTION 292B ARE NOT APPLICABLE.IN THE CROSS OBJECTIONS THE AO WANTS US TO TREAT US THE ASSESSMENT COMPLETED U/S.148 AS ASSESSMENT FINALISED U/S.153A OF THE ACT.IN OUR OPINION,BOTH THE SECTIONS DEAL WITH DIFFERENT SITUATIONS AND NOTICE ISSUED UNDER ONE SECTION CANNOT BE TREATED NOTICE UNDER ANOTHER SECTION NOR CAN BE ASSESSMENT MADE UNDER A PARTICULAR SECTION CAN BE TREATED AS FINALISED UNDER ANOTHER SE CTION.SECTION 147 - 148 DEAL WITH RE - ASSESSING OF INCOME FOR A PARTICULAR AY.THAT ESCAPES TAXATION BECAUSE OF THE FAILURE OF THE ASSESSEE OR OTHRERWISE.SECTION 153A DEALS WITH THE MATTERS WHERE ACTION HAS BEEN TAKEN U/S.132 OR 132A OF THE ACT.EACH AND EVERY SECTION OF THE ACT HAS BEEN INCLUDED IN THE STATUE WITH A SPECIFIC INTENTION AND PURPOSE.THE LEGISLATURE IN ITS WISDOM HAS INTRODUCED VARIOUS SECTION TO REGULATE THE TAX COLLECTION.SO,TO ASSUME THAT ONE SECTION IS RE - PLACABLE BY ANOTHER IS NOT A LOGICAL OR LEGAL CONCLUSION.EACH SECTION, EACH PHRASE AND EACH WORD OF THE ACT HAS ITS OWN PLACE AND IMPORTANCE.IF AN AO COMMITS A MISTAKE WHILE PASSING ASSESSMENT ORDERS,IT CANNOT BE CURED BY RELYING UPON ANY OTHER SECTION, BECAUSE SUCH A MISTAKE IS NOT A CLERICAL MISTAKE - IT RELATES TO I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 9 JURISDICTION.THE MISTAKE/DEFECT OR OMISSIONIN NOTICES ISSUED BY THE AO U/S.148 INSTEAD OF SECTION 153A OF THE ACT IS NOT IN CONFORMITY WITH /ACCORDING TO THE INTENT AND PURPOSE OF THE ACT.JURISDICTIONAL ISSUES CANNOT FALL IN THE C ATEGORY OF CLERICAL MISTAKES - THEY GO THE ROOTS OF THE ASSESSMENT.IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT ORDERS PASSED BY THE AO FOR THE AY.1999 - 2000,2001 - 01,2001 - 02 ARE NOT VALID. AS FAR AS THE ASSESSMENT OF AY.2004 - 05 IS CONCERNED,IT IS FOUND THAT THE AO HAD ISSUED NOTICE U/S.143(2) OF THE ACT AND BEFORE COMPLETING THE ORIGINAL ASSESSMENT HAD ISSUE A NOTICE U/S.148 OF THE ACT.WE CANNOT COMPREHEND AS HOW CAN AN AO ISSUE A NOTICE FOR REASSESSING ESCAPED INCOME DURING THE PENDENCY OF THE ASSESSM ENT ITSELF.THE CHRONOLOGICAL EVENTS DISCUSSED IN EARLIER CLEARLY SHOW THAT THE AO HAD ISSUED NOTICE U/S.148 FOR THAT YEAR ON 20.02.2006 AND THE ASSESSMENT WAS COMPLETED ON 29.12.2006.BESIDES HE HAS ISSUED NOTICE U/S.143(2)ON 17.2.2005.CONSIDERING THESE FAC TS,WE ARE OF THE OPINION THAT THE ASSESSMENT ORDER FOR THE AY.2004 - 05 WAS INVALID. ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE ARE TO BE ALLOWED FOR ALL THE YEARS AND THE CROSS OBJECTIONS RAISED BY THE AO ARE REJECTED. 4. WE FIND THAT THE ISSUE IS FULLY COVERED BY THE DECISION OF THE CO - ORDINATE BENCH OF TH IS TRIBUNAL AS STATED ABOVE IN ASSESSEES OWN CASE . W E , THEREFORE , RESPECTFULLY FOLLOWING THE SAME WE SET ASIDE THE ORDER OF CIT(A) AND HOLD THAT THE ASSESSMENT MADE BY THE AO IS INVALID AND BARRED BY LIMITATION . 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14TH DAY OF SEPTEMBER , 201 6 . SD SD (SHAILENDRA KUMAR YADAV) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : DATED 14 /0 9 /201 6 PRABHAT KESARWANI / COPY OF ORDER FORWARDED TO: - 1 . / REVENUE I T A NO . 2321 / M UM / 1 4 A.Y. 200 2 - 0 3 [ VASHDEV G. ADNANI ] PAGE 10 2 . / ASSESSEE 3 . / CONCERNED CIT 4. - / CIT (A) 5 . , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. BY ORDER / , TRUE COPY / , ,