Narendra singh, Gwalior V. I.T.O.- 2(3), Gwalior

ITA 317/AGR/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0367 (ITAT-AGRA)
• Duration Of Justice: 8 year(s) 10 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 01-07-2010
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice; Procedural lapse; Block assessment; Reason to believe
• Section: 143(3); 142(1); 153A; 143(1); 145; 148; 132; 144; 2; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, SMC, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.317/AGR/2010 ASST. YEAR: 2001-02 SHRI NARENDRA SINGH, VS. INCOME TAX OFFICER, E-3, GANDHI NAGAR COLONY, WARD 2(3), GWALIOR. GWALIOR. (PAN : ADIPS 4874 P). (APPELLANT) (RESPONDENT) APPELLANT BY : APPLICATION REJECTED (NONE) RESPONDENT BY : SHRI VINOD KUMAR, JR. D.R. ORDER THIS APPEAL HAS BEEN FIELD BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 30.04.2010 BY TAKING THE FOLLOWING EFFECTIVE GROUND S OF APPEAL:- (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN TREATING ISSUE OF NOTICE U/S 153C ON 20.10.2009 FOR A.Y. 2001-02 IN TIME UNDER THE ACT, IS ILLEGAL, UNJUSTIFIED & BAD IN LAW. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER WHICH IS NOT PASSED U/S 143(3) OR 144 AND THAT TOO WITHOUT ISSUE OF NOTICE U/S 143(2) IS ILLEGAL, UNJUSTIFIED AND BAD IN LAW. (3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF ` 43,350/- AS UNEXPLAINED INVESTMENT IS ILLEGAL, UNJU STIFIED AND BAD IN LAW. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. EVEN T HOUGH REQUEST FOR ADJOURNMENT WAS MADE, FOR WHICH IN MY OPINION THERE WAS NO SUFFICIE NT CAUSE, I ACCORDINGLY REJECTED THE ADJOURNMENT. IN THE ABSENCE OF LD. A.R., I DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. D.R. AS THE MAIN GROUND RAISED RELATES TO THE ISSUE OF NOTICE UNDER SECTION 143(2). 2 3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LD. D.R. AND I HAVE ALSO POINTED OUT THE PROVISIONS OF SECTIONS 153A(1)(A), SECTION 148 AS WELL AS SECTION 143(2) OF THE INCOME- TAX ACT, 1961 (THE ACT HEREINAFTER). THIS IS A F ACT THAT IN THIS CASE THE ASSESSING OFFICER HAS NOT ISSUED ANY NOTICE UNDER SECTION 143(2). THE ASSESS EE HAS TAKEN GROUND BEFORE THE CIT(A) THAT THE ASSESSMENT FRAMED WITHOUT ISSUING THE NOTICE UN DER SECTION 143(2) IS VOID AB INITIO. BUT THE CIT(A) DID NOT AGREE WITH THE ASSESSEE IN THE FOLLO WING MANNER :- APPELLANTS ADDITIONAL GROUND OF APPEAL HAS BEEN C ONSIDERED. IT IS CLEAR THAT THE INCOME TAX ACT ITSELF MAKES A DISTINCTION BETWEEN A RETURN FILED U/S 139 AND RETURN U/S 153A AND PROVIDES FOR DIFFERENT SCHE MES OF ASSESSMENTS U/S 143(3) AND 153A/153B AND 153C. THE PROVISIONS OF SECTION 143 DO NOT APPLY TO A RETURN FILED U/S 153A ALTHOUGH SECTION 153A STATES THAT T HE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETU RN WERE A RETURN REQUIRED TO BE FURNISHED U/S 139. THIS ONLY MEANS THAT A RETURN U/S 153A SHOULD BE SIGNED, VERIFIED ETC. AS IF IT WERE A RETURN U/S 139 AND IF IT IS NOT FILED, THE CONSEQUENCES OF FAILURE TO FILE A RETURN REQUIRED TO BE FILED U/S 1 39 WOULD FOLLOW. IT SHOULD NOT BE CONSTRUED TO MEAN THAT ALL THE CONSEQUENCES OF A RE TURN FURNISHED U/S 139, INCLUDING ASSESSMENT U/S 143(3), WOULD ALSO FOLLOW. PROVISION OF SECTION 153A ARE SPECIFIC PROVISIONS DETAILING WITH SEARCH & SEI ZURE ASSESSMENTS AND ARE A COMPLETE CODE IN ITSELF WHEREAS PROVISIONS OF SECTI ON 143 ARE GENERAL IN NATURE FOR REGULAR ASSESSMENTS. FURTHER, THE INTENTION AN D PURPOSE BEHIND ISSUING NOTICE U/S 143(2) IS TO GIVE ADEQUATE OPPORTUNITY TO THE A PPELLANT TO JUSTIFY HIS CLAIM OF INCOME OR LOSS FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. THE SAME HAS BEEN DONE BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE U/S 142(1) GIVING AMPLE OPPORTUNITY TO THE APPELLANT TO PRODUCE EVIDENCE IN HIS SUPPORT. ACCORDINGLY, THIS GROUND OF THE APPELLANT IS ALSO DISMISSED. 4. I HAVE GONE THROUGH THE PROVISIONS OF SECTION 15 3A(1)(A), 148 AS WELL AS THE PROVISIONS OF SECTION 143(2) OF THE ACT. SECTION 153A(1)(A) LAYS DOWN AS UNDER :- 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BO OKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SEC TION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL - (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND 3 SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES CRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APP LY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSES S THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. 5. FROM A PERUSAL OF THE AFORESAID SECTION, IT IS A PPARENT THAT THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO THE PERSON, IN WHOSE CASE ACTION UNDER SECTION 132 OR UNDER SECTION 132A HAS TAKEN PLACE AFTER 31.05.2003, ASKING THE PERSON TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH OF THE ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMEN T YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH IS CONDUCTED OR REQUISITION IS MADE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED WITHIN SUCH PERIOD AS HE MAY MENT ION IN THE NOTICE ISSUED UNDER SECTION 153A(A). THIS SECTION FURTHER PROVIDES THAT ALL TH E OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE RETURN FILED IN RESPONSE TO SUCH NOTICE AS IF SUCH RETURN IS A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 OF THE ACT. SECTION 153A DOES NOT PROV IDE THE METHODOLOGY FOR MAKING THE ASSESSMENT. IT ONLY STATES THAT THE ASSESSING OFFI CER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENTS. THIS SECTION IN FACT CREATES LEGAL FICTION THAT ALL THE PROVISIONS OF INCOME-TAX ACT, SO FAR THEY ARE APPLICABLE TO RETURN FILED UNDER SECTION 139, SHALL APPLY TO RETURN FILED UNDE R THIS SECTION. THIS CLEARLY DENOTES THAT ALL THE PROCEDURES PRESCRIBED FOR THE PURPOSE OF ASSESSMENT SUBSEQUENT TO SECTION 139 WILL AUTOMATICALLY APPLY IN CASE OF THE RETURN FILED UNDER SECTION 153 A. THE PROVISIONS OF SECTION 153A AND SECTION 139 BOTH ARE UNDER CHAPTER XIV. IT IS SETTLED LAW THAT A LEGAL FICTION HAS TO BE TAKEN TO ITS LOGICAL CONCLUSION AND, THEREFORE, WHAT IS VALID FOR RETURN FILED UNDER SECTION 139 WILL BE VALID IN RESPECT OF RETURN FILED UNDER SECTION 153A. THE WORD USED SHALL WHICH MAKES IT MANDATORY THAT ALL THE 4 PROVISIONS OF THIS ACT, AS ARE APPLICABLE TO A RETU RN FILED UNDER SECTION 139, WILL APPLY TO THE RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SEC TION 153A. SECTION 143(2) STIPULATES AS UNDER :- (2) WHERE A RETURN HAS BEEN FURNISHED UNDER SECTIO N 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142, THE AS SESSING OFFICER SHALL,- (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM O F LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN I S INADMISSIBLE, SERVE ON THE ASSESSEE A NOTICE SPECIFYING PARTICULARS OF SUC H CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUI RE HIM, ON A DATE TO BE SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUC ED, ANY EVIDENCE OR PARTICULARS SPECIFIED THEREIN OR ON WHICH THE ASSES SEE MAY RELY, IN SUPPORT OF SUCH CLAIM; [ PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED O N THE ASSESSEE ON OR AFTER THE 1 ST DAY OF JUNE, 2003;] (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDER-STATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NO T UNDER-PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUI RING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE O R TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN; [ PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED O N THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED.] 6. SECTION 153A, AS HAS BEEN POINTED OUT BY ME EARL IER, DOES NOT PRESCRIBE ANY SEPARATE METHODOLOGY OF COMPUTATION OF SUCH INCOME, THE PROC EDURE OF SUCH COMPUTATION OR THE RATE AT WHICH SUCH INCOME HAS TO BE TAXED. THEREFORE, PROV ISIONS OF SECTION 139 AND ONWARDS I.E. SECTION 140 AND ONWARDS ARE APPLICABLE. SECTION 14 0 PRESCRIBES WHO SHOULD SIGN THE RETURN. SECTION 140A PRESCRIBES THE PAYMENT OF TAXES ON THE BASIS OF RETURNED INCOME. AN ENQUIRY MUST THEN BE HELD AS PRESCRIBED UNDER SECTION 142 AND AN ASSESSMENT MAY BE MADE AS PRESCRIBED UNDER SECTION 143. SECTION 143(1) PERMITS THE ASSESSING OFFICER TO PROCESS THE RETURN ON THE BASIS OF THE INFORMATION AVAILABLE IN THE RETURN. SECTION 1 43 (2)(I) POINTS OUT A SITUATION WHERE A RETURN IS FILED OR IN RESPONSE TO A NOTICE CALLING FOR THE RE TURN UNDER SECTION 142 IN WHICH THE ASSESSING 5 OFFICER HAS REASON TO BELIEVE THAT ANY CLAIM OF LOS S, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE, SERVE ON THE AS SESSEE A NOTICE SPECIFYING PARTICULARS OF SUCH CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR R ELIEF AND REQUIRE HIM, ON A DATE TO BE SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUC ED, ANY EVIDENCE OR PARTICULARS AS SPECIFIED THEREIN ON WHICH THE ASSESSEE MAY RELY, IN SUPPORT OF SUCH CLAIM. SUB-CLAUSE (II) OF SECTION 143(2) POINTS OUT WHERE A RETURN FILED OR IN RESPON SE TO A NOTICE, IF THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDER-STATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER-PA ID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM ON A DATE TO BE SPE CIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED THEREIN, ANY EVIDE NCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. BOTH THE SUB-CLAUSES (I) & (II) OF SECTION 143(2) HAD THE PROVISO THERETO WHICH SAYS IN RESPECT OF CLAUSE (I) THAT NO NOTICE UNDER SECTION 143(2)(I) SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1 ST DAY OF JUNE, 2003, WHILE IN RESPECT OF SECTION 143 (2)(II) THE PROVISO STATES THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SE RVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FILED. EARLIER, THE LIMIT OF SIX MONTHS WAS 12 MONTHS FROM THE END OF THE MONTH IN W HICH THE RETURN IS FURNISHED. FROM THE READING OF SECTION 143(2) AND PROVISOS THERETO, AS IT STOOD IN THE RELEVANT YEARS, THE ASSESSING OFFICER HAS GOT NO POWER TO MAKE AN ASSESSMENT UNLE SS HE ISSUES NOTICE IN THE PRESCRIBED TIME AS WAS SPECIFIED UNDER SECTION 143(2) DURING THE RELEV ANT ASSESSMENT YEAR. THE ASSESSING OFFICER, IN MY OPINION, IS BOUND TO FOLLOW THE ASSESSMENT PR OCEDURE AND THEREIN NO CHOICE LEFT ON HIM. 7. I ALSO NOTICED THAT SIMILAR WORDS AS ARE GIVEN U NDER SECTION 153A(A) AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDAN TLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ARE ALSO HAVING PLACE UNDER SECTION 148. THE WORDS USED U/S.148 ARE ALSO AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH 6 RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139. THEREFORE, IN MY OPINION, THESE WORDS WILL HAVE THE SAME INTERPRETATION AS HAS BEEN GIVEN IN RESPECT OF RETURN FILED IN RESPONSE TO A NOTICE ISSUED UNDER SECTION 148. WHEN A QUESTION AROSE WHETHER THE PROVISO TO SECTION 143(2) WHICH MANDATES SERVICE OF NOTICE WITHIN A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FILED, IS APPLICABLE TO THE RET URN FILED PURSUANT TO A NOTICE UNDER SECTION 148, SPECIAL BENCH OF THIS TRIBUNAL INTERPRETING THE WOR DS AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 IN THE CASE OF RAJ KUMAR CHAWLA VS. IT O, 94 ITD 1 (DEL) (SB), HAS HELD AS UNDER :- IN THE LIGHT OF THE ANALYSIS OF THE RELEVANT PROVI SIONS OF LAW AND JUDICIAL PRECEDENTS, IT WAS HELD THAT THE RETURN FILED PURSU ANT TO NOTICE UNDER SECTION 148 MUST BE ASSUMED AND TREATED TO BE A RETURN FILED UN DER SECTION 139 AND THE ASSESSMENT MUST THEREAFTER BE MADE UNDER SECTION 14 3 OR 144 AFTER COMPLYING WITH ALL THE MANDATORY PROVISIONS. ACCORDINGLY, IT IS INCUMBENT UPON THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 1 43(2) WITHIN THE PERIOD AS STIPULATED IN THE PROVISO THEREUNDER. IN THAT VIEW OF THE MATTER, IT WAS HELD THAT THE PROVISO TO SECTION 143(2) WHICH MANDATES THE SE RVICE OF NOTICE WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN IS FILED, ALSO APPLIES TO THE RETURNS FILED PURSUANT TO NOTICE UNDER SECTION 148. AS REGARDS THE ISSUE REGARDING EFFECT OF NON-SERVIC E OF NOTICE UNDER THE PROVISO TO SECTION 143(2) TO RETURN FILED PURSUANT TO SECTION 148, IT WAS TO BE HELD THAT THE ASSESSMENT CAN BE MADE IF THE NOTICE UNDER SECTION 143(2) IS NOT SERVED WITHIN THE TIME PRESCRIBED BY THE PROVISO UNDER SEC TION 143 AND, THUS, THE RETURN FILED WILL BE DEEMED AS ACCEPTED. THOUGH THE APPELLANTS WERE NOT ABLE TO STATE THE EX ACT DATE OF SERVICE OF NOTICE BUT THE ADMITTED FACT WAS THAT THE NOTICE UNDER SECTION 143(2) IN RESPECT OF THE APPELLANTS HAD BEEN SERVED AFTER THE EXPIRY OF PERI OD OF 12 MONTHS AS PROVIDED UNDER PROVISO TO SECTION 143(2). SINCE THE ASSESSIN G AUTHORITY HAD FAILED TO SERVE THE NOTICES WITHIN THE STATUTORY PERIOD PROVIDED UN DER SECTION 143(2), THE ASSESSING OFFICER HAD LOST ITS JURISDICTION TO MAKE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147. 8. IN MY OPINION, THIS JUDGMENT IS SQUARELY APPLICA BLE IN THE CASE OF THE ASSESSEE. INCIDENTALLY, WHILE GOING THROUGH THE PROVISIONS OF SECTION 153A, I HAVE ALSO GONE THROUGH THE PROVISIONS OF CHAPTER XIV-B, SPECIAL PROCEDURE FOR THE ASSESSMENT OF SEARCH CASES WHICH WERE APPLICABLE PRIOR TO THE PROVISIONS OF SECTION 153A, 153B AND 153C BY THE FINANCE ACT, 2003 7 W.E.F. 01.06.2003. I NOTED THAT UNDER THE HEAD PRO CEDURE FOR BLOCK ASSESSMENT GIVEN UNDER SECTION 158BC(B), THE LEGISLATURE HAS NOT TREATED T HE RETURN FILED AS IF SUCH RETURN WAS A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139, BUT HAS SPECIFICALLY LAID DOWN THAT THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) & (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FAR AS MAY BE, APPLICABLE TO BLOCK ASSESSMENT. WHILE INTE RPRETING THESE PROVISIONS, A QUESTION ARISES WHETHER ISSUANCE OR SERVICE OF NOTICE UNDER SECTION 143(2) IS MANDATORY OR NOT. HONBLE SUPREME COURT IN THE CASE OF ACIT & ANOTHER VS. HOT EL BLUE MOON, 321 ITR 362 (SC) HAS HELD AS UNDER :- WE MAY NOW REVERT BACK TO S. 158BC(B) WHICH IS THE MATERIAL PROVISION WHICH REQUIRES OUR CONSIDERATION. SEC. 158BC(B) PR OVIDES FOR ENQUIRY AND ASSESSMENT. THE SAID PROVISION READS 'THAT THE AO SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNE R LAID DOWN IN S. 158BB AND THE PROVISIONS OF S. 142, SUB-SS. (2) AND (3) OF S. 143, S. 144 AND S. 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 AO TO COMPLETE THE A SSESSMENT BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER S. 143(2)/142 AND COMPLETE THE ASSESSMENT UNDER S. 143 (3). THIS SECTION DOES NOT PROVIDE FOR ACCEPTING THE RETURN AS PROVIDED UNDER S. 143(1)(A). THE AO HAS TO COMPLETE THE ASSE SSMENT UNDER S. 143(3) ONLY. IN CASE OF DEFAULT IN NOT FILING THE RETURN OR NOT COM PLYING WITH THE NOTICE UNDER S. 143(2)/142, THE AO IS AUTHORIZED TO COMPLETE THE AS SESSMENT EX PARTE UNDER S. 144. CLAUSE (B) OF S. 158BC BY REFERRING TO SS. 143(2) A ND 143(3) WOULD APPEAR TO IMPLY THAT THE PROVISIONS OF S. 143(1) ARE EXCLUDED. BUT S. 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 UND ER S. 143(2). HOWEVER, IF AN ASSESSMENT IS TO BE COMPLETED UNDER S. 143(3) R/W S . 158BC, NOTICE UNDER S. 143(2) SHOULD BE ISSUED WITHIN ONE YEAR FROM THE DATE OF F ILING OF BLOCK RETURN. OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOT ICE UNDER S. 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE AND, THEREFORE, THE REQUIREMENT OF NOTICE UNDER S. 143(2) CANNOT BE DISPENSED WITH. THE OTHER IMPORTANT FEATURE THAT REQUIRES TO BE NOTICED IS THAT THE S. 158BC(B) SPECIFICALLY REFERS TO SOME OF THE PROVISIONS OF THE ACT WHICH REQUIRES TO BE FOLLOWED BY THE AO WHILE COMPLETING THE BLOCK ASSESSMENTS UNDER CHAPTER XIV-B OF THE ACT. T HIS LEGISLATION IS BY INCORPORATION. THIS SECTION EVEN SPEAKS OF SUB-SECT IONS WHICH ARE TO BE FOLLOWED BY THE AO. HAD THE INTENTION OF THE LEGISLATURE WAS T O 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 INDI CATE, IN OUR OPINION, IF THE AO, IF FOR ANY REASON, REPUDIATES THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE UNDER S. 158BC(A), THE AO MUST NECESSARILY ISSUE NO TICE UNDER S. 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO S. 143 (2) OF THE ACT. WHERE THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN PROVISIONS FROM THE AMBIT OF S. 158BC(B) IT 8 HAS DONE SO SPECIFICALLY. THUS, WHEN S. 158BC(B) SP ECIFICALLY REFERS TO [SIC-S. 143(2)] APPLICABILITY OF THE PROVISO THERETO CANNOT BE EXCLUDED. WE MAY ALSO NOTICE HERE ITSELF THAT THE CLARIFICATION GIVEN BY CBDT IN ITS CIRCULAR NO. 717, DT. 14TH AUG., 1995, HAS A BINDING EFFECT ON THE DEPART MENT, BUT NOT ON THE COURT. THIS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPEC T OF SERVICE OF NOTICE UNDER SUB-S. (2) OF S. 143 OF THE ACT. ACCORDINGLY, WE CONCLUDE EVEN FOR THE PURPOSE OF CHAPTER XIV-B OF THE ACT, FOR THE DETERMINATION OF UNDISCLO SED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF S. 158BC, THE PROVISIONS OF S. 142 AND SUB-SS. (2) AND (3) OF S. 143 ARE APPLICABLE AND NO ASSESSMENT COULD BE MA DE WITHOUT ISSUING NOTICE UNDER S. 143(2) OF THE ACT. HOWEVER, IT IS CONTEND ED BY SRI SHEKHAR, LEARNED COUNSEL FOR THE DEPARTMENT THAT IN VIEW OF THE EXPR ESSION 'SO FAR AS MAY BE' IN S. 153BC(B), THE ISSUE OF NOTICE IS NOT MANDATORY BUT OPTIONAL AND ARE TO BE APPLIED TO THE EXTENT PRACTICABLE. IN SUPPORT OF THAT CONT ENTION, THE LEARNED COUNSEL HAS RELIED ON THE OBSERVATION MADE BY THIS COURT IN DR. PARTAP SINGH'S CASE (SUPRA). IN THIS CASE, THE COURT HAS OBSERVED THAT S. 37(2) PRO VIDES THAT 'THE PROVISIONS OF THE CODE RELATING TO SEARCHES, SHALL SO FAR AS MAY BE, APPLY TO SEARCHES DIRECTED UNDER S. 37(2). READING THE TWO SECTIONS TOGETHER IT MERE LY MEANS THAT THE METHODOLOGY PRESCRIBED FOR CARRYING OUT THE SEARCH PROVIDED IN S. 165 HAS TO BE GENERALLY FOLLOWED. THE EXPRESSION 'SO FAR AS MAY BE' HAS AL WAYS 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 NOTIC E THE OBSERVATIONS MADE BY THIS COURT IN THE CASE OF MAGANLAL VS. JAISWAL INDUSTRIE S & ORS. (1989) 4 SCC 344, WHEREIN THIS COURT WHILE DEALING WITH THE SCOPE AND IMPORT OF THE EXPRESSION 'AS FAR AS PRACTICABLE' HAS STATED 'WITHOUT ANYTHING MO RE 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 APPLICAB LE IN ITS ENTIRETY EXCEPT SUCH PROVISION THEREIN WHICH MAY NOT BE PRACTICABLE TO B E APPLIED.' THE CASE OF THE REVENUE IS THAT THE EXPRESSION 'SO FAR AS MAY BE APPLY' INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PRO VISIONS OF S. 142, SUB-SS. (2) AND (3) OF S. 143 STRICTLY FOR THE PURPOSE OF BLOCK ASSESSM ENTS. 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 FAR AS MAY BE APPLY'. IN OUR VIEW, WHERE THE AO IN REPUDIATION OF THE RETURN FIL ED UNDER S. 158BC(A) PROCEEDS TO MAKE AN ENQUIRY, HE HAS NECESSARILY TO FOLLOW TH E PROVISIONS OF S. 142, SUB-SS. (2) AND (3) OF S. 143. SEC. 158BH PROVIDES FOR APPLICATION OF THE OTHER PR OVISIONS 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 CHAPT ER.' THIS IS AN ENABLING PROVISION, WHICH MAKES ALL THE PROVISIONS OF THE AC T, SAVE AS OTHERWISE PROVIDED, APPLICABLE FOR PROCEEDINGS FOR BLOCK ASSESSMENT. T HE PROVISIONS WHICH ARE SPECIFICALLY INCLUDED ARE THOSE WHICH ARE AVAILABLE IN CHAPTER XIV-B OF THE ACT, WHICH INCLUDES S. 142 AND SUB-SS. (2) AND (3) OF S. 143. 9. THUS, IN VIEW OF THE AFORESAID DISCUSSIONS AND T HE DICTUM OF LAW PRONOUNCED BY THE APEX COURT, I AM OF THE VIEW THAT SERVICE OF NOTICE UND ER SECTION 143(2) WITHIN THE PRESCRIBED TIME AS 9 PER THE PROVISIONS OF SECTION 143(2) IS MANDATORY. IN THE ABSENCE OF SERVICE OF SUCH NOTICE, THE ASSESSING OFFICER CANNOT MAKE THE ADDITION IN THE I NCOME OF THE ASSESSEE AND THE ASSESSING OFFICER IS BOUND TO ACCEPT THE INCOME AS RETURNED B Y THE ASSESSEE. 10 SINCE I HAVE ALREADY DELETED THE ADDITION IN THE ABSENCE OF NOTICE BEING SERVED UNDER SECTION 143(2) ON THE ASSESSEE, WHICH IS NOT CURABL E DEFECT, IN MY OPINION, OTHER GROUNDS TAKEN BY THE ASSESSEE DO NOT REQUIRE ANY ADJUDICATION. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.201 0). SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 30 TH NOVEMBER, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY