Shri Abhijit Suresh Jadhav, Sangli V. ACIT,Central Circle, Kolhapur

ITA 652/PUN/2004

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1998 (ITAT-PUNE)
• Duration Of Justice: 8 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-11-2012
• Assessment Year: misc
• Appeal Filed On: 29-04-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Invalid notice; Search and seizure; Document seized; Block assessment; Documents seized
• Section: 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.652/PN/2004 (BLOCK PERIOD 01-04-1995 TO 28-09-2001) ABHIJIT SURESH JADHAV 165, ARCHNA APARTMENT, RAM MANDIR ROAD, SOUTH SHIVAJINAGAR, SANGLI 416 416 .. APPELLANT PAN NO. ABAPJ 5415P VS. ACIT, CENTRAL CIRCLE, VIHAR BUILDING, SKYES EXTENTION, TAKALA KOLHAPUR. .. RESPONDENT ITA.NO.616/PN/2004 (BLOCK PERIOD FOR ASSESSMENT YEARS 1996-97 TO 2002- 03) ACIT, CENTRAL CIRCLE, 1146/E,VIHAR BUILDING, SKYES EXTENTION, TAKALA KOLHAPUR. .. APPELLANT VS. ABHIJIT SURESH JADHAV 165, ARCHANA APARTMENT, RAM MANDIR ROAD, SOUTH SHIVAJINAGAR, SANGLI 416 416 .. RESPONDENT PAN NO. ABAPJ 5415P ITA.NO.297/PN/2004 (BLOCK PERIOD FOR ASSESSMENT YEARS 1996-97 TO 2002- 03) ACIT, CENTRAL CIRCLE, 1146/E,VIHAR BUILDING, SKYES EXTENTION, TAKALA KOLHAPUR. .. APPELLANT VS. SMITA SURESH JADHAV 165, ARCHANA APARTMENT, RAM MANDIR ROAD, SOUTH SHIVAJINAGAR, SANGLI 416 416 .. RESPONDENT PAN NO.ADMPJ 8956 CO.NO.49/PN/2004 ARISING OUT OF ITA NO.297/PN/2004 (BLOCK PERIOD FOR ASSESSMENT YEARS 1996-97 TO 2002- 03) SMITA SURESH JADHAV 165, ARCHANA APARTMENT, RAM MANDIR ROAD, SOUTH SHIVAJINAGAR, SANGLI 416 416 .. APPELLANT PAN NO.ADMPJ 8956 VS. ITI WARD-2, SANGLI. .. RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI MUKESH VERMA DATE OF HEARING : 11-03-2013 DATE OF PRONOUNCEMENT : 19 -03-2013 2 ORDER PER R.K. PANDA, AM : ITA NO.652/PN/2004 AND ITA NO.616/PN/2004 ARE CROS S APPEALS, THE FIRST ONE FILED BY THE ASSESSEE AND THE SECOND ONE FILED BY THE REVENUE AND ARE DIRECTED AGAINST THE ORDER DATED 02-01-2004 PASSED BY THE CIT(A)-I, PUNE RELATING TO BLOCK PERIOD 01-04-1995 TO 28-09-2 001. ITA NO. 297/PN/2004 FILED BY THE REVENUE AND CO NO . 49/PN/2004 FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDE R DATED 02-01-2004 PASSED BY THE CIT(A)-I, PUNE RELATING TO BLOCK PERIOD 1996 -97 TO 2002-03. FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS AND THE CROSS OBJECTION WERE HEARD TOGETHER AND ARE BEING DISPOSED BY THIS COMMON ORDE R. ITA NO.652/PN/2004 AND ITA NO.616/PN/2004 (SHRI ABH IJIT SURESH JADHAV) : 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF DEVELOPMENT OF PLOTS AND CONSTRUCTION OF FLATS/SHOPS ON IT UNDER THE NAME AND STYLE OF VENK ATESHWARA CONSTRUCTION IN THE CAPACITY OF PROPRIETORSHIP. HE IS ALSO A PA RTNER IN THE TWO FIRMS NAMELY (I) M/S. VENKATARAMANA CONSTRUCTION AND (II) M/S. VENKATESH VARDHAN CONSTRUCTION. A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS CONDUCTED ON 27-09-2001 AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF SHRI ABHIJIT SURESH JADHAV WHICH CONTINUED UPTO 29- 09-2011. THE CIT, KOLHAPUR ASSIGNED THE CASE TO ACIT, CENTRAL CIRCLE, KOLHAPUR VIDE HIS ORDER NO.KOP/CIT(HQ)/JURIS(BA)/2001-02/7726 DATED 1 1-02-2002. THE ASSESSING OFFICER ISSUED NOTICE U/S.158BC(C) DATED 01-03-2002 WHICH WAS SERVED ON THE ASSESSEE ON 04-03-2002 (WRONGLY WRITT EN IN ASSESSMENT ORDER AS 05-03-2002). IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FILED THE BLOCK 3 RETURN IN FORM NO.2B ON 27-03-2002 DECLARING UNDISC LOSED INCOME AT ` 14 LAKHS AND PAID TAX OF ` 7,56,800/-. ANOTHER ` 1 LAKH WAS APPROPRIATED OUT OF THE SEIZED CASH. 2.1 THE ASSESSING OFFICER NOTED THAT DURING THE SEA RCH AND SEIZURE OPERATION VARIOUS BOOKS OF ACCOUNTS AND DOCUMENTS/L OOSE PAPERS/BUNDLES AS PER ANNEXURE-A TO THE PANCHANAMA WERE SEIZED. T HE ASSESSING OFFICER CALLED FOR EXPLANATION FROM THE ASSESSEE ON VARIOUS ISSUES FROM TIME TO TIME WHICH THE ASSESSEE COMPLIED. THEREAFTER, THE ASSES SING OFFICER COMPLETED THE UNDISCLOSED INCOME OF THE ASSESSEE AT ` 63,37,220/-. 3. IN APPEAL THE LEARNED CIT(A) GAVE PART RELIEF TO THE ASSESSEE BY REDUCING THE UNDISCLOSED INCOME TO ` 16,45,854/- AS AGAINST ` 63,37,220/- DETERMINED BY THE ASSESSING OFFICER. AGGRIEVED WIT H SUCH PART RELIEF GIVEN BY THE LEARNED CIT(A) THE ASSESSEE AS WELL AS THE R EVENUE ARE IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : GROUNDS BY ASSESSEE (ITA NO.652/PN/2004): 1. GROUND NOS. 1.1 TO 1.4 : THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF `5,80,760/- IN RESPECT OF AMOUNT RECEIV ED ON VENKATESH VAIBHAV. 2. GROUNDS NOS. 2.1 TO 2.4 : THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,00,000/- IN RESPECT OF AMOUNT RECE IVED FROM SRI OLEKAR S.R. IN RESPECT OF VENKATESH ASHISH PROJECT. 3. GROUNDS NOS. 3.1 TO 3.4 : THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,00,000/- IN RESPECT OF AMOUNT RECE IVED FROM SRI JAPTIWALE ON VENKATESH TILAK. 4. GROUND NOS. 4.1 TO 4.6 : THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAS RIGHTLY ESTIMATED ON MONEY RECEIPT OF RS.4,73,094/- (TOTAL OF `RS.3,78,882,59,214/- 35,000/-. 5. GROUND NOS. 5.1 TO 5.3 : THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS NOT RECEIVED AWAY AMOUNT AGAINST THE R ECEIPT OF RS.3,92,000/- GIVEN BY SHRI LELE. 6. GROUND NOS. 1.5, 2.5, 3.5, 4.2, 5.4 : WITHOUT PREJUDICE TO THE ABOVE THE LD. CIT(A) FAILED TO APPRECIATE THAT THE GROSS RECE IPTS CANNOT BE INCOME AND ONLY INCOME PORTION IN THE RECEIPT SHOULD BE SUBJECTED T O TAX. ACCORDINGLY ASSESSING OFFICER MAY BE DIRECTED TO TAX THE INCOME ELEMENT O F THE RECEIPTS AND NOT THE GROSS RECEIPTS. 4 7. GROUND NO.6.1 : THE ASSESSMENT IS BAD IN LAW SHOULD BE DECLARED NU LLITY AND VOID. GROUNDS BY REVENUE (ITA NO.616/PN/2004): 1. A) THE CIT(A)-I, PUNE HAS ERRED IN REDUCING TH E UNDISCLOSED INCOME TO RS.16,45,854/- FROM RS. 63,37,220/- WHEN APPELLANT HIMSELF SUBMITTED CHART SHOWING HIS 'ON-MONEY RECEIPTS TO THE TUNE OF RS.56 ,90,151/- DURING ASSESSMENT PROCEEDINGS. B) IN ALLOWING THE RELIEF, THE CIT(A), ERRED I N CONSIDERING ONLY SECOND CHART SUBMITTED BY THE APPELLANT IN RESPONSE TO OFF ICE LETTER DTD 01-09-2003 IN WHICH UNDISCLOSED INCOME WAS SHOWN AT RS.6,96,434/- WHICH IS WITHOUT 'ON- MONEY RECEIPTS'. C) THE CIT(A) HAS ERRED IN FAILING TO STATE CLEARLY IN HIS ORDER THE RECONCILIATION BETWEEN THE AMOUNT OF RELIEF GRANTED AND ADDITIONS TO BE SUSTAINED OUT OF TOTAL UNDISCLOSED INCOME DETERMINED. D) THE CIT (A) HAS ERRED IN NOT GRANTING OPPORTUNIT Y OF HEARING TO THE AO EVEN THOUGH IT WAS EXPLICITLY REQUESTED IN ITNS 51 SUBMITTED IN THE OFFICE OF THE CIT(A)-I, PUNE. E) THE CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE PREVAILING PRACTISE OF TAKING 'ON-MONEY' IN CONSTRUCTION BUSINESS AND T HE ADDITIONS MADE ON THE BASIS OF THIS ANALOGY. F) THE CIT(A) HAS ERRED IN GIVING RELIEF EVEN THOUG H THE ADDITIONS WERE MADE ON THE BASIS OF ON MONEY RECEIVED AND AGREED BY ASS ESSEE AND THESE ADDITIONS WERE MADE BY WAY OF EXTRAPOLATION / ESTIMATION RELY ING ON THE OBSERVATIONS OF HON. SUPREME COURT IN THE CASE OF C.S.T VS.HM EUSFA LI HM ABDULALA REPORTED IN 90 ITR 271 (1973). 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) BE VACATED TO THIS EXTENT AND THAT OF BE RESTORED. 3. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AMEND, MODIFY THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 3.1 THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUN D WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE MANDATORY NOTICE U/S.158B-BC OF THE ACT ISSUED AND SERVED CALLING FOR THE RETURN-WITHIN FIFTEEN DAYS IS BAD IN LAW AND CONS EQUENT BLOCK ASSESSMENT MADE IN PURSUANCE OF SUCH ILLEGAL NOTICE IS ALSO BA D IN LAW AND WITHOUT JURISDICTION 4. AFTER HEARING BOTH THE SIDES THE ADDITIONAL GROU ND RAISED BY THE ASSESSEE BEING LEGAL ONE WAS ADMITTED FOR ADJUDICAT ION. 5 5. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET ARGUED THE ADDITIONAL GROUND. HE SUBMITTED THAT THE NOTICE IS SUED U/S.158BC IS ILLEGAL SINCE THE NOTICE WAS SERVED ON THE ASSESSEE CALLING FOR THE RETURN WITHIN 15 DAYS FROM THE DATE OF SERVICE OF THE NOTICE. REFE RRING TO THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT AND ANOTHER VS. MICRO LABS LTD. REPORTED IN 348 ITR 75 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT NOTICE U/S.158BC CALLING UPON THE ASSESSEE TO SUBMIT ITS RETURN OF INCOME WITHIN 15 DAYS IS AN INVALID NOTICE AND AN INVALID NOTICE CANNOT CONFER JURISDICTION ON THE AU THORITY AND THEREFORE THE ENTIRE PROCEEDINGS WERE BAD IN LAW. REFERRING TO T HE NOTICE ISSUED BY THE ASSESSING OFFICER IN THE IMPUGNED CASE ( A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE NO.291) HE SUBMITTED THAT THE ASSESSING O FFICER IN THE SAID NOTICE HAS CALLED UPON THE ASSESSEE TO PREPARE AND DELIVER THE RETURN WITHIN 15 DAYS OF SERVICE OF THIS NOTICE U/S.158BC. THER EFORE, SUCH NOTICE ISSUED BY THE ASSESSING OFFICER IS AN INVALID NOTICE WHICH CANNOT CONFER ANY JURISDICTION ON THE AUTHORITY. THEREFORE, THE ENTI RE PROCEEDINGS WERE BAD IN LAW. HE ACCORDINGLY SUBMITTED THAT THE ASSESSMENT DONE BY THE ASSESSING OFFICER SHOULD BE QUASHED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND RELIED UPON THE DECISION OF THE AGRA BENCH OF THE TRIBUNAL IN THE CASE OF CHANDRA BHAN VS. ACIT REPORTED IN 98 ITD 6 AND SUBMITTED TH AT THE PROVISIONS OF SECTION 292B WILL TAKE CARE OF ANY SUCH MISTAKE IN THE NOTICE ISSUED BY THE ASSESSING OFFICER AND THE ASSESSMENT CANNOT BE HELD TO BE INVALID. HE SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE WAS GIVEN FULL OPPORTUNITY TO SUBSTANTIATE ALL HIS CLAIMS, THEREFORE, MERELY BECA USE THE ASSESSING OFFICER 6 HAS ASKED THE ASSESSEE TO FURNISH THE RETURN WITHIN 15 DAYS OF SERVICE OF NOTICE ISSUED U/S.158BC THE ASSESSMENT CANNOT BE HE LD AS INVALID. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE RECORDS. WE HAVE ALSO CONSIDERED THE T WO DECISIONS BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL FOR THE ASSESSEE AND THE LEARNED DEPARTMENTAL REPRESENTATIVE RESPECTIVELY. IN THE I NSTANT CASE WE FIND THE NOTICE ISSUED U/S.158BC OF THE INCOME TAX ACT BY TH E ASSESSING OFFICER ON 01-03-2002 (A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE NO.291) READS AS UNDER : NOTICE UNDER SECTION 158BC OF THE INCOME TAX ACT, 1 961 PAN NO./GIR NO./211 BLOCK PERIOD 01/4/95 TO 27-0 9-2001 A.Y. 1996-97 TO 2002-03 ASST. COMMISSIONER OF INCOME-TAX, (CENTRAL CIRCLE), 1146, E-WARD VIHAR, SKYES EXTN. TAKALA KOLHAPUR : TEL. 528298 DATE : 01/03/2002 TO SHRI ABHIJIT SURESH JADHAV, 165, ARCHANA APPTS, SOUTH SHIVAJINAGAR, SANGLI. IN PURSUANCE OF THE PROVISIONS OF SECTION 158BC OF THE INCOME-TAX ACT, 1961 YOU ARE REUQIRED TO PREPARE A TRUE AND CORRECT RETURN OF YO UR TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME IN RESPECT OF WHICH YOU AS INDIVIDUAL/HUF/FI RM/COMPANY/AOP/BODY OF INDIVIDUALS/LOCAL AUTHORITY ARE ASSESSABLE FOR THE BLOCK PERIOD MENTIONED IN SECTION 158B(A) OF THE I.T. ACT, 1961. 2. THE RETURN SHOULD BE IN THE PRESCRIBED FORM NO.2 B AND BE DELIVERED IN THIS OFFICE WITHIN 15 DAYS OF SERVICE OF THIS NOTICE, DULY VERIFIED AN D SIGNED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 140 OF THE INCOME-TAX ACT, 1961. SD/- (A.N. MIRKAR) ASST. COMMISSIONER OF INCOME-TAX (CENTRAL CIRCLE), KOLHAPUR. 8. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MICRO LABS LTD. HAD AN OCCASION TO DECIDE AN IDENTICAL IS SUE WHERE THE ASSESSING OFFICER IN THE NOTICE ISSUED U/S.158BC REQUESTED TH E ASSESSEE TO FILE THE RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS FOR THE BLOCK PERIOD 1988-1989 7 TO 1998-99. IN THIS CASE, A SEARCH WAS CONDUCTED I N THE GROUP OF CASES U/S.132 ON 10-09-97. THE NOTICE U/S.158BC WAS ISSU ED ON 15-12-97 REQUESTING THE ASSESSEE TO FILE A RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS FOR THE BLOCK PERIOD 1988-89 TO 1998-99. BY A LETT ER DATED 02-01-98 THE ASSESSEE SOUGHT TIME TO FILE ITS RETURN OF INCOME. ON 16-06-99 THE ASSESSEE WAS ONCE AGAIN REQUESTED TO FILE ITS RETURN OF INCO ME FOR THE BLOCK PERIOD WHICH WAS SERVED ON HIM ON 17-06-99. THE ASSESSEE FILED THE RETURN OF INCOME ON 29-6-99 DECLARING A SUM OF ` 200 LAKHS AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD 01-04-87 TO 05-11-97. THE ASSESSI NG OFFICER AFTER CONSIDERING THE SEIZED MATERIAL AND THE RETURN OF I NCOME FILED ARRIVED AT UNDISCLOSED INCOME FOR THE BLOCK PERIOD AT ` 200 LAKHS. 9. THE ASSESSEE CHALLENGED THE VALIDITY OF NOTICE I SSUED U/S.158BC BEFORE THE APPELLATE COMMISSIONER WHO HELD THAT THE NOTICE U/S.158BC OF THE ACT WAS INVALID AND CONSEQUENTLY HE ANNULLED TH E ASSESSMENT. THE APPEAL FILED BY THE REVENUE WAS REJECTED BY THE TRI BUNAL AND THE CO FILED BY THE ASSESSEE WAS ALLOWED. ON FURTHER APPEAL BY THE REVENUE THE HONBLE HIGH COURT HELD THAT THE NOTICE ISSUED BY THE ASSES SING OFFICER CALLING UPON THE ASSESSEE TO SUBMIT ITS RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS IS INVALID AND AN INVALID NOTICE CANNOT CONFER ANY JUR ISDICTION ON THE AUTHORITY. ACCORDINGLY, IT WAS HELD THAT THE ENTIRE PROCEEDING S ARE BAD IN LAW. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT AT P AGE 82 READS AS UNDER : 15. THE PROCEEDINGS UNDER CHAPTER XTV-B AND THE PR OVISIONS OF SECTION 139 ARE DIFFERENT. A RETURN FILED UNDER SECTION 139 IS A VOLUNTARY RETURN, A RETURN UNDER CHAPTER XIV-B CANNOT BE FILED VOLUNTARILY, IT IS ON LY WHEN A 'NOTICE UNDER SECTION 158BC IS VALIDLY ISSUED, ONLY THEN A RETURN COULD B E FILED. IT IS NOT IN EVERY CASE THAT A NOTICE UNDER SECTION 158BC WOULD BE ISSUED BY THE R EVENUE. HOWEVER, AS AND WHEN VALIDLY ISSUED, IT IS ONLY THEN THAT A RETURN COULD BE FILED. WHEN ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNT OTH ER DOCUMENT OR ASSETS ARE REQUISITIONED UNDER SECTION 132A, IT IS ONLY THEN, THE ASSESSING OFFICER SHALL PROCEED 8 TO ASSESS THE UNDISCLOSED INCOME.- THEREFORE, SECTI ON 158BA PROVIDES FOR JURISDICTION TO THE ASSESSING OFFICER TO ASSESS THE UNDISCLOSED INCOME IN ACCORDANCE WITH CHAPTER XIV-B. SECTION 158BA(2) IS A CHARGING SECTION. SECTION 158BB PROVIDES FOR COMPUTATION OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND SECTION 158BC PROVIDES FOR PROCEDURE FOR BLOCK ASSESSMENT. THEREF ORE, A NOTICE UNDER SECTION 158BC CANNOT BE EQUATED WITH THAT OF NOTICE UNDER S ECTION 148. A NOTICE UNDER SECTION 158BC PROVIDES FOR A PROCEDURE TO BE ADOPTE D FOR BLOCK ASSESSMENT. UNDER THIS PROCEDURE ENVISAGED, THE AO SHALL SERVE A NOTICE RE QUIRING THE ASSESSEE TO FURNISH HIS RETURN WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS BUT NO T MORE THAN 45 DAYS AS SPECIFIED IN THE NOTICE. THEREFORE, THE TIME TO BE GRANTED TO THE A SSESSEE IN TERMS OF SECTION 158BC IS A MINIMUM OF 15 DAYS AND A MAXIMUM OF 45 DAYS. IF TH E SAID PERIOD OF TIME IS NOT GRANTED, THE NOTICE IS INVALID RENDERING THE ENTIRE PROCEEDI NGS AS WITHOUT JURISDICTION. ADMITTEDLY, IN THIS CASE, THE NOTICE UNDER SECTION 158BC CALLED UP ON THE ASSESSEE TO SUBMIT ITS RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS. WITHIN A PERI OD OF 15 DAYS IS LESS THAN 15 DAYS. THEREFORE, THE MANDATORY PERIOD OF TIME AS STIPULAT ED UNDER SECTION 158BC HAS NOT BEEN COMPLIED WITH. THE NOTICE, THEREFORE, IS INVALID. A N INVALID NOTICE CANNOT CONFER ANY JURISDICTION ON THE AUTHORITY. HENCE, THE ENTIRE PR OCEEDINGS ARE BAD IN LAW. THE NOTICE IS AB INITIO VOID. 10. SINCE IN THE INSTANT CASE ADMITTEDLY THE NOTICE U/S.158BC CALLED UPON THE ASSESSEE TO SUBMIT HIS RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS, THEREFORE, IN VIEW OF THE DECISION OF HONBLE KARNA TAKA HIGH COURT IN THE CASE OF MICRO LABS LTD. CITED SUPRA, THE NOTICE ISS UED BY THE AO IS INVALID. SINCE AN INVALID NOTICE CANNOT CONFER ANY JURISDICT ION ON THE AUTHORITY, THEREFORE, THE ENTIRE PROCEEDINGS ARE TO BE HELD AS BAD IN LAW SINCE THE NOTICE IS VOID AB-INITIO. 11. SO FAR AS THE ARGUMENT OF THE LEARNED DEPARTMEN TAL REPRESENTATIVE THAT IN VIEW OF PROVISIONS OF SECTION 292B IT IS A CURABLE DEFECT AND THE ASSESSMENT CANNOT BE HELD AS VOID, IN VIEW OF THE D ECISION OF AGRA BENCH OF THE TRIBUNAL IN THE CASE OF CHANDRA BHAN (SUPRA) WE FIND THE HONBLE HIGH COURT HAS ALSO DEALT WITH THIS ISSUE AND HELD THAT WHEN THE SUM AND SUBSTANCE OF THE NOTICE ISSUED TO THE ASSESSEE IS N OT IN CONFORMITY WITH THE PURPOSE OF THE ACT, SECTION 292B HAS NO APPLICATION . ACCORDINGLY, THE QUESTION WAS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT AT PAGES 83 AND 84 READ AS UNDER : 9 19. IT WAS CONTENDED BY THE REVENUE THAT THE NOTIC E UNDER SECTION 158BC CANNOT BE TREATED AS INVALID IN VIEW OF THE PROVISIONS AS CONTAINED IN SECTION 292B OF THE ACT. SECTION 292B OF THE ACT READS AS FOLLOWS : '292B. NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED T O HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL HE INVALID OR SHALL HE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTI CE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDIN G TO THE INTENT AND PURPOSE OF THIS ACT THE PURPORT OF SECTION 292B IS THAT IN THE EVENT OF ANY MISTAKE, DEFECT OR OMISSION IN THE NOTICE OR OTHER PROCEEDINGS, IF THE SAME IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT, THE NOTICE CANNOT BE TERMED AS INVALID. THE NOTICE SHOULD BE IN CONFORMITY WITH AND IN ACCORDANCE WITH THE INTENT AND PURPOSE OF THE ACT. THE INTENT AND PURPORT AS PROVIDED UNDER SECTI ON 158BC IS TO SERVE A NOTICE ON THE ASSESSEE BY PROVIDING A TIME OF NOT LESS THAN 1 5 DAYS AND NOT MORE THAN 45 DAYS, THIS IS THE PURPORT AND INTENT OF THE SECTION. NO E XTRA TIME CAN BE GRANTED SUBSEQUENTLY. TIME TO BE GRANTED IS A MINIMUM OF 1. 5 AND MAXIMUM OF 45 DAYS. THE SAME HAS TO BE SPECIFIED IN THE NOTICE. HENCE, GRAN T OF EXTRA TIME IS WITHOUT AUTHORITY OF LAW. IT CANNOT VALIDATE AN INVALID NOTICE. MOREOVER , IT IS RELEVANT TO NOTE THAT THE NOTICE ISSUED IS ON A PRINTED FORM WHEREIN THE DETAILS ARE REQUIRED TO BE FILLED UP. AT THE BOTTOM OF THE NOTICE, IS A PRINTED MATTER, WHICH RE ADS THAT THE TIME TO BE GRANTED SHALL NOT BE LESS THAN 15 DAYS. IN SPITE OF THIS, THE TIME GRANTED TO THE ASSESSEE IS LESS THAN 15 DAYS. THEREFORE, IT IS APPARENT THAT THERE HAS BEEN A VIOLATION OF LAW. THEREFORE, WHEN THE SUM AND SUBSTANCE OF THE NOTICE ISSUED TO THE ASSESSEE IS NOT IN CONFORMITY WITH THE PURPOSE OF THE ACT, SECTION 292 B HAS NO APPLICATION. HENCE, QUESTION NO.2 IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 12. IN THE LIGHT OF THE ABOVE DISCUSSION AND RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT CITED ABOVE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. SINCE TH E ASSESSEE SUCCEEDS ON THIS PRELIMINARY GROUND, THEREFORE, THE VARIOUS OTH ER GROUNDS RAISED BY THE ASSESSEE AS WELL AS THE REVENUE BEING ACADEMIC IN N ATURE ARE NOT BEING ADJUDICATED. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. HOWEV ER, WE MAKE IT CLEAR THAT NO REFUND SHALL BE GRANTED TO THE ASSESSEE TO THE E XTENT TAX HAS BEEN PAID IN CONSEQUENCE OF INCOME DECLARED IN VIEW OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHELLY PRODUCTS REPORT ED IN 261 ITR 367. 10 ITA NO.297/PN/2004 (BY REVENUE) AND CO NO.49/PN/20 04 (BY ASSESSEE) : 13. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : I. THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DEL ETING THE ADDITIONS MADE AT ` 4,23,845/- FOR A.Y. 2000-01, ` 12,08,550/- FOR A.Y. 2001-02 OF THE BLOCK ASSESSMENT. II. THE ADDITION OF ` 4,23,845/- FOR A.Y. 2000-01 WAS MADE ON THE BASIS O F SEIZED DOCUMENTS WHICH WERE NOT VERIFIABLE FROM BOO KS OF ACCOUNTS AND OTHER DOCUMENTS FOUND ON DATE OF SEARCH. III. THE CIT(A) HAS ERRED IN NOT CONSIDERING THE TW O ITEMS OF RECEIPTS, I.E. ` 3,70,500/- AND ` 18,120/- ADDED BY THE ASSESSING OFFICER ON THE BASI S OF SEIZED MATERIAL FOR A.Y. 2001-02 AND HAS ALSO ERRED IN NOT APPRECIATING THAT ACTUAL RECEIPTS AND EXPENSES WERE WORKED OUT ON THE BASIS OF SEIZED PAPER. IV. WHILE UPHOLDING A PART OF UNDISCLOSED INCOME OF ` 85,000/- IN RESPECT OF THE TRANSACTION, THE CIT(A) HAS ERRED IN NOT CONSID ERING THE OTHER PART AND THAT THE ADDITION OF ` 2,31,000/- FOR A.Y. 2002-03 WAS MADE ON THE BASIS O F CHART SHOWING RECEIPTS FROM PROJECT VENKATESH VARDHAN F URNISHED DURING ASSESSMENT PROCEEDINGS. 2. WHILE ALLOWING THE ABOVE RELIEF, THE CIT(A) HAS ERRED IN NOT GIVING OPPORTUNITY TO THE ASSESSING OFFICER DURING APPELLA TE PROCEEDINGS WHEREAS SUCH AN OPPORTUNITY WAS EXPLICITLY DESIRED AND SOUGHT TH ROUGH COLUMN NO.5 OF ITNS 51 BY THE AO. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) BE VACATED TO THIS EXTENT AND THAT OF AO BE RESTORED. 4. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AMEND, MODIFY THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 14 THE GROUNDS RAISED BY THE ASSESSEE IN THE CO ARE AS UNDER : 1.1 ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE DEPTT. APPEAL IS NOT MAINTAINABLE SINCE THE ASSESSMENT MADE IS ARBIT RARY, WITH UTMOST DISCRIMINATION AND IS REQUIRED TO BE JUDICIALLY HELD AS NON MAINTA INABLE OR NULL AND VOID. 2.1 THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION ON PROPORTIONATE BASIS AS AN UNDISCLOSED INCOME AT ` 11,790/- FOR A.Y. 2001-02 COMPARING THE ADVANCE TAX PAID AND TOTAL TAX PAYABLE. 2.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E INCOME CANNOT BE APPORTIONED AS AN UNDISCLOSED INCOME MERELY BECAUSE THERE IS A SHORT PAYMENT OF ADVANCE TAX. 2.3 THE ADDITION OF ` 11,790/- AS AN UNDISCLOSED INCOME FOR THE ASSTT. YE AR 2001- 2002 BE DELETED. 3.1 THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF ` 85,000/- AS UNDISCLOSED INCOME FOR THE ASSTT. YEAR 2002-03 BEIN G ADVANCE RECEIVED AGAINST VENKATESH VARDHAN SCHEME WHICH WAS JUST STARTED AT THE TIME OF ACTION. 3.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E ENTIRE RECEIPT CANNOT BE CONSIDERED AS INCOME. 3.3 THE ADDITION OF ` .85,000/- RECEIVED AS ADVANCE AS AN UNDISCLOSED INC OME BE DELETED. 11 4.1 THE LEARNED CIT(A) ERRED IN CONFIRMING LEVY OF INTEREST UNDER SEC.158BFA(1). 4.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E RETURN OF INCOME AS IN FACT BEEN FURNISHED WITHIN THE 45 DAYS AND AS SUCH THE I NTEREST UNDER SEC.L58BFA(1) IS NOT LEVIABLE. 4.3 THE A.O. MAY BE DIRECTED TO DELETE THE INTEREST CHARGED UNDER SEC.158BFA(1). 5.1 THE ASSESSMENT IS ILLEGAL, OUT OF TIME, TIME BA RRED AND THEREFORE, BE DECLARED AS NULL AND VOID. 6.1 THE APPELLANT CRAVES TO LEAVE, ADD, AMEND OR AL TER ANY OF THE ABOVE GROUNDS OF APPEAL. 15. THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUN D IN THE CO WHICH READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE MANDATORY NOTICE U/S.158BC OF THE ACT ISSUED AND SERVED CALLI NG FOR THE RETURN WITHIN FIFTEEN DAYS IS BAD IN LAW AND CONSEQUENT BLOCK AS SESSMENT MADE IN PURSUANCE OF SUCH ILLEGAL NOTICE IS ALSO BAD IN LAW AND WITHO UT JURISDICTION. 16. AFTER HEARING BOTH THE SIDES, THE ADDITIONAL GR OUND IN THE CO FILED BY THE ASSESSEE, BEING A LEGAL ONE IS ADMITTED FOR ADJ UDICATION. 17. AFTER HEARING BOTH THE SIDES WE FIND THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S.158BC IN THE CASE OF THE ASSE SSEE IS IDENTICAL TO THE NOTICE ISSUED IN THE CASE OF SHRI ABHIJIT SURESH JA DHAV VIDE ITA NO.652/PN/2004. WE HAVE ALREADY DECIDED THE PRELIM INARY GROUND RAISED BY THE ASSESSEE IN THE ABOVE MENTIONED APPEAL AND H ELD THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER WAS INVALID AND AN INVALID NOTICE CANNOT CONFER ANY JURISDICTION ON THE AUTHORITY. ACCORDIN GLY, THE ENTIRE PROCEEDINGS ARE HELD AS BAD IN LAW AND THE ASSESSME NT WAS ACCORDINGLY QUASHED. FACTS IN THE IMPUGNED APPEAL BEING SIMILA R, THEREFORE, FOLLOWING THE SAME RATIO THE ASSESSMENT IN THE INSTANT CASE I S HELD TO BE INVALID AND ACCORDINGLY THE ADDITIONAL GROUND RAISED BY THE ASS ESSEE IN THE CO IS ALLOWED. SINCE THE ASSESSEE SUCCEEDS ON THIS PRELI MINARY GROUND, THEREFORE, 12 THE OTHER GROUNDS IN THE CROSS OBJECTION AS WELL AS THE GROUNDS BY THE REVENUE BECOME ACADEMIC IN NATURE AND THEREFORE ARE NOT BEING ADJUDICATED. 18. IN THE RESULT, ITA NO.652/PN/2004 AND CO NO. 49 /PN/2004 ARE ALLOWED AND THE APPEALS FILED BY THE REVENUE IN ITA NO.616/PN/2004 AND ITA NO.297/PN/2004 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF MARCH, 2013. SD/- SD/- (R.S.PADVEKAR ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED THE 19 TH MARCH 2013. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.