Mr. Rasiklal Manikchand Dhariwal (HUF), Pune V. Jt.CIT,Spl. Range,5, Pune, Pune

ITA 760/PUN/2000

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56529 (ITAT-PUNE)
• Duration Of Justice: 11 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-09-2011
• Assessment Year: misc
• Appeal Filed On: 05-06-2000
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Validity of assessment; Procedural lapse; Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER SR.NO ITA NO. BLOCK ASSTT. PERIOD APPELLANT VS. RESPONDENT 1. 760 /PN/20 00 1988 - 89 TO 1998- 99 MR.RASIKLAL MANIKCHAND DHARIWAL,DEALING CHAMBERS, J.M. ROAD, PUNE 4 PAN: NOT AVAILABLE VS. JT CIT, SPECIAL RANGE 5, PMT BLDG, SWARGATE, PUNE 2. 761 /PN/20 00 - DO - MR. PRALASH RASIKLAL DHARIWAL, DEALING CHAMBERS, J.M. ROAD, PUNE 4 PAN: NOT AVAILABLE VS. - DO - 3. 7 6 4 /P N/20 00 - DO - MR. RASIKLAL M ANIKCHAND DHARIWAL DEALING CHAMBERS, J.M. ROAD, PUNE 4 PAN: NOT AVAILABLE VS. - DO - 4. 7 6 5 /PN/20 00 - DO - MRS.SHOBHA RASIKLAL DHARIWAL, 64, KOREGAON PARK, PUNE 411 001 PAN; NOT AVAILABLE VS. - DO - APPELLANT BY : SHRI KISHORE PHADKE DEPARTMENT BY : SHRI. S.K. SINGH DATE OF HEARING :14.9.11 DATE OF PRONOUNCEMENT: 08 .11.11 ORDER PER I.C. SUDHIR, JM IN THESE APPEALS PREFERRED BY THE ASSESSEE, THE AD DITION UPHELD BY THE LD CIT(A) WHICH WAS MADE BY THE A.O ON THE BASIS OF PA PERS FOUND DURING THE COURSE OF SEARCH HAS BEEN QUESTIONED ON SEVERAL GROUNDS. 2. BESIDES ABOVE, AN APPLICATION REQUESTING THE ADJ UDICATION OF THE ADDITIONAL GROUND BY THE BENCH HAS BEEN MOVED. THE PROPOSED A DDITIONAL GROUND IS REPRODUCED BELOW : THE BLOCK ASSESSMENT ORDER DATED 30-07-1999 PASSED UNDER SECTION 158BC OF INCOME-TAX ACT (THE ACT) IS INVALID, BAD IN LAW, WITHOUT JURISDICTION AND VOID ITA . NOS. 760,761,764 & 765/PN/ 2000 RASIKLAL MANIKCHAND DHARIWAL, PRAKASH RASIKLAL DHARIWAL ETC., A.Y. 2004-05 BLOCK ASSESSMENT PERIOD: 88-89 TO 98-99 ETC. PAGE OF 5 2 AB-INITIO AS NO NOTICE WAS ISSUED IN THIS CASE BY T HE ASSESSING OFFICER AS REQUIRED UNDER SECTION 143(2) OF THE ACT. 3. IN SUPPORT OF THE APPLICATION, THE LD A.R. SUBMI TTED THAT THE ISSUE RAISED IS LEGAL IN NATURE WHICH GOES TO THE ROOT OF THE MATTE R AND ADJUDICATION OF THE SAME DOES NOT NEED CONSIDERATION OF FRESH MATERIAL OUTSI DE THE RECORD. 4. THE LD. CIT D.R. OPPOSED THE APPLICATION WITH T HIS SUBMISSION THAT THE ASSESSEE DID NOT RAISE SUCH OBJECTION BEFORE THE A. O , INSTEAD HE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. HE FILED BLOCK RETURN OF I NCOME IN RESPONSE TO NOTICE ISSUED U/S. 158BC OF THE ACT. THUS, THE APPLICATIO N SHOULD NOT BE ENTERTAINED AT THIS BELATED STAGE BEFORE THE TRIBUNAL. 5. CONSIDERING THE ABOVE SUBMISSION, WE AGREED WITH THE SUBMISSION OF THE LD. A.R. THAT THE ISSUE RAISED IN THE ADDITIONAL GROUND IS LEGAL IN NATURE WHICH GOES TO THE ROOT OF THE MATTER AND ADJUDICATION OF THE SAME DOES NOT NEED CONSIDERATION OF FRESH MATERIAL OUTSIDE THE RECORD. WE THUS ALLOWED THE ADDITIONAL GROUND FOR OUR CONSIDERATION AND HEARD THE PARTIES. 6. IN SUPPORT OF THE ADDITIONAL GROUND, THE LD. A.R . SUBMITTED THAT NOTICE U/S. 143(2) WAS NOT SERVED UPON THE ASSESSEE, HENCE THE BLOCK ASSESSMENT IN ABSENCE OF SERVICE OF SUCH NOTICE WHICH IS MANDATORY IN NAT URE IS VOID AB-INITIO. IN SUPPORT, HE PLACED RELIANCE ON THE RECENT DECISION OF HONBL E SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (2010), 321 ITR 362 (SC). 7. THE LD. CIT D.R, ON THE OTHER HAND, SUBMITTED TH AT NO SUCH OBJECTION WAS RAISED BEFORE THE A.O. THE ASSESSEE PARTICIPATED I N THE ASSESSMENT PROCEEDINGS, HENCE HE CANNOT BE ALLOWED TO RAISE SUCH ISSUE AT T HIS STAGE. IN THIS REGARD, HE REFERRED CONTENTS OF SECTION 292BB OF THE ACT MAKIN G IT CLEAR THAT WHERE AN ITA . NOS. 760,761,764 & 765/PN/ 2000 RASIKLAL MANIKCHAND DHARIWAL, PRAKASH RASIKLAL DHARIWAL ETC., A.Y. 2004-05 BLOCK ASSESSMENT PERIOD: 88-89 TO 98-99 ETC. PAGE OF 5 3 ASSESSEE HAS APPEARED IN ANY PROCEEDINGS OR CO-OPER ATED IN ANY ENQUIRY RELATING TO AN ASSESSMENT OR A RE-ASSESSMENT, IT SHALL BE DEEME D THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERV ED UPON HIM, HAS BEEN DULY SERVED UPON HIM, IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSMENT SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR ANY ENQUIRY UNDER THIS ACT THAT NOTICE WAS NOT SERVED UPON HIM. THE L D. D.R. SUBMITTED UNDER PROVISO TO SECTION 292 BB, IT HAS BEEN MADE CLEAR FURTHER T HAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED S UCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR RE-ASSESSMENT. 8. IN VIEW OF THE DECISION OF THE HONBLE SUPREME C OURT, IN THE CASE OF ACIT VS. HOTEL BLUE MOON (SUPRA) RELIED UPON BY THE LD A.R, WE AFFORDED OPPORTUNITY TO THE LD. D.R. TO VERIFY THE RECORD AS TO WHETHER NOTICE U/S. 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE OR NOT. THE LD. D.R. IN THIS REG ARD SOUGHT INFORMATION FROM THE AUTHORITY CONCERNED, WHO HAS REPLIED VIDE LETTER DA TED 12.9.2011 ADDRESSED TO THE LD CIT D.R. IN THE SAID LETTER DATED 12.9.2011, THE LD ACIT HAS ATTACHED LETTER DATED 26.2.2009 WHEREIN ON THE QUERY REGARDING ISSU ANCE OF NOTICE U/S. 143(2) IN THE CASE OF SHRI RASIKLAL DHARIWAL (HUF), ITA NO. 760/PN/2000, SHRI PRAKASH DHARIWAL, ITA NO. 761/PN/2000 AND SMT. SHOBHA DHARI WAL, ITA NO. 765/PN/2000, IT HAS BEEN INFORMED THAT CASE RECORDS IN RESPECT OF O NLY SHRI RASIKLAL DHARIWAL (HUF) IS AVAILABLE WITH THEIR OFFICE. IT HAS BEEN FURTHE R INFORMED THAT ON VERIFICATION OF RECORDS OF SHRI RASIKLAL DHARIWAL (HUF), IT WAS FOU ND AS 5. ON VERIFICATION OF THE RECORD OF THE ASSESSEE AVAILABLE WITH THIS OFFICE, ANY NOTICE ISSUED U/S. 143(2) WAS NOT FOUND. AGAIN IN THE LETTER DATED 12.9.2011, TH E LD ACIT HAS REITERATED THAT ONLY THE CASE RECORDS OF SHRI RASIKLAL M. DHARIWAL (HUF) FOR THE BLOCK PERIOD IS AVAILABLE ON WHICH THE REQUIRED INFORMATION HAS ALREADY BEEN FURNISHED AND CASE RECORDS OF OTHER ASSESSEES ARE NOT AVAILABLE TO HIS OFFICE, HE NCE CLAIM OF THE ASSESSEE THAT THE NOTICE U/S. 143(2) WAS NOT ISSUED/SERVED UPON HIM C OULD NOT BE VERIFIED BY HIM. ITA . NOS. 760,761,764 & 765/PN/ 2000 RASIKLAL MANIKCHAND DHARIWAL, PRAKASH RASIKLAL DHARIWAL ETC., A.Y. 2004-05 BLOCK ASSESSMENT PERIOD: 88-89 TO 98-99 ETC. PAGE OF 5 4 WE THUS FIND THAT THE REVENUE HAVE SPECIFICALLY ACC EPTED THAT IN THE CASE OF SHRI RASIKLAL M. DHARIWAL (HUF), NOTICE U/S. 143(2) WAS NOT FOUND ISSUED ON VERIFICATION OF THE RECORD AND SO FAR AS OTHER ASSESSEES ARE CON CERNED, THE REVENUE REMAINED UNABLE TO REBUT THE CLAIM OF THOSE ASSESSEES THAT NOTICE U/S. 143(2) WERE NOT SERVED UPON THEM. HAVING GONE THROUGH THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (SUPRA), WE FIND THAT THE HONBLE SUPREME COURT AFTER DETAILED DELIBERATIONS ON THE ISSUE HAS BEEN PLEASED TO COME TO THE CONCLUSION THAT WHERE THE A.O IN REPUDIATION OF THE RETURN FILED U/S. 158BC(A ) PROCEEDS TO MAKE AN ENQUIRY, HE HAS TO NECESSARILY FOLLOW THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) & (3) OF SECTION 143. THE HO NBLE SUPREME COURT HAS UPHELD THE DECISION OF HONBLE GAUHATI HIGH COURT THAT IF AN ASSESSMENT IS TO BE COMPLETED U/S. 143(3) READ WITH SECTION 158BC, NOTICE U/S. 14 3(2) SHOULD BE ISSUED WITHIN 1 YEAR FROM THE DATE OF FILING OF THE BLOCK RETURN, O MISSION ON THE PART OF THE AUTHORITY TO ISSUE NOTICE U/S. 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQUIREMENT OF NOTICE U/S. 143(2) CA NNOT BE DISPENSED WITH. RESPECTFULLY FOLLOWING THIS RELIED DECISION OF HON BLE SUPREME COURT ON THE ISSUE, WE HOLD THAT THE ASSESSMENTS IN QUESTION WITHOUT ISSUI NG/SERVICE OF NOTICE U/S. 143(2) UPON THE ASSESSEES WITHIN THE PRESCRIBED TIME LIMIT I.E. 1 YEAR FROM THE DATE OF FILING OF THE BLOCK RETURN IS VOID AB-INITIO. THE SAME AR E ACCORDINGLY QUASHED. THE ISSUE RAISED IN THE ADDITIONAL GROUND IS THUS DECIDED IN FAVOUR OF THE APPELLANTS. 9. IN VIEW OF THE ABOVE DECISION ON THE VALIDITY OF ASSESSMENTS IN QUESTION, THE OTHER GROUNDS RAISED AGAINST THE FIRST APPELLATE OR DER ON THE MERITS OF THE ADDITION MADE IN THE BLOCK ASSESSMENTS HAVE BECOME ACADEMIC AND THUS DO NOT NEED ADJUDICATION. 10. IN RESULT, APPEALS ARE ALLOWED. ITA . NOS. 760,761,764 & 765/PN/ 2000 RASIKLAL MANIKCHAND DHARIWAL, PRAKASH RASIKLAL DHARIWAL ETC., A.Y. 2004-05 BLOCK ASSESSMENT PERIOD: 88-89 TO 98-99 ETC. PAGE OF 5 5 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 8TH NOVEMBER 2011. SD/- SD/- ( D. KARUNAKARA RAO ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 8TH NOVEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT - CONCERNED, PUNE 4. THE CIT(A)-I, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE