Shri Sanghvi Onkarmal Ratanlal & Co, Pune V. Asst. CIT, Central Circle 1(2), Pune

ITA 937/PUN/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9384 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-09-2016
• Assessment Year: misc
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Search and seizure; Period of limitation; Validity of assessment; Block assessment; Bogus loan; Revised return; Documents seized
• Section: 145; 148; 132; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 886 /PUN/201 3 BLOCK PERIOD : 1996 - 97 TO 2002 - 03 INCOME TAX OFFICER, WARD 5(3), PUNE ....... / APPELLANT / V S. SHRI SANGHVI ONKARMAL RATANLAL & CO., 31 - A, TIMBER MARKET, PUNE 411042 PAN : AAEFS3889D / RESPONDENT . / ITA NO . 937/PUN/2013 BLOCK PERIOD : 1996 - 97 TO 2002 - 03 SHRI SANGHVI ONKARMAL RATANLAL & CO., MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, BUSINESS BAY, PLOT NO. 84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 PAN : AAEFS3889D ....... / APPELLANT /VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), PUNE / RESPONDENT ASSESSEE BY : SHRI N EELESH KHANDELWAL REVENUE BY : S HRI HITENDRA NINAWE / DATE OF HEARING : 12 - 04 - 2017 / DATE OF PRONOUNCEMENT : 31 - 0 5 - 2017 2 ITA NO S. 886 & 937/PUN/2013 / ORDER PER VIKAS AWASTHY, JM : TH ESE CROSS APPEALS BY THE DEPARTMENT AND THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - CENTRAL, PUNE DATED 31 - 01 - 2013 FOR THE BLOCK ASSESSMENT PERIOD 1996 - 97 TO 2002 - 03. 2. THE DEPARTMENT IN ITS APPEAL HAS ASSAILED T HE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF RS.21,00,000/ - MADE ON ACCOUNT OF BOGUS LOAN ENTRIES SHOWN FROM M/S. RAJASHREE ENTERPRISES AND M/S. MAHESHWARI FINANCIERS. 3. THE ASSESSEE ON THE OTHER HAND IN APPEAL HAS CHA LLENGED THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S. 158BC(C) R.W.S. 158BD AND 189 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). THE ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF ASSESSMENT ORDER ON THE GROUND OF LIMITATION. APART FROM CHALLENGING THE ASSESSMENT ORDER ON TECHNICAL GROUND , THE ASSESSEE IN ALTERNATE SUBMISSION HAS ASSAILED THE ADDITIONS CONFIRMED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON MERITS. 4. SHRI NEELESH KHANDELWAL APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISES OF SANGHVI GROUP ON 11 - 10 - 2001. INITIALLY, NOTICE U/S. 158BC WAS ISSUED ON 06 - 05 - 2002 IN THE NAME OF ONKARMAL RATANLAL & CO.. IN RESP ONSE TO THE SAID NOTICE THE ASSESSEE VIDE LETTER DATED 21 - 06 - 2002 INFORMED THE 3 ITA NO S. 886 & 937/PUN/2013 DEPARTMENT THAT THERE IS NO SUCH FIRM IN EXISTENCE AT THE GIVEN ADDRESS. THE LD. AR REFERRED TO THE NOTICE DATED 06 - 05 - 2002 AND THE REPLY OF THE ASSESSEE DATED 21 - 06 - 2002 AT PA GES 1 AND 2 OF THE PAPER BOOK. THEREAFTER, SECOND NOTICE U/S. 158 BC WAS ISSUED ON 30 - 10 - 2002 IN THE NAME OF M/S. SANGHAVI ONKARLAL RATANLAL & CO. (RF). AGAIN THE ASSESSEE VIDE COMMUNICATION DATED 29 - 11 - 2002 INFORMED THE ASSESSING OFFICER THAT AT THE G IVEN ADDRESS NO FIRM EXISTS BY THE SAID NAME. THE LD. AR REFERRED TO THE COPY OF NOTICE AT PAGE 3 AND THE REPLY OF THE ASSESSEE AT PAGE 4 OF THE PAPER BOOK. THEREAFTER, NOTICE U/S. 158BD WAS ISSUED BY THE DEPARTMENT ON 16 - 10 - 2003 IN THE NAME OF ASSESSEE. A COPY OF THE NOTICE AT PAGE 5 OF THE PAPER BOOK. HOWEVER, THE SAID NOTICE WAS NEVER RECEIVED BY THE ASSESSEE. THE LD. AR POINTED THAT BEFORE ISSUING THE AFORESAID NOTICE THE DEPARTMENT DROPPED THE PROCEEDINGS INITIATED U/S. 158BC FOR TECHNICAL REASONS . THE LD. AR REFERRED TO THE S ATISFACTION N OTE RE PRODUCED IN THE APPELLATE ORDER IN PARA 5.14 AT PAGE 23 OF THE IMPUGNED ORDER. 4 .1 THE LD. AR SUBMITTED THAT A PERUSAL OF S ATISFACTION N OTE DATED 15 - 10 - 2003 WOULD MAKE IT CLEAR THAT NO VALID SEARCH WAS M ADE BY THE DEPARTMENT. IT IS EVIDENT FROM THE S ATISFACTION N OTE THAT WARRANT WAS ISSUED IN THE NAME OF ONKARMAL RATANLAL & CO. A NON - EXISTING FIRM. THE LD. AR FURTHER POINTED THAT ONCE THE PROCEEDINGS INITIATED U/S. 158BC ARE DROPPED THERE IS NO QUESTION OF INITIATING ACTION U/S. 158BD OF THE ACT AGAINST PERSON OTHER THAN SEARCHED PERSON . 4 .2 THE LD. AR FURTHER CHALLENGED THE PROCEEDINGS U/S. 158BD ON THE GROUND THAT NOTICE ISSUED TO THE ASSESSEE U/S. 158BD IS NOT VALID. F OR INITIATING BLOCK A SSESSMENT PROCEEDINGS U/S. 158BD THE NOTICE HAS TO 4 ITA NO S. 886 & 937/PUN/2013 BE ISSUED U/S. 158BC OF THE ACT. IN THE PRESENT CASE NOTICE HAS BEEN ISSUED U/S. 158BD OF THE ACT. IN SUPPORT OF HIS CONTENTIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. ANNAPOORNAMMA CHANDRASHEKAR REPORTED AS 353 ITR 55 AND THE DECISION OF CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DY. COMMISSIONER OF INCOME TAX VS. M/S. KALPAK PLY IN ITA NO. 1782/PN/2013 FOR BLOCK PERIOD 1996 - 97 TO 2002 - 03 DECIDED ON 26 - 08 - 2015. 4 .3 THE LD. AR FURTHER ASSAILED THE ASSESSMENT ORDER ON THE GROUND OF LIMITATION. THE LD. AR SUBMITTED THAT THE NOTICE U/S. 158BD WAS ISSUED TO THE ASSESSEE ON 16 - 10 - 2003 I.E. AFTER MORE THAN 2 YEARS FRO M THE DATE OF SEARCH. THE ASSESSMENT ORDER IS PASSED ON 28 - 10 - 2005. THUS, THE ASSESSMENT ORDER HAS BEEN PASSED BEYOND THE PERIOD OF LIMITATION . 5 . ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS O F COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE VALIDITY OF ASSESSMENT U/S. 158BD OF THE ACT. THE LD. DR SUBMITTED THAT THE NAME OF THE ASSESSEE WAS NOT INCLUDED IN THE SEARCH WARRANT , T HEREFORE, NOTICE U/S. 158BD WAS ISSUED TO THE ASSESSEE. THE LD. DR POINTED THAT THE ASSESSEE HAD RAISED THE ISSUE OF VALIDITY OF ASSESSMENT PROCEEDINGS AND ISSUANCE OF NOTICE U/S. 158BD BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HAS CATEGORICALLY POINTED THAT PROCEEDI NGS U/S. 158BD W ERE INITIATED AGAINST THE ASSESSEE AS A CONSEQUENCE OF DOCUMENTS SEIZED DURING THE SEARCH. THE LD. DR 5 ITA NO S. 886 & 937/PUN/2013 VEHEMENTLY SUPPORTING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) PRAYED FOR DISM ISSING THE APPEAL FILED BY THE ASSESSEE. 6 . IN RESPECT OF APPEAL FILED BY THE DEPARTMENT THE LD. DR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.21,00,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS LOAN ENTRIES. DURING THE COURSE OF ASSES SMENT PROCEEDINGS IT WAS FOUND THAT M/S. RAJASHREE ENTERPRISES AND MAHESHWARI FINANCIERS PROVIDED LOAN ENTRIES TO THE ASSESSEE. THE MODUS OPERANDI OF THESE TWO CONCERNS WERE THAT CASH WAS TAKEN FROM THE PARTIES AND DEPOSITED IN THE BANK ACCOUNT OF THE AFO RESAID FIRMS . THEREAFTER, CHEQUE EQUIVALENT TO THE CASH ALREADY TAKEN WERE ISSUED BY THE AFORESAID FIRMS TO THE PARTIES FROM WHOM CASH WAS RECEIVED. SIMILAR, TRANSACTIONS WERE CARRIED OUT BY THE ASSESSEE WITH THE ABOVE SAID FIRMS. THUS, IT WAS ASSESSEE S OWN CASH WHICH WAS CIRCULATED THROUGH THE BANK ACCOUNT OF THE AFORESAID FIRMS TO GIVE THE COLOUR OF LOAN. THE LD. DR FURTHER REFERRED TO THE FINDINGS OF ASSESSING OFFICER ON THIS ISSUE IN PARAS 22 AND 23 OF THE ASSESSMENT ORDER. 7 . W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . WE HAVE ALSO CONSIDERED THE DOCUMENTS AND THE DECISIONS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE DURING THE COURSE OF SUB MISSIONS. THE ASSESSEE HAS CHALLENGED THE ASSESSMENT PROCEEDINGS U/S. 158BD ON THREE COUNTS. THE FIRST GROUND TAKEN BY THE ASSESSEE IN CHALLENGING THE ASSESSMENT PROCEEDINGS IS THAT ONCE THE ASSESSMENT PROCEEDINGS U/S. 158BC ARE DROPPED, ASSESSMEN T PROCEEDINGS U/S. 158BD CANNOT BE CARRIED OUT AGAINST THE PERSON OTHER THAN SEARCH ED 6 ITA NO S. 886 & 937/PUN/2013 PERSON. A PERUSAL OF THE DOCUMENTS ON RECORD SHOW THAT THE FIRST NOTICE U/S. 158BC DATED 06 - 05 - 2002 WAS ISSUED IN THE NAME OF ONKARMAL RATANLAL & CO.. SINCE, THERE WA S NO FIRM BY TH E SAID NAME, THE NOTICE WAS CANCELLED. ANOTHER NOTICE U/S. 158BC DATED 30 - 10 - 2002 IN THE NAME OF M/S. SANGHAVI ONKARLAL RATANLAL & CO. (RF) WAS ISSUED . THAT WAS ALSO CANCELLED AS NO FIRM BY THAT NAME EVER EXISTED AT THE GIVEN ADDRESS. IN VIEW OF THE FACT THAT THE TWO NOTICES U/S. 158BC WERE IN THE NAME OF NON - EXISTING FIRMS COUPLED WITH THE FACT THAT SEARCH WARRANT WAS ALSO ISSUED IN THE NAME OF ONKARLAL RATANLAL & CO., A NON - EXISTING FIRM THE DEPARTMENT DROPPED THE PROCEEDINGS INITIATED U/S. 158BC ON ACCOUNT OF TECHNICAL DEFECT. 8 . SEARCH AND SEIZURE PROCEEDINGS ARE CARRIED OUT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 132 OF THE ACT. THE WARRANT OF AUTHORIZATION IS THE FOUNDATION OF ENTIRE SEARCH PROCEEDINGS. A BARE PERUSAL OF PROVISIONS OF SECTION 132(1) SHOWS THAT THE WARRANT OF AUTHORIZATION IS ISSUED AGAINST ANY PERSON SUBJECT TO THE CONDITIONS LAID DOWN U/S. 132(1) OF THE ACT. THUS, THE WARRANT OF AUTHORIZATION IS PERSON SPECIFIC AND NOT PREMISES OR PLACE SPECIFIC. THE PLACE OR PREMISE MAY OR MAY NOT BE SPECIFIED IN THE WARRANT. IN THE PRESENT CASE THE WARRANTS WERE ISSUED IN THE NAME OF ONKARMAL RATANLAL & CO., A NON - EXISTING FIRM , T HEREFORE, THE FIRST STEP TOWARDS THE SEARCH TAKEN BY THE DEPARTMENT IS FLAWED. REALI ZING THIS MISTAKE THE DEPARTMENT DROPPED THE PROCEEDINGS U/S. 158BC OF THE ACT. ONCE, THE PROCEEDINGS U/S. 158BC ARE DROPPED ON ACCOUNT OF TECHNICAL DEFECT THE SUBSEQUENT PROCEEDINGS ARE VITIATED. THE PROVISIONS RELATING TO BLOCK ASSESSMENT IN SEARCH CAS ES ARE CONTAINED IN CHAPTER XIV - B OF THE ACT. THE CHAPTER IS AN INDEPENDENT CODE. THE POWER TO SEARCH AND SEIZE ARE 7 ITA NO S. 886 & 937/PUN/2013 CONFERRED ON TAX AUTHORITY U/S. 132 OF THE ACT. THE POWERS EXERCISED BY THE TAX AUTHORITY UNDER SPECIAL CODE ARE EXTRA ORDINARY POWERS. IT THEREFORE, BECOMES NECESSARY TO CONSTRUE THE PROVISIONS OF SPECIAL C ODE STRICTLY. 9 . THE LD. AR HAS POINTED THAT THE NOTICE ISSUED U/S. 158BD IS INVALID AS FOR INITIATING ANY ACTION UNDER THE PROVISIONS OF SECTION 158BD , THE NOTICE HAS TO BE GIVEN IN ACCORDANCE WITH THE PROVISIONS OF SECTION 158BC OF THE ACT. BEFORE PROCEEDINGS FURTHER IT WOULD BE RELEVANT TO FIRST REFER PROVISIONS OF SECTION 158BD ARE REPRODUCED HERE - IN - BELOW : 158BD. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SECTION 132A, THEN, THE BOOKS OF ACCOUNT, OTHER 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 13[UNDER SECTION 158BC] AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPL Y ACCORDINGLY. A PERUSAL OF PROVISIONS OF SECTION 158BD MAKE IT UNAMBIGUOUS CLEAR THAT FOR INITIATING ANY ACTION AGAINST THE PERSON OTHER THAN THE PERSON IN RESPECT OF WHOM SEARCH WAS MADE U/S. 132 , THE ASSESSING OFFICER HAS TO FOLLOW THE PROCEDUR E SET OUT U/S. 158BC AGAINST SUCH OTHER PERSON. IN OTHER WORDS, WHERE THE ACTION U/S. 158BD HAS TO BE TAKEN ON THE PERSON OTHER THAN THE SEARCHED PERSON , THE ASSESSING OFFICER CAN ARRIVE AT THE SATISFACTION ONLY AFTER ASCERTAINING WHETHER THERE IS ANY UND ISCLOSED INCOME AT ALL AND THIS FINDING CAN BE ARRIVED AT HIM ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 158BC OF THE ACT. IN THE PRESENT CASE SINCE PROCEEDING U/S. 158BC HAVE BEEN 8 ITA NO S. 886 & 937/PUN/2013 DROPPED THERE IS NO QUESTION OF INITIATION PROCEEDINGS U/S. 158BD O F THE ACT. THE ROAD TO SECTION 158BD PASS THROUGH S ECTION 158BC. IN THE PRESENT CASE SINCE THERE IS NO ASSESSMENT U/S. 158BC, THE PROCEEDING U/S. 158BD HAS TO FAIL. 10. IN THE PRESENT CASE, WE FIND THAT THE NOTICE HAS BEEN ISSUED IN THE NAME OF ASSESSEE U/S. 158BD OF THE ACT. A COPY OF THE NOTICE IS AT PAGE 5 OF THE PAPER BOOK. IN VIEW OF THE MANDATE OF SECTION 158BD THAT THE ASSESSING OFFICER HAS TO PROCEED U/S. 158BC, WE ARE OF THE CONSIDERED VIEW THAT FOR INITIATING PROCEEDINGS U/S. 158BD , N OTICE HAS TO BE ISSUED U/S. 158BC OF THE ACT. THUS, IN THE INSTANT CASE THE LAUNCHING PAD OF INITIATING ASSESSMENT PROCEEDINGS U/S. 158BD ITSELF SUFFERS FROM DEFECT. A PERUSAL OF SECTION 158BD REVEAL THAT THE WORDS UNDER SECTION 158BC WERE INSERTED BY THE FINANCE ACT, 2002 W.E.F. 01 - 06 - 2002. THE PROVISIONS OF SECTION 158BD PRIOR TO THIS AMENDMENT PROVIDED FOR INITIATING ACTION AGAINST THE PERSON OTHER THAN SEARCHED PERSON UNDER THE PROVISIONS OF CHAPTER XIB - B. THUS, THE ONLY PROCEDURE FOR BLOCK ASSES SMENT UNDER THIS CODE IS GIVEN U/S. 158BC OF THE ACT. THE AMENDMENT IS THUS CLARIFICATORY IN NATURE. 1 1 . THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. ANNAPOORNAMMA CHANDRASHEKAR (SUPRA) HAS CLARIFIED THIS ASPECT . IN THE SAID CASE, ASSESSMENT PROCEEDINGS WERE INITIATED U/S. 158BD AND THE NOTICE WAS ISSUED TO THE PERSON OTHER THAN SEARCHED U/S. 158BC . T HE NOTICE WAS CHALLENGED ON THE GROUND THAT SINCE, THE BLOCK ASSESSMENT PROCEEDINGS ARE INITIATED AGAINST THE AS SESSEE U/S. 158BD THE NOTICE ISSUED U/S. 158BC IS VOID AB INITIO. THE HONBLE HIGH COURT REJECTING THE PLEA OF ASSESSEE UPHELD THE VALIDITY OF NOTICE U/S. 158BC . THE HONBLE HIGH COURT HELD : 9 ITA NO S. 886 & 937/PUN/2013 THUS BY FINANCE ACT 2002, WHICH CAME INTO EFFECT FROM 01 - 06 - 2 002 THE WORD 'UNDER SECTION 158BC' IS INTRODUCED. PRIOR TO THE SAID AMENDMENT IF ANY ASSESSMENT HAS TO BE MADE OF UNDISCLOSED INCOME OF ANY OTHER PERSON THE PROVISIONS OF CHAPTER XIV - B WAS MADE APPLICABLE. AS IS CLEAR FROM THE WORDINGS OF THE SAID SECTION THAT IF THE AO SEIZES THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR OF ANY OTHER PERSON OTHER THAN THE PERSON WHOSE PREMISES IS SEARCHED HE SHALL PROCEED AGAINST SUCH OTHER PERSON UNDER THE PROVISIONS OF CHAPTER XIV - B. THERE WAS NO PROVISION IN THE SAID SECTI ON AS SUCH FOR ISSUE OF ANY NOTICE TO SUCH PERSON. SEC. 158BC PROVIDES FOR PROCEDURE FOR BLOCK ASSESSMENT WHICH READS AS UNDER: - '158BC. WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER S. 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER S. 132A, IN THE CASE OF ANY PERSON, THEN: - (A) THE AO SHALL: - (I) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30TH DAY OF JUNE, 1995, BUT BEFORE THE 1 ST DAY OF JANUARY, 1997, SERVE A NO TICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS; (II) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER THE 1 ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS BUT NOT MORE THAN FORTY - FIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE A RETURN IN THE PRESCRIBED FORM AND VERIFIED IN THE SAME M ANNER AS A RETURN UNDER CL. (I) OF SUB - S. (1) OF S. 142, SETTING FORTH HIS TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD: - PROVIDED THAT NO NOTICE UNDER S. 148 IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER THIS CHAPTER: - PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BE ENTITLED TO FILE A REVISED RETURN; 10 ITA NO S. 886 & 937/PUN/2013 (B) THE AO SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN S. 158BB AND THE PROV ISIONS OF S. 142, SUB - SS. (2) AND (3) OF S. 143, S. 144 AND S. 145 SHALL, SO FAR AS MAY BE, APPLY; (C) THE AO, ON DETERMINATION OF THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN ACCORDANCE WITH THIS CHAPTER, SHALL PASS AN ORDER OF ASSESSMENT AND DETERMINE T HE TAX PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT; (D) THE ASSETS SEIZED UNDER S. 132 OR REQUISITIONED UNDER S. 132A SHALL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF S. 132B.' THE SAID PROVISION MANDATES THE SERVICE OF NOTICE TO SUCH PERSON RE QUIRING HIM TO FURNISH WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS A RETURN IN THE PRESCRIBED FORM AND VERIFY IN THE SAME MANNER AS THE RETURN GIVEN UNDER SUB - CL. (I) OF SUB - S. (1) OF S. 142 SETTING OUT HIS TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME FO R THE BLOCK PERIOD. THEREFORE WHERE THE ASSESSMENT IS TO BE DONE UNDER S. 158BC OR S. 158BD ISSUE OF A NOTICE IS MANDATORY AND THE SAID NOTICE IS ALSO PRESCRIBED UNDER THE ACT. IN ORDER TO CLARIFY THE POSITION BY FINANCE ACT, 2002, THE WORDS 'UNDER S. 158B C' IS EXPRESSLY PROVIDED. THE SAID AMENDMENT IS CLARIFICATORY IN NATURE. EVEN THOUGH IT IS STATED THAT THE PROVISIONS OF THIS CHAPTER SHALL APPLY AND IN THAT CHAPTER, S. 158BC WHICH IS THE PROVISION WHICH PRESCRIBES THE PROCEDURE FOR BLOCK ASSESSMENT THE A SSESSMENT UNDER S. 158BD HAS TO BE IN TERMS OF S. 158BC. WHEN PROCEEDINGS ARE INITIATED IN TERMS OF S. 158BC AGAINST A PERSON WHO IS COVERED UNDER S. 158BD AND THE NOTICE TO BE ISSUED IS PRESCRIBED UNDER THE ACT AND IN THE ABSENCE OF ANY PRESCRIPTION OF A NOTICE IN A PRESCRIBED MANNER UNDER S. 158BD THE ONLY NOTICE THAT REQUIRES TO BE ISSUED BOTH UNDER S. 158B AND 158BD IS THE NOTICE WHICH IS PRESCRIBED. IT IS THE NOTICE PRESCRIBED UNDER S. 158BC. THEREFORE, THE CONTENTION THAT THE ASSESSMENT IS UNDER S. 15 8BD WHEREAS NOTICE ISSUED UNDER S. 158BC AND THEREFORE THE ENTIRE PROCEEDINGS IN PURSUANCE OF SUCH NOTICE IS VOID AND IS UNTENABLE. 12. THUS, IN VIEW OF THE FACTS OF THE CASE, PROVISIONS OF SECTION 158BD R.W.S. 158BC AND THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SMT. ANNAPOORNAMMA 11 ITA NO S. 886 & 937/PUN/2013 CHANDRASHEKAR (SUPRA) WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESSEE U/S. 158BD ARE INVALID AND ARE LIABLE TO BE QUASHED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF THE DEPARTMENT IS DISMISSED. 1 3 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 31 ST DAY OF MAY, 201 7 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 31 ST MAY, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CENTRAL, PUNE 4. / THE CIT , CENTRAL, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE