Late Indravadan R.Shah Thru Executor Jayesh I Shah, Mumbai V. The Dy.CIT., Cent.Circle-1, Baroda

ITSSA 121/AHD/2007

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8335 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-09-2012
• Assessment Year: misc
• Appeal Filed On: 16-07-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Search and seizure; Loose papers; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Procedural lapse; Competent authority; Assessment record; Block assessment
• Section: 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 LATE SHRI INDRAVADAN R. SHAH, THRU EXECUTOR JAYESH I SHAH, 22A, VIJAY CHAMBER, GROUND FLOOR, TRIBHUVAN ROAD, MUMBAI-04 V/S . DCIT, CEN. CIR.1, BARODA. PAN NO. AA FPS4308C (APPELLANT) .. (RESPONDENT) BY APPELLANT MS. URVASHI SHODHAN, A.R. /BY RESPONDENT SHRI T. SANKAR, SR..D.R. /DATE OF HEARING 13.09.2012 /DATE OF PRONOUNCEMENT 28.09.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WHI CH HAS EMANATED FROM THE ORDER OF CIT(A)-IV, AHMEDABAD, ORDER DATED 08.03.2007 FOR BLOCK PERIOD 01/04/1995 TO 11/02/2002. THE GROUNDS OF APPEAL ARE AS UNDER: 1. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS I N NOT ACCEPTING THE PLEA OF THE APPELLANT THAT THE BLOCK ASSESSMENT ORD ER PASSED BY AO BEING BARRED BY LIMITATION OF TIME AND HENCE UNSUST AINABLE IN LAW AND IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 2 VOID AB INITIO OUGHT TO HAVE BEEN QUASHED. LD. CIT (A) FAILED TO APPRECIATE THAT NOTICE U/S 158BC BEING ISSUED ON 10 /12/2003 TIME LIMIT FOR COMPLETION OF BLOCK ASSESSMENT PROCEEDINGS EXPI RED ON 27/02/2004 WHEREAS AO PASSED THE ORDER U/S 158BD R.W.S. 158BC ON 30/03/2006. THE ORDER OF CIT (A) BEING BAD, PERVERSE IN LAW AND AGAINST PRINCIPLES OF NATURAL JUSTICE OUGHT TO BE QUASHED. 2. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE BLOCK ASSESSMENT FRAMED UNDER THE PROVISIONS OF CHA PTER XIV - B OF THE ACT WITHOUT APPRECIATING THAT WHEN THE VERY NOTICE U/S 158BD OF THE ACT WAS DEFECTIVE IN ITS FORM, CONTENTS AND ON THE GROU ND OF LIMITATION, ANY ASSESSMENT FRAMED BASED ON SUCH DEFECTIVE NOTICE IS BAD, ILLEGAL, WITHOUT JURISDICTION AND VOID AB INITIO. 3. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT FOLLOWING AND DEFYING THE ORDER OF HON'BLE ITAT DIRECTLY ON THE I SSUE. THIS ACTION OF LD. CIT (A) CANNOT BE TOLERATED IN THE HIERARCHICAL SYS TEM OF JUDICIARY AND THEREFORE EXEMPLARITY COST MAY KINDLY BE AWARDED TO AVOID ANY SUCH REPETITION IN FUTURE. 4. LEARNED CIT (A) HAS ERRED IN LAW AND ON F ACTS IN NOT CONSIDERING AS WELL DISCUSSING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (289 ITR 341) THOUGH THE SAME WAS SPECIFICALLY CITED AND SUBMISSIONS WERE MADE BASED ON THE SAME. 5. LEARNED CIT (A) HAS ERRED IN LAW AND ON FA CTS IN NOT ADJUDICATING UPON THE GROUND CHALLENGING THE MERITS OF ADDITION. THE SAID GROUND WAS RAISED AT SR. NO. 3 IN MEMO OF GROUND OF APPEAL BEFORE HIM. 6. LEARNED CIT (A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING THE ADDITIONS ON THE BASIS OF PEAK CASH BALANCE. LD. C IT (A) FURTHER ERRED IN LAW AND ON FACTS IN NOT ACCEPTING THE SUBMISSION S OF THE APPELLANT THAT NO SEPARATE ADDITION IN RESPECT OF NEGATIVE CA SH BALANCE CAN BE MADE. 7. LEARNED CIT (A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THAT IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 3 ACTION OF AO IN FRAMING THE IMPUGNED ASSESSMENT AND MAKING ADDITIONS WITHOUT ANY MATERIAL / CORROBORATIVE EVIDENCE FOUND AND SEIZED DURING THE COURSE AND THUS CIT (A) ERRED IN LAW IN CONFIRM ING THE ADDITIONS WHICH ARE AGAINST THE SCHEME OF BLOCK ASSESSMENT PR ESCRIBED UNDER CHAPTER XIV -B OF THE ACT. 8. BOTH THE LOWER AUTHORITIES HAVE ERRED IN LA W AND ON FACTS IN NOT GIVING PROPER OPPORTUNITY TO THE APPELLANT TO PLACE ON RECORD VARIOUS EXPLANATIONS, SUBMISSIONS AND EVIDENCES AND FURTHER ERRED IN LAW AND IN NOT CONSIDERING EXPLANATION PLACED ON RECORD. B OTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND IN NOT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 9. THE ASSESSMENT ORDER IS BAD AND ILLEGAL BECAUSE THE ALLEGED APPROVAL GRANTED BY ADDL. CIT, CR, BARODA IS VITIAT ED IN LAW FIRSTLY BECAUSE THE APPELLANT WAS NOT HEARD BEFORE ANY SUCH APPROVAL AND SECONDLY BECAUSE THE SAME HAS BEEN GRANTED MECHANIC ALLY. 10. INITIATION OF PENALTY PROCEEDINGS U/S 158BF A (2) ARE UNJUSTIFIED. 2. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT ON 11.02.2002 IN THE CASE OF G.N. FILMS GROUP. DURING THE COURSE OF SEARCH PROCEEDINGS, THE OFFICE OF SHR I INDRAVADAN R. SHAH (M/S. ARADHANA ENTERPRISE) SITUATED AT 7/C, SECOND FLOOR, 2B, RAWALPINDI BUILDING, TRIBHUVAN MARG, MUMBAI WAS ALSO COVERED. VARIOUS D OCUMENTS AND LOOSE PAPERS VIDE ANNEXURES A/1 TO A/9 WERE SEIZED. THE LD. A.O. ISSUED NOTICE U/S.158BD IN CASE OF ASSESSEE BEING OTHER PERSON ON 27.02.2004 WHICH WAS DULY SERVED UPON THE ASSESSEE THROUGH SPEED POST ON 10.03.2004. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE BLOCK P ERIOD ON 22.04.2004 SHOWING UNDISCLOSED INCOME AT RS.10,00,000/-. NOTI CE U/S. 143(2) WAS ISSUED ON 28.04.2004 WHICH WAS ALSO DULY SERVED UPON THE A SSESSEE THROUGH SPEED IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 4 POST. IN RESPONSE TO THIS NOTICE, THE AUTHORISED R EPRESENTATIVE ATTENDED THE BLOCK ASSESSMENT BEFORE THE A.O. THE LD. A.O. COMP LETED THE BLOCK ASSESSMENT PROCEEDING U/S.158BD R.W.S. 158BC(C) ON 30.03.2006 AT TOTAL UNDISCLOSED INCOME OF RS. 1,02,83,333/- AFTER OBTAI NING THE PRIOR APPROVAL OF THE ADDL. CIT, CENTRAL RANGE- BARODA. 3. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF ORDE R PASSED BY THE LD. A.O. U/S.158 (BD) R.W.S. 158 BC (C) OF THE IT ACT B EFORE THE CIT(A)-IV, AHMADABAD, WHO HAS HELD PROCEEDING VALID. THE OPE RATIVE PART OF THE CIT(A) ORDER IS REPRODUCED AS UNDER: 2.2 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. ON PERUSAL OF PROVISI ONS CONTAINED U/S. 158BC, IT HAS BEEN CLEARLY MENTIONED THAT NOTICE CA N BE ISSUED ONLY IN CASE OF THOSE PERSONS WHO WERE SEARCHED U/S. 132. BUT FOR THE PURPOSE OF MAKING ASSESSMENT IN CASE OF OTHER PERSONS WHO WERE NOT SEARCHED U/S. 132 REQUIRED TO BE ASSESSED U/S. 158B D IF THE AO IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO S UCH OTHER PERSON. HENCE IT IS EVIDENT THAT NO SEARCH WARRANT U/S.132 IS REQUIRED TO BE EXECUTED FOR MAKING ASSESSMENT U/S. 158BD AND IT IS ONLY THE SATISFACTION OF THE AO WHICH IS SUFFICIENT FOR MAKI NG ASSESSMENT U/S. 158BD. ON CAREFUL CONSIDERATION OF THE JUDGMENT (S UPRA) RELIED UPON BY LD. COUNSEL OF HONBLE ITAT AHMADABAD BENCH, IT HAS BEEN NOTICED THAT FULL FACTS AS WELL AS PROVISIONS WERE NOT BROU GHT TO THE NOTICE OF THE HONBLE ITAT. CONSEQUENTLY, FOLLOWING ASPECTS WERE NOT CONSIDERED BY THEIR LORDSHIP IN THE JUDGMENT:- 1. THAT INSERTING THE WORDS UNDER SECTION 158BC W. E.F. 1/6/02 UNDER SECTION 158 BD MEANS THAT THE ASSESSMENT U/S. 158BD SHALL BE COMPLETED BY AO IN ACCORDANCE WITH THE PROVISIONS CONTAINED U/S.158BC OR IN THE MANNER PRESCRIBED U/S. 15B BC. IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 5 2. THAT NO CORRESPONDING AMENDMENT WAS MADE U/S.15 8BC PRESCRIBING ISSUE OF NOTICE BEFORE MAKING ASSESSMEN T U/S.158BD. THAT NOTICE U/S. 158BC CAN ONLY ISSUED ONLY IN THOS E CASES WHERE WARRANT OF AUTHORIZATION WAS EXECUTED U/S.132 OR BO OKS WERE REQUISITIONED U/S.132AETC. 3. SECTION 158 BC IS A PROCEDURAL SECTION WHICH P RESCRIBES THE PROCEDURE FOR MAKING ASSESSMENT OF UNDISCLOSED INCO ME. IT HAS BEEN HELD IN NUMBER OF CASES THAT PROCEDURAL DEFECT IS A CURABLE DEFECT AND ASSESSMENT CANNOT BE MADE INVALID ONLY O N THIS GROUND OF PROCEDURAL LAPSE. 4. FURTHER IT WAS HELD BY HON'BLE BOMBAY HIGH COU RT IN CASE OF SHIRISH MADHUKAR DALVI VS. ACIT (156-TAXMAN-79) NOT ICE U/S. 158 BC ONLY PROVIDES FOR PROCEDURE TO BE ADOPTED FO R BLOCK ASSESSMENT AND IT CANNOT BE EQUATED WITH NOTICE U/S . 148. HENCE, ANY DEFECT U/S. 158 BC IS CURABLE AS PROCEDURAL LAP SE ONLY. 5. THE ASSESSING OFFICER ASSUMES JURISDICTION FOR MAKING ASSESSMENT OF UNDISCLOSED INCOME U/S. 158BA WHICH I S A CHARGING SECTION AND MANNER OF ASSESSMENT IS PRESCR IBED U/S. 158 BD FOR THOSE PERSONS WHO WERE NOT SEARCHED AND U/S.158BC FOR THOSE WHO WERE SEARCHED. 6. AS PER THE PROVISIONS CONTAINED U/S. 292B, .... .. NO ASSESSMENT, NOTICE ......... SHALL BE INVALID OR SH ALL DEEMED TO BE INVALID MERELY BY REASON OF ANY DEFECT OR OMISSION IN SUCH ASSESSMENT, NOTICE ..... IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF INCO ME TAX ACT, 1961. 7. IT IS INFERRED THAT ASSESSING OFFICER HAD ISSU ED NOTICE U/S. 158BD BEFORE MAKING ASSESSMENT OF UNDISCLOSED INCOM E CANNOT BE INVALIDATED U/S. 292 B OF L.T.ACT, 1961. IN VIEW OF ABOVE, NOTICE ISSUED U/S. 158 BD IS PROTECTED BY THIS SECTION AS WAS HELD BY IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 6 HON'BLE BOMBAY HIGH COURT IN CASE OF SHIRISH MADHUK AR DALVI (156- TAXMAN 79). 8. THAT THE PROVISIONS CONTAINED U/S.158BD MAY BEC OME REDUNDANT IN THE ABSENCE OF ANY AMENDMENT U/S.158BC FOR ISSUE OF NOTICE IN CASE OF 'OTHER PERSONS. 9. THAT IT WAS HELD BY HON'BLE SUPREME COURT IN CA SE OF SULTANA BEGUM V/S. PREMCHAND JAIN (1997) (1 SCC 373) THAT T HE RULE OF INTERPRETATION OF STATUTES IS THAT EVERY PROVISION IN THE ACT NEEDS TO BE CONSTRUED HARMONIOUSLY WITH A VIEW TO PROMOTE THE OBJECT AND SPIRIT OF THE ACT BASED ON FOLLOWING PRINCIPLES :- (A) IT IS THE DUTY OF THE COURTS TO AVOID A HEAD-ON CLASH BETWEEN TWO SECTIONS OF THE AD AND TO CONSTRUE THE PROVISIONS WHICH APPEAR TO BE IN CONFLICT WITH EACH OTHER IN SUCH A MARINER AS TO HARMONIZE THEM. (B) THE PROVISIONS OF ONE SECTION OF A STATUTE CANN OT BE USED TO DEFECT THE OTHER PROVISIONS UNLESS THE COUR T, IN SPITE OF ITS EFFORTS, FINDS IT IMPOSSIBLE TO EFFECT RECON CILIATION BETWEEN THEM. (C) IT HAS TO BE BORNE IN MIND BY ALL THE COURTS AL L THE TIME THAT WHEN THERE ARE TWO CONFLICTING PROVISIONS IN AN ACT, WHICH CANNOT BE RECONCILED WITH EACH OTHER, TH EY SHOULD BE SO INTERPRETED THAT, IF POSSIBLE, EFFECT SHOULD BE GIVEN TO BOTH. THIS IS THE ESSENCE OF THE RULE OF 'HARMONIOUS CONSTRUCTION' (D)THE COURTS HAVE ALSO TO KEEP IN MIND THAT AN INTERPRETATION WHICH REDUCES ONE OF THE PROVISIONS AS A 'DEAD LETTER' OR 'USELESS LUMBER' IS NOT HARMONIOUS CONSTRUCTION. (E) TO HARMONIZE IS NOT TO DESTROY ANY STATUTORY PR OVISION OR TO RENDER IT OTIOSE. IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 7 2.3 KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANC ES OF THE CASE IT IS MOST RESPECTFULLY SUBMITTED THAT FACTS O F THE PRESENT CASE ARE DISTINGUISHABLE TO THE EXTENT INDICATED AB OVE AS THESE ASPECTS WERE NOT BROUGHT TO THE NOTICE OF HON'BLE I T AT IN CASE OF M/S. SUPER CONSTRUCTION CO. VS DCIT (SUPRA). HENCE THE JUDGMENT IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT CASE. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE CONTENTIONS OF LD. COUNSEL ARE HEREBY REJECTED AND HENCE FIRST GROUND OF IS HEREBY DISMISSED. 4. NOW THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE APPELLANT, MS. URVASHI SHODHAN CONTENDED THAT LD. A.O. ISSUED NOTI CE U/S. 158BC ON 10.12.2003 WHICH WAS DROPPED AFTER THE APPELLANT RA ISED OBJECTION ON THE GROUND THAT HIS NAME WAS NOT MENTIONED IN THE WARRA NT OF AUTHORIZATION FOR CONDUCTING SEARCH. THE A.O. SUBSEQUENTLY ISSUED NO TICE U/S.158BD R.W.S. 158BC(C) ON 27.02.2004 WHICH WAS SERVED UPON THE AS SESSEE ON 10.03.2004. AS PER SECTION 158 BE OF THE ACT, THE BLOCK ASSESSM ENT PROCEEDING IS TO BE COMPETED IN TWO YEARS FROM THE END OF THE MONTH IN WHICH THE NOTICE UNDER THIS CHAPTER WAS SERVED ON. THEREFORE, THE LD. A.O . HAD PASSED THE ORDER WITHOUT JURISDICTION AND VOID AB INITIO. SHE ALSO RELIED UPON IN CASE OF CIT VS. K.M. GANESAN, PC APPEAL NO. 1215 OF 2009 (2011) 16 TAXMANN.COM 134 (MAD.), CIT, CENTRAL CIRCLE VS. SMT. ANNAPPORNAMMA CHAANDRASEKHAR [2011] 16 TAXMANN.COM 391 (KAR.) & M/S SUPER CONSTRUCTION CO. VS. DCIT (SP.RANGE-5) , AHMADABAD A BENCH IN IT(SS)A NO. 3/AHD/1998 FOR BLOCK PERIOD 01/04/1985 TO 21/09/1995. SHE VEHEMENTLY ARGUED THAT THE WARRANT WAS NOT ISSUED IN THE NAME OF APPELLANT. THE NOTIC E FOR BLOCK ASSESSMENT COULD BE ISSUED U/S. 158BD ONLY NOT U/S.158BC. THE ISSUANCE OF NOTICE BY IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 8 MERE QUOTING OF WRONG PROVISION WOULD NOT VITIATE T HE PROCEEDING OR EFFECT OF THE NOTICE IS TRITE AND WELL SETTLED PRINCIPLE OF L AW WHICH REQUIRED NO APPEAL TO BE CITED. SHE ALSO REFERRED THE CIT, CENTRAL CIRCLE VS. SMT. ANNAPPORNAMMA CHAANDRASEKHAR (SUPRA) AND ARGUED THAT THE ASSESSMENT FRAMED U/S.158BD R.W.S. 158 BC(C) OF THE ACT WHICH BARRED BY THE LIM ITATION THAT OUGHT TO HAVE BEEN FRAMED WITHIN TWO YEARS OF ISSUANCE OF THE NOT ICE NU/S.158BC. AT THE OUTSET, THE LD. SR.D.R. VEHEMENTLY ARGUED AS UNDER : 1(A).THE A.O. HAD INDEED RECORDED REASONS FOR ISSU E OF NOTICE U/S. 158BD OF THE ACT ON 10.12.2003 (COPY ENCLOSED AS ANNEXURE 1 ) 1 (B). WHEN THE ASSESSEE WAS ASKED TO FILE RETURN O F INCOME AND A NOTICE WAS ISSUED U/S.158BC OF THE ACT (COPY OF T HE SAID NOTICE IS PLACED AS ANNEXURE 2 ), IT IS AN ADMITTED FACT BY THE ASSESSEE BEFORE HONBLE TRIBUNAL THAT IT HAD RA ISED OBJECTION THAT THE NAME SHRI INDRAVADAN SHAH WAS NO T MENTIONED IN THE WARRANT OF AUTHORISATION OF CONDUC TING SEARCH, AND THAT THE NOTICE WAS NOT VALID. 1 (C). THE CIT-XVI, MUMBAI, HAD PASSED ORDER U/S. 1 27(2) OF THE IT ACT ON 19.11.2003 TRANSFERRING THE JURISDICTION OF THE ASSESSEE'S CASE FROM ITO, WARD-16(1), MUMBAI TO DCI T, CENTRAL CIRCLE-1, BARODA (COPY OF THE SAME ALTHOUGH NOT AVAILABLE WITH THE DEPARTMENTAL RECORDS IMMEDIATELY HAD ALREADY BEEN FURNISHED BY THE ASSESSEE IN ITS PAPER BOOK, AND THE SAME IS ENCLOSED AS ANNEXURE-3) . 1 (D) AS THE ASSESSEE OBJECTED TO THE TRANSFER ORDER U/S. 12 7(2) ON THE GROUND THAT OPPORTUNITY OF BEING HEARD WAS N OT GRANTED, THE CIT - XVI , MUMBAI GAVE A FRESH OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THEREAFTER PASSED R EVISED IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 9 ORDER U/S. 127(2) OF THE IT ACT ON 19.02.2004 (COPY OF THE ORDER IS ENCLOSED AS ANNEXURE-4 ). 1 (E). IN VIEW OF THE OBJECTIONS RAISED BY THE ASS ESSEE, THE DCIT, CENTRAL CIRCLE-1, BARODA WROTE A LETTER DATED 26.02 .2004 TO ADDL. CIT, CENTRAL RANGE, BARODA STATING THAT NOTIC E U/S.158BC WAS WRONGLY ISSUED, THE EXISTING PROCEEDI NGS WOULD BE DROPPED AND THAT FRESH NOTICE U/S. 158BD W ILL BE ISSUED. HE HAS ALSO RECORDED IN PARA 2 OF THE SAID LETTER, THE REASONS FOR ISSUANCE OF S.158BD NOTICE TO THE ASSESSEE. (COPY OF THE SAME IS ENCLOSED AS ANNEXURE-5 ) 1 (F). THE DCIT, CENTRAL CIRCLE-1, BARODA ISSUED F RESH NOTICE U/S. 158BD OF THE ACT DATED 27.02.2004 (COPY OF THE SAME IS ENCLOSED AS ANNEXURE-6 ) 1.1. FROM THE ABOVE SEQUENCE OF FACTS, IT CAN BE S EEN THAT THE ASSESSEE HAD RAISED OBJECTIONS REGARDING (I) VALIDI TY OF ORIGINAL NOTICE U/S. 158BC, AS WELL AS (II) S.127(2) ORDER P ASSED BY THE CIT-XVI, MUMBAI ON 19.11.2003. THUS A FRESH S.127(2 ) ORDER WAS PASSED BY THE CIT(A) VIDE ORDER DATED 19.02.200 4 AND FRESH NOTICE 158BD OF THE ACT WAS ISSUED BY THE AO ON 27. 02.2004. HENCE AS SUCH THE FACTS AND CIRCUMSTANCES IN THIS C ASE ARE DISTINCT FROM ALL THE CASE LAWS CITED BY THE ASSESS EE IN AS MUCH AS THE ASSESSEE HAD RAISED OBJECTIONS FOR ISSUANCE OF THE NOTICE U/S. 158BC AS WELL AS VESTING OF JURISDICTION U/S. 127(2) OF T HE ACT WITH DCIT , CENTRAL CIRCLE-1, BARODA. 1.2. IN VIEW OF THESE PECULIAR FACTS THE NOTICE U/S . 158BD DATED 27.02.2004 IS TO BE TREATED AS VALID NOTICE AS THE SAME HAS BEEN ISSUED AFTER ADDRESSING THE ASSESSEE'S TWIN OBJECTI ONS REGARDING (A) NAME NOT APPEARING IN THE WARRANT OF AUTHORIZAT ION AND (B) NON-GRANTING OF OPPORTUNITY PRIOR TO PASSING ORDER U/S.127(2), AND IS ALSO BASED ON VALID SATISFACTION NOTE RECORDED B Y THE-ASSESSING OFFICER. IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 10 2. AS ALREADY STATED, THE EXISTING PROCEEDINGS WERE DROPP ED IN VIEW OF THE ASSESSEE'S OBJECTIONS TO (I) ISSUANCE OF NOT ICE U/S.L58BC AND (II) PASSING OF ORDER U/S.127(2) WITHOUT BEING HEARD. IN RESPECT OF BOTH THE OBJECTIONS, NECESSARY REMEDIAL ACTIONS WERE TAKEN BY THE AO AND CIT CONCERNED. THEREAFTER, FRESH NOTICE U/S. 158BD FOR THE BLOCK PERIOD WAS SERVED ON THE ASSESS EE ON 10.03.2004 (RELEVANT COPY OF SPEED POST SERVICE I S ENCLOSED AS ANNEXURE-7 ) . AS PER THE PROVISIONS OF SEC.158BE, THE COMPLETIO N OF BLOCK ASSESSMENT IN THE CASE OF ANY OTHER PERSON REFERRED TO IT IN SEC. 158BD SHALL BE TWO YEARS FROM THE END OF TH E MONTH IN WHICH THE NOTICE WAS SERVED. HENCE THE TIME BARRING DATE FOR PASSING THE ORDER IS 31.03.2006 AND THE ORDER WAS V ALIDLY PASSED ON 30.03.2006. 3. APART FROM THE ABOVE SUBMISSIONS, STRONG RELIAN CE IS AL SO PLACED ON THE FINDINGS OF THE A.O. AS WELL AS THE DECISION OF THE LD. CIT (A) ON THE VALIDITY OF NOTICES RECORDED IN PARA 2.2 AND 2.3 OF THE APPELLATE ORDER. 4. IT IS HUMBLY PRAYED THAT THE APPEALS / OBJECTION S OF THE ASSESSEE BE DISMISSED, AND THAT THE ORDER OF THE A .O. BE RESTORED. THE CASE RECORDS IN ORIGINAL ARE ALSO ENCLOSED HEREWITH. 5. WE HAVE GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW AND ASSESSMENT RECORD AND HEARD THE ARGUMENTS AND CONSI DERED THE CASE LAWS CITED BY THE APPELLANT. IT IS UNDISPUTED THAT THE A.O. ISSUED NOTICE U/S.158BC TO THE APPELLANT. HOWEVER, HE CHALLENGED THE VALID ITY OF NOTICE U/S.158BC, THERE WAS NO WARRANT IN CASE OF THE APPELLANT. ACC ORDINGLY, THE LD. A.O. DROPPED THE PROCEEDING U/S.158BC AND AFTER TAKING A PPROVAL FROM THE COMPETENT AUTHORITY, HE ISSUED NOTICE U/S. 158BD ON 27.02.2006 WHICH WAS SERVED ON THE ASSESSEE ON 10.03.2004. BEFORE THIS, THE APPELLANT HAD IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 11 CHALLENGED THE PROCEEDING U/S.127(2) OF THE IT ACT BEFORE THE CIT-XVI, MUMBAI, AS TO NO REASONABLE OPPORTUNITY OF BEING HE ARD GIVEN TO THE APPELLANT. THEREFORE, HE HAD WITHDRAWN 127(2) ORDE R, DATED 19.11.2003 AND GAVE FRESH OPPORTUNITY OF BEING HEARD TO THE APPELL ANT AND FINALLY 127(2) ORDER WAS PASSED ON 19.02.2004. THE LD. A.O. DID NOT HAV E JURISDICTION TILL 19.02.2004 ON THE ASSESSEE. WHEN ORDER U/S.127(2) OF IT ACT WAS PASSED BY THE LD. CIT-XI, MUMBAI, THEN THE A.O. HAD JURISDICT ION ON THE APPELLANT. THEREFORE, HE ISSUED 158BD NOTICE ON 27.02.2004 WHI CH WAS VALID NOTICE AS ASSESSEE COVERED IN OTHER PERSONS. THE ASSESSMENT WAS COMPLETED ON 30.03.2006 WITHIN TWO YEARS FROM THE END OF THE MON TH IN WHICH THE NOTICE WAS SERVED ON THE ASSESSEE. THUS, THIS GROUND OF APPEA L IS DISMISSED. 6. OTHER GROUNDS I.E. GROUND NO.2 TO 10 HAVE NOT BE EN PRESSED BY THE LD. COUNSEL FOR THE APPELLANT. THE SAME ARE DISMISSED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 28.09.2012 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , IT(SS)A NO. 121/AHD/2007 BLOCK PERIOD :01/04/1995 TO 11/02/2002 PAGE 12 8/ 1 ': ) , 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 26.09.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 27.09.2012 4) DATE OF CORRECTION ,, ,, 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 28.09.2012 7) ORDER UPLOADED ON ,, ,, 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 28.09.2012