Smt. Mamta Shivhare, Bhopal V. The ITO 3(2), Bhopal

ITSSA 155/IND/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7642 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2000-2001
• Appeal Filed On: 24-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN; SSH KESHAVE SAXENA
• Assessee Lawyers: SSH H P VERMA; GIRISH AGRAWAL
• Keywords: Search and seizure; Validity of assessment; Procedural lapse; Block assessment
• Section: 143(3); 153A; 145; 132; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NO.179/IND/2011 A.Y. 1999-00 SMT. SUDHA KESHARWANI, BHOPAL PAN AGCPK 2772 M ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT IT(SS)A NO.180/IND/2011 A.Y. 2004-05 SUKHDEEN RAIKWAR, BHOPAL PAN AMGPR 7352 E ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT 2 IT(SS)A NO.175 TO 178/IND/2011 A.YS. 2000-01, 2002-03, 2003-04 & 2003-04 RAJESH SHRIVASTAVA, BHOPAL PAN APOPS 7071 L ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT IT(SS)A NO.163 TO 169/IND/2011 A.YS. 1998-99 TO 2004-05 KESHAV PRASAD SHRIVASTAVA, BHOPAL PAN BSMPS 9064 B ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT IT(SS)A NO.156 TO 162/IND/2011 A.YS. 1998-99 TO 2004-05 SMT. MEENA SHRIVASTAVA, BHOPAL PAN AYXPS 4087 L ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT 3 IT(SS)A NO.170 TO 174/IND/2011 A.YS. 2000-01 TO 2004-05 SMT. ASHA DEVI SHRIVASTAVA, BHOPAL PAN AYXPS 4088 F ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT IT(SS)A NO.155/IND/2011 A.Y. 2000-01 SMT. MAMTA SHIVHARE, BHOPAL PAN AZQPS 3156 F ... APPELLANT VS ITO-3(2), BHOPAL ... RESPONDENT APPELLANTS BY : S/SH.H.P. VERMA & GIRISH AGRAWAL RESPONDENT BY : S/SH. KESHAVE SAXENA & ARUN DEWAN DATE OF HEARING : 20.3.2012 DATE OF PRONOUNCEMENT : 26.3.2012 O R D E R PER BENCH THIS BUNCH OF 26 APPEALS IS BY DIFFERENT ASSESSEES CHALLENGING THE ORDERS OF THE LEARNED FIRST APPELLA TE 4 AUTHORITY, BHOPAL, DATED 13.9.20011, 9.9.2011, 7.9.2011, 12.9.2011 AND 8.9.2011 ON DIFFERENT GROUN DS. 2. DURING HEARING OF THESE APPEALS, THE LEARNED COU NSEL FOR THE ASSESSEE, SHRI H.P. VERMA, ALONG WITH SHRI GIRISH AGRAWAL, REPRESENTED THESE ASSESSES WHEREAS SHRI KESHAV SAXENA, LEARNED CIT DR AND SHRI ARUN DEWAN, LEARNED SENIOR DR, REPRESENTED THE DEPARTMENT. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDERS ON TWO COUNTS I.E. SINCE NO NOTICE U/S 143(2) OF THE ACT W AS ISSUED AND SERVED TO THE ASSESSEE BY THE LEARNED ASSESSING OFFICER, THEREFORE, THE ASSESSMENT COMPLE TED UNDER SECTION 153C/143(3) OF THE ACT, IS CONTRARY T O THE PROVISIONS OF THE ACT AND SECONDLY, SINCE THE ASSES SMENT OF THE SEARCHED PERSON (AS PER THE DEPARTMENT) SHRI PRADEEP KESHARWANI WAS COMPLETED U/S 153A ON 29.3.2006, NOTICE U/S 153C IS ILLEGAL, INVALID AND UNTENABLE IN LAW AS THE ORDER U/S 153C WAS PASSED WITHOUT SERVICE OF NOTICE UNDER SECTION 143(2) OF T HE ACT 5 FOR WHICH THE LEARNED COUNSEL CONTENDED THAT SINCE THERE WAS NO WARRANT OF AUTHORISATION WHICH HAS BEEN ISSU ED AND EXECUTED IN THE NAME OF SHRI PRADEEP KESHARWANI , ASSUMPTION OF JURISDICTION BY THE LEARNED ASSESSING OFFICER TO FRAME ASSESSMENT U/S 153A/143(3) OF THE ACT WAS AB INITIO VOID AND UNLAWFUL. IT WAS FURTHER SUBMITTED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE JABALPUR BENCH OF THE TRIBUNAL (ITA NO. 91-93 AND 96/JAB/2007 DATED 26.4.2007 AND THE DECISION OF THE INDORE BENCH OF THE TRIBUNAL (ITA N O.90, 94 AND 95/JAB/2007) IN THE CASE OF DCIT VS. SHRI PRADEEP KESARWANI. A PLEA WAS ALSO RAISED THAT IN VIEW OF THE DECISION FROM HONBLE APEX COURT IN THE CASE OF HOTEL BLUE MOON (2010) 188 TAXMAN 113 (SC), ASHOK ANAND (2011) 17 ITJ 112 (MP), RAJAT JEWELLERS PRIVA TE LIMITED (2009) 12 ITJ 80 (INDORE), G.M. INFRASTRUCT URE (2010) 14 ITJ 623 (INDORE), SHRIKANT RATHI (2012) 1 9 ITJ 307 (INDORE) AND THE RATIO LAID DOWN IN KHANDOOBHAI VASANTJI DESAI; 236 ITR 73 (GUJ) AND IN THE ABSENCE OF 6 SERVICE OF SUCH NOTICE, NO ADDITION CAN BE MADE. TH E LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION FROM HONBLE APEX COURT IN HOTEL BLUE MOON S PRIVATE LIMITED. 2.1 ON THE OTHER HAND, THE LEARNED CIT DR FAIRLY ADMITTED THAT NO WARRANT OF AUTHORISATION WAS ISSUE D IN THE NAME OF SHRI PRADEEP KESHARWANI BUT STILL THERE IS NO RESTRICTION TO COVER THE IMPUGNED PERSONS AND THE S EARCH WAS ARGUED TO BE VALID. RELIANCE WAS PLACED UPON T HE DECISION IN PURANMAL VS. DIT (93 ITR 505) (SC). A PLEA WAS ALSO RAISED THAT EVEN IF INVOCATION OF SECTION 153A IS INVALID, STILL THE MATERIAL CAN BE USED AGAINST THE PRESENT ASSESSES. THE LEARNED CIT DR ALSO TOOK THE PLEA TH AT THE DECISION IN THE CASE OF HOTEL BLUE MOON WAS RENDERE D IN THE CONTEXT OF ASSESSMENT U/S 158BC AND NOT IN THE CONTEXT OF ASSESSMENT FRAMED U/S 153C OF THE ACT, AS SECTION 153BC FALLS WITHIN DIFFERENT CHAPTER OF THE ACT WHICH CHAPTER XIVB. IT WAS FURTHER PLEADED THAT IN THE 7 LANGUAGE OF SECTION 153A/153C OF THE ACT, NO NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE ISSUED PRIOR TO FRAMING THE ASSESSMENT. 2.3 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT A SEARCH AND SEIZURE ACTION U/S 132 (1) OF THE INCOME TAX ACT, 1961 WAS CONDUCTED IN SAHU GROU P OF CASES ON 10.12.2003. THE STAND OF THE REVENUE I S THAT SOME INCRIMINATING DOCUMENTS WERE FOUND INDICATING INVOLVEMENT OF THE PRESENT ASSESSES. THE LEARNED ASSESSING OFFICER OF THE PRESENT ASSESSEES CLAIMED TO HAVE RECEIVED INFORMATION THAT THERE WAS SOME MATER IAL, PRIMA FACIE EVIDENCING EVASION OF TAXES, WAS FOUND DURING THE COURSE OF SEARCH OF SAHU GROUP, RELATING TO PRESENT ASSESSEES. ON THE BASIS OF THIS INFORMATION , THE ASSESSING OFFICER ISSUED NOTICE U/S 153A READ WITH SECTION 153C OF THE ACT. IN RESPONSE TO THIS NOTIC E, THE ASSESSEE (MRS. SUDHA KESARWANI) FURNISHED THE RETUR N OF 8 INCOME FOR THE ASSESSMENT YEAR 1999-00 VERIFYING T OTAL INCOME AT RS.55,200/-. HOWEVER, THE LEARNED ASSESS ING OFFICER FRAMED THE ASSESSMENT UNDER SECTION 153A RE AD WITH 153C/143(3) OF THE ACT ASSESSING THE TOTAL INC OME AT RS.6,43,234/- ON 31.3.2008. THE OTHER CASES WERE A LSO ARGUED TO BE IDENTICAL. ON APPEAL, THE LEARNED CIT (A) AFFIRMED THE STAND OF THE LEARNED ASSESSING OFFICER . THE AGGRIEVED ASSESSEE ARE IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL SUBMISSIONS, WE FIND THAT EVEN THE LEARNED CIT(A) V IDE LETTER DATED 25.8.2010 RAISED A SPECIFIC QUERY TO T HE LEARNED ASSESSING OFFICER ON THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT AND IN TURN THE ASSESSING OFFICER IN THE REMAND REPORT DATED 23.11.2010 CONFIRMED THAT NO SU CH NOTICES U/S 143(2) OF THE ACT WERE ISSUED TO THE ASSESSEES. HOWEVER, THE LEARNED ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 153C/143(3) 9 WITHOUT ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT FOR ALL THE ASSESSMENT YEARS. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF ASSESSMENT ON THE GROUND OF NON-ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 3.1 IN VIEW OF THE ABOVE FACTS, IF THE LANGUAGE USE D IN EXPLANATION (I) TO SECTION 153A OF THE ACT IS ANALY SED, IT SPECIFICALLY STATES THAT EXPLANATION FOR REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT (I) SAVE AS OTHERWISE, PROVIDED IN THIS SECTION, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) SECTION 153A(1) STIPULATES INTER ALIA THAT THE ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A MEANING THEREBY THAT THE LEGISLATURE IN ITS WISDOM HAS USED THE WORD SHALL MAKING IT MANDATORY REQUIREME NT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT, SO AS TO COMPLETE THE ASSESSMENT. 10 DURING HEARING, THE LEARNED COUNSEL FOR THE ASSESSE E CLAIMED THAT THE IMPUGNED ISSUE IS COVERED BY THE O RDER OF THE TRIBUNAL IN DCIT VS. SHRI PRADEEP KESHARWANI (ITA NO.90, 94 AND 95/JAB/2007) DATED 15 TH MARCH, 2011, THEREFORE, WE ARE REPRODUCING HEREUNDER THE RELEVAN T PORTION OF THE SAID ORDER :- THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE CONSOLIDATED ORDER OF CIT(A) DATED 18.01.2007 FOR THE ASSESSMENT YEARS 1998-99 TO 2004-05 IN THE MATTER OF ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 1961. 2. COMMON GROUNDS HAVE BEEN TAKEN IN ALL THE THREE YEARS UNDER CONSIDERATION, WHICH READ AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE ME RITS OF THE CASE AND TREATING THE ORDER OF THE AO TO BE AB INITIO NULL AND VOID. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE PROVISIONS OF SECTION 292B OF THE INCOME-TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE SEC TION OF HON'BLE HIGH COURT OF MADRAS IN THE CASE OF AREV A T & D INDIA LIMITED VS. ACIT CASE NO.2278 OF 2006 (2007) CTR (MAD) 497 WHEREIN IT IS HELD THAT MERE PROCEDURAL IRREGULARITIES WILL NOT MAKE THE ASSESSMENT NULLITY IN LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ORDER OF THE LD. CIT(A) ON THE ABOVE ISSUES MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 11 4. FACTS IN BRIEF ARE THAT SEARCH ACTION U/S 132 WAS INITIATED AGAINST MR.SANTOSH KUMAR SAHU AND M/S. ASHOK TRADERS. HOWEVER, NOTICE U/S 153A WAS ISSUED IN THE NAME OF ASSESSEE AGAINST WHOM NO SEARCH ACTION WAS CARRIED OUT IN PURSUANCE TO WARRANT OF AUTHORIZATION ISSUED IN HIS NAME. MAIN PLEA OF THE ASSESSEE WAS THAT THERE WAS NO WARRANT OF AUTHORIZATION, WHICH HAD BEEN ISSUED AND EXECUTED IN ASSESSEES OWN CASE. ACCORDINGLY, IT WA S PLEADED THAT ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER TO FRAME ASSESSMENT U/S 153A WAS AB INITIO VOID AND UNLAWFUL. 5. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE THAT IN CASE OF ASSESSEE SHRI PRADEEP KESHARWANI, AGAINST THE VERY SAME ORDER OF CIT(A) DATED 18 TH JANUARY, 2007, APPEALS WERE FILED BY THE DEPARTMENT IN RESPECT OF ASSESSMENT YEAR 1999-2000, 2000-01, 2001-02 AND 2004-05 AND ON THE SIMILAR FACTS, THE CIT(A) HAS CONCLUDED THAT PROCEEDINGS INITIATED U/S 153A WAS AB INITIO NULL AND VOID. AN APPEAL WAS FILED BY THE DEPARTMENT AGAINST THIS ORDER OF THE CIT(A) BEFORE THE TRIBUNAL, JABALPUR BENCH AND THE JABALPUR BENCH VIDE ORDER DATED 26.4.2007 DISMISSED ALL THE FOUR APPEALS OF THE REVENUE. HE, ACCORDINGLY, PLEADED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED BY T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEARS 1999-2000 TO 2001-02 AND 2004- 05. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND ALSO ORDER OF THE TRIBUNAL DATED 26.4.200 7 IN ASSESSEES OWN CASE IN RESPECT OF FOUR ASSESSMEN T YEARS, WHICH WAS ALSO DECIDED IN THE SAME BUNCH OF APPEAL BY THE LD. CIT(A) VIDE ORDER DATED 18 TH JANUARY, 2007. THERE IS NO DISPUTE WITH REGARD TO T HE FACTUAL POSITION THAT NO SEARCH WAS CARRIED OUT AT ASSESSEES PREMISES IN PURSUANCE OF AUTHORIZATION ISSUED IN THE NAME OF THE ASSESSEE. IT IS ALSO CLEA R FROM THE ORDER OF THE CIT(A) THAT IN PURSUANCE OF T HE LEGAL OBJECTION OF THE ASSESSEE FOR FRAMING ASSESSMENT U/S 153A, REPORT WAS SOUGHT FROM THE 12 AO, WHICH HE FILED VIDE LETTER DATED 29.12.2006. IN THE REPLY, THE AO HAS STATED THAT THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 153A, DID NOT FILE ANY OBJECTION AND IN VIEW OF THIS FACT, THE OBJECTION N OW RAISED DESERVES TO BE REJECTED. IT WAS ALSO ADMITTE D THAT WARRANT OF AUTHORIZATION IN PURSUANCE TO WHICH HIS RESIDENCE WAS COVERED WAS IN THE NAMES OF MR. SANTOSH KUMAR SAHU AND M/S. ASHOK TRADERS AND DURING THE COURSE OF THIS SEARCH ACTION, INCRIMINAT ING DOCUMENTS LIKE BANK PASS BOOK AND CASH WERE SEIZED. THE LD. CIT(A) HAS CONSIDERED THE COMMENTS OF THE AO. THE TRIBUNAL IN ITS ORDER DATED 26.4.200 7 AFTER ELABORATELY DISCUSSING THE PROVISIONS OF SECT ION 153A HELD AS UNDER :- SINCE LANGUAGE OF THE PROVISION IS VERY CLEAR WHIC H MANDATES THAT NOTICE UNDER THIS SECTION CAN BE ISSUED TO SUCH PERSON IN WHOSE CASE SEARCH IS INITIATED U/S 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY OTHER ASSETS ARE REQUISITIONED U/S 132A AFTER THE 31 ST DAY OF MAY, 2003, AND UNDISPUTEDLY NEITHER ANY SEARCH ACTION U/S 132 HAS BEEN AUTHORIZED OR CONDUCTED IN THIS CASE NOR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY OTHER ASSETS ARE REQUISITIONED U/S 132A AT ALL AFTER THE STIPULATED DATE, THEREFORE, I AM OF THE CONSIDERED VIEW THAT NEITHER ANY NOTICE COULD BE ISSUED UNDER THIS SECTI ON NOR ASSESSMENT BE FRAMED U/S 153A OF THE INCOME- TAX ACT, 1961, IN VIEW OF FACTS, CIRCUMSTANCES AND DISCUSSIONS AS HELD IN THE EARLIER PARAGRAPHS. SO T HE ACTION OF THE AO IN THIS REGARD IS UNWARRANTED, UNCALLED FOR AND BAD IN LAW, WHICH HAS RIGHTLY BEE N HELD TO BE AB INITIO VOID BY LD. CIT(A). WHILE CONCURRING WITH HIS FINDINGS AND CONCLUSION IN VIEW OF SPECIFIC PROVISION IN THIS REGARD AND INTERPRETATIO NS AS GIVEN BY VARIOUS COURTS, I UPHOLD THE ACTION OF THE LD. CIT(A) AND DISMISS ALL THE APPEALS OF THE REVEN UE. 7. THE FACTS IN ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION, ARE ALSO FOUND TO BE PARI-MATERIA WI TH THE FACTS OF ASSESSMENT YEAR 1999-2000 TO 2001-02 AND 2004-05, WHICH HAS BEEN DEALT WITH BY THE 13 TRIBUNAL IN ITS ORDER AND HAS BEEN NARRATED IN PARA S 2, 3, 4 & 5 OF HIS ORDER, WHICH READS AS UNDER :- 2. THESE APPEALS ARISE OUT OF THE CONSOLIDATED ORDER WERE HEARD TOGETHER AND INVOLVE SAME FACTS AND SIMILAR ISSUE, HENCE, BEING DISPOSED OFF BY SIN GLE ORDER FOR THE SAKE OF CONVENIENCE. 3. BEFORE LD. CIT(A), IN ALL THESE CASES, A BASIC OBJECTION WAS RAISED VIZ. THAT THE NOTICES ISSUED U /S 153A WAS VOID OF JURISDICTION AND HENCE THE IMPUGNED ORDERS SO PASSED ARE AB INITIO NULL AND VOID FOR THE REASON THAT NO SEARCH ACTION HAD BEEN AUTHORIZED IN THE CASE OF THE ASSESSEE. NOTICE U/S 153A CAN ONLY BE ISSUED IN A CASE WHERE ACTION HAS BEEN CARRIED OUT IN PURSUANT TO WARRANT OF AUTHORIZATION ISSUED IN THAT CASE IT IS STATED BEFO RE THE FIRST APPELLATE AUTHORITY THAT THERE WAS NO WARRANT OF AUTHORIZATION WHICH HAD BEEN ISSUED AND EXECUTED IN THE ASSESSEES OWN CASE. A COPY OF THIS PRELIMINARY OBJECTION WAS GIVEN TO THE AO FOR HIS COMMENTS, WHICH HE FILED VIDE LETTER DATED 29.12.06 . IN REPLY, THE AO HAS STATED THAT THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 153A DID NOT FILE ANY OBJECTION, AND IN VIEW OF THIS FACT, THE OBJECTION NOW RAISED DESERVES TO BE REJECTED. FURTHER THE RESIDEN TIAL PREMISES OF THE ASSESSEE HAD BEEN COVERED UNDER A SEARCH ACTION BUT AT THE SAME TIME HAS ADMITTED THE WARRANT OF AUTHORIZATION IN PURSUANCE TO WHICH HIS RESIDENCE WAS COVERED WAS IN THE NAMES OF MR. SANTOSH KUMAR SAHU & M/S. ASHOK TRADERS AND DURING THE COURSE OF THIS SEARCH ACTION INCRIMINATI NG DOCUMENT LIKE BANK PASS BOOKS AND CASH WERE SEIZED. FURTHER IN PARA 6 HE HAS CONCLUDED THAT IN VIEW OF THESE FACTS, THE PROCEEDINGS U/S 153A MAY BE HELD TO BE VALIDLY INITIATED. 4. IN ORDER TO COUNTER THE COMMENTS OF THE AO, THE ASSESSEES COUNSEL HAS STATED BEFORE THE FIRST APPELLATE AUTHORITY THAT AO HAS SOUGHT TO JUSTIFY ASSUMPTION OF JURISDICTION TO PROCEED AGAINST THE ASSESSEE ON THE GROUND THAT IN RESPONSE TO THE NOTI CE ISSUED U/S 153A, THE ASSESSEE DID NOT RAISE ANY OBJECTION. IT IS A WELL SETTLED POSITION OF LAW THA T THE LEGALITY OF AN ORDER CAN BE QUESTIONED AT ANY STAGE . 14 AS PER THE PROVISIONS OF SECTION 153A THE PRE- REQUISITE CONDITION TO ASSUME JURISDICTION TO PROCE ED AGAINST A PERSON IS THAT A SEARCH ACTION SHOULD HAV E BEEN CARRIED OUT IN PURSUANT TO THE WARRANT OF AUTHORIZATION ISSUED IN THE NAME OF THAT PERSON AS THE WORDS USED FOR ASSUMING JURISDICTION IN THE NAM E OF THAT PERSON AS THE WORDS USED FOR ASSUMING JURISDICTION IN THIS SECTION ARE IN THE CASE OF A PERSON WHERE A SEARCH ACTION IS INITIATED. THIS FACT HAS EVEN BEEN CLEARLY STATED IN SECTION 153B(2)(A) WHICH IS REPRODUCED HEREUNDER : IN THE CASE OF SEARCH, ON THE CONCLUSION OF SEARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED. 5. THE AO HAS NOT DISPUTED THE FACT THAT NO SEARCH ACTION HAS BEEN INITIATED IN THE CASE OF THE ASSESSEE. HIS RESIDENCE WAS COVERED IN PURSUANT TO THE SEARCH ACTION INITIATED IN THE CASE OF MR. SANT OSH KUMAR SAHU AND M/S. ASHOK TRADERS. THE AO THUS HAS WRONGLY ASSUMED JURISDICTION U/S 153A TO PROCEED AGAINST THE ASSESSEE. IT WAS THUS PLEADED THAT THE ORDERS SO PASSED THEREFORE ARE AB INITIO N ULL AND VOID. 8. AS THE FACTS ARE COMMON THE ISSUE UNDER DISPUTE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE REMAINING ASSESSMENT YEARS, COMPRISING IN THE SAME ORDER OF THE CIT(A), WE RESPECTFULLY FOLLOW THE ORDER OF THE TRIBUNAL AND UPHOLD THE ACTION OF THE CIT(A). 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. 5. IT IS PERTINENT TO MENTION THAT THE AFORESAID OR DER ALSO PERTAINS TO THE SAME GROUP WHEREIN SEARCH U/S 132 WAS INITIATED AGAINST SHRI SANTOSH KUMAR SAHU AND M /S ASHOK TRADERS AND SINCE NO NOTICE U/S 153A OF THE A CT 15 WAS ISSUED IN THE NAME OF SHRI PRADEEP KESARWANI AGAINST WHOM NO SEARCH ACTION WAS CARRIED OUT, PURSUANCE OF WARRANT OF AUTHORISATION. THE RESIDEN CE OF SHRI KESHARWANI WAS COVERED PURSUANT TO SEARCH ACTI ON INITIATED IN THE CASE OF SHRI SANTOSH KUMAR SAHU. IT WAS HELD THAT THE ASSESSING OFFICER WRONGLY ASSUMED JURISDICTION U/S 153A OF THE ACT TO PROCEED AGAINST THE ASSESSEE. IDENTICALLY, VIDE ORDER DATED 26.4.2007 T HE JABALPUR BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. PRADEEP KESHARWANI (ITA NOS. 91 AND 92/JAB/2007) HELD THE ACTION OF THE ASSESSING OFFICER AS UNWARRA NTED AND VOID AB INITIO. CHAPTER XIVB PROVIDES FOR AN ASSESSMENT OF UNDISCLOSED INCOME UNEARTHED AS A RES ULT OF SEARCH WITHOUT AFFECTING THE REGULAR ASSESSMENT MADE OR TO BE MADE. SECTION 158BC OF THE ACT STIPULATES THAT CHAPTER XIVB WOULD HAVE AN APPLICATION WHERE SEARCH HAS BEEN EFFECTED UNDER SECTION 132 OF THE ACT OR O N REQUISITION OF BOOKS OF ACCOUNTS, OTHER DOCUMENTS O R ASSET UNDER SECTION 132A. ISSUANCE OF NOTICE IS 16 MANDATORY AND SUCH NOTICE IS THE VERY FOUNDATION FO R JURISDICTION WHICH IS REQUIRED TO BE ISSUED/SERVED UPON THE ASSESSEE WITHIN THE STIPULATED PERIOD. SECTION 158BC(B) PROVIDES FOR AN INQUIRY AND ASSESSMENT. T HE SAID PROVISION READS THE ASSESSING OFFICER SHALL P ROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PE RIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142 SUB-SECTIONS(2) AND (3) O F SECTION 143, 144 AND 145 SHALL, SO FAR AS MAY BE, A PPLY. AN ANALYSIS OF THIS SUB-SECTION INDICATES THAT AFTE R THE RETURN IS FILED, THIS CLAUSE ENABLES THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT BY FOLLOWING THE PROCEDU RES LIKE ISSUE OF NOTICE UNDER SECTION 143(2)/142 AND COMPLETE THE ASSESSMENT U/S 143(3). THE ASSESSING OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTIO N 143(3) ONLY. IN CASE OF DEFAULT IN NOT FILING THE RETURN OR NOT COMPLYING WITH THE NOTICE U/S 143(2)/142, THE ASSESSING OFFICER IS AUTHORISED TO COMPLETE THE ASSESSMENT EX-PARTE U/S 144. OMISSION ON THE PART OF 17 THE ASSESSING OFFICER TO ISSUE NOTICE U/S 143(2) CA NNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CU RABLE, THEREFORE, THE REQUIREMENT OF A NOTICE U/S 143(2) C ANNOT BE DISPENSED WITH. IN VIEW OF THESE FACTS AND THE REQUIREMENT OF THE ACT, THE DECISION FROM HONBLE APEX COURT IN THE CASE OF ACIT V. HOTEL BLUE MOON ( 2010) 188 TAXMAN 113 (SC) CLEARLY COMES TO THE RESCUE TO THE ASSESSEE. EVEN OTHERWISE, THE SCHEME OF BLOCK ASSESSMENT HAS BEEN EXPLAINED BY THE CENTRAL BOARD OF DIRECT TAXES IN PARAGRAPH 39.3 OF CIRCULAR NO. 717 DATED 14 TH MARCH, 1995 (1995) 215 ITR 70. FOR THE PURPOSES O F THIS CASE, CLAUSE (E) IS EXTRACTED HEREUNDER :- (E) PROCEDURE FOR MAKING THE ASSESSMENT : (I) THE ASSESSING OFFICER SHALL SERVE A NOTICE ON SUCH PERS ON REQUIRING HIM TO FURNISH WITHIN SUCH TIME, NOT BEIN G LESS THAN 15 DAYS, AS MAY BE SPECIFIED IN THE NOTIC E, A RETURN IN THE PRESCRIBED FORM AND VERIFIED IN THE SAME MANNER AS A RETURN UNDER CLAUSE (I) OF SUB- SECTION (1) OF SECTION 142 SETTING FORTH HIS TOTAL INCOME INCLUDING UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD AND THE PROVISIONS OF SECTION 142,SUB-SECTIONS (2) AND (3) OF SECTION 143 AND SECTION 144 SHALL APPLY ACCORDINGLY. 18 SECTION 143(2) IS A MANDATORY PROVISION, WHETHER ON E LOOKS IT FROM STANDPOINT OF A REGULAR ASSESSMENT OR FROM ASSESSMENT UNDER CHAPTER XIVB. THE CASE OF THE ASSESSEE IS FURTHER FORTIFIED BY THE RATIO LAID DOW N BY HONBLE PUNJAB AND HARYANA HIGH COURT IN CIT V. AVI -OIL INDIA PRIVATE LIMITED (2010) 323 ITR 242 (P&H) WHER EIN IT WAS HELD THAT THE DEPARTMENT COULD NOT RESORT T O SECTION 292B OF THE ACT TO VALIDATE THE MANDATORY REQUIREMENT OF SERVICE AS POSTULATED UNDER SECTION 143(2) OF THE ACT. THEREFORE, NON-COMPLIANCE WITH SECTION 143(2) OF THE ACT COULD NOT BE TREATED AS A DEFECT IN SERV ICE OF NOTICE WHICH COULD BE CURED UNDER SECTION 292B OF T HE ACT. IT IS PERTINENT TO MENTION HERE THAT AGAINST THIS DECISION, THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT WAS DISMISSED BY THE HONBLE APEX COURT (2009) 317 ITR (ST.) 1. THE CASE OF THE ASSESSEE IS RATHER ON MORE STRONGER FOOTING BECAUSE EVEN NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE WHICH IS AN UNDISPUTED FACT. THE CASE OF THE ASSESSEE IS FURTHE R 19 FORTIFIED BY THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF ASHOK ANAND (2011) 17 ITJ 112 (MP) WHEREIN THE DECISION OF THE HOTEL BLUE MOON (SUPRA) WAS FOLLOWED. THE CASE OF THE ASSESSEE IS ALSO SHELTER ED BY THE DECISION OF THE TRIBUNAL OF INDORE BENCH IN GM INFRASTRUCTURE (2010) 14 ITJ 623 (INDORE), NARENDRA SINGH (2011) 138 TTJ 615 (AGRA); SHRIKANT RATHI (20 12) 19 ITJ 307 (IND), KUBER TOBACCO PRODUCTS (2009) 28 SOT 292 (DEL) (SB), RATIO LAID DOWN IN CEBON INDIA LIMI TED (2009) 184 TAXMAN 290 (P&H). IN VIEW OF THE UNCONTROVERTED FACT AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE, SINCE NO NOTICE U/S 143(2) OF THEM ACT WAS ISSUED TO THE ASSESSEE, THEREFORE, THE ASSESSME NT IS VOID AB INITIO. 5.1 SINCE WE HAVE DECIDED THE ISSUE IN FAVOUR OF T HE ASSESSEE ON THE ISSUE OF NON-ISSUANCE OF NOTICE U/S 143(2) OF THE ACT, THEREFORE, WE ARE REFRAINING OUR SELVES TO GO INTO ACADEMIC DISCUSSION ON THE LEGALITY OF NOTI CE U/S 153C OF THE ACT. 20 IN THE RESULT, ALL THE APPEALS OF THE ASSESSES ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26 TH MARCH, 2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26.3.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-