ACIT CENT. CIR. - 24 & 26, MUMBAI V. M/s. APOORVA CATERERS, MUMBAI

ITSSA 232/MUM/2006

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1189 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-03-2015
• Assessment Year: misc
• Appeal Filed On: 09-08-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MISRA
• Keywords: Search and seizure; Corroborative evidences; Procedural lapse; Block assessment; Reason to believe; Documents seized
• Section: 143(3); 147; 145; 148; 6; 132; 144; 15

Judgement Text

1 , ' INCOME TAX APPELLATE TRIBUNAL,MUMBAI- A,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANJAY GARG,JUDICIAL MEMBER ( )/.IT(SS)A NO.232/MUM/2006, /BLOCK PERIOD-14.01.97 TO 13.09.01 THE ASSTT. CIT, CENTRAL CIRCLE-24 & 26, 4 TH FLOOR, ROOM NO.465, ASSESSEEYAKAR BUILDING, M.K. ROAD MUMBAI-400 020. VS M/S. APOORVA CATERERS FLAT NO.2, MILAN BUILDING, PERIN NARIMAN STREET, FORT MUMBAI-400 001. PAN:AABFA 7369 M ( / ASSESSEE) ( / RESPONDENT) C.O. NO.49/MUM/2009 ARISING OUT OF IT(SS)A NO.232/MUM/ 2006 M/S. APOORVA CATERERS MUMBAI-400 001. VS THE ASSTT. CIT, CENTRAL CIRCLE-24 & 26, MUMBAI-400 020. (CROSS OBJECTOR) ( / RESPONDENT) /ASSESSEE BY : SHRI DEEPAK TRALSHAWALA / REVENUE BY : MS. S. MISRA / DATE OF HEARING :14 - 09-2015 / DATE OF PRONOUNCEMENT :07 -10-2015 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS DT.24.05.2006 OF CIT(A)-14,M UMBAI, THE ASSESSING OFFICER(AO) HAS FILED FOLLOWING GROUNDS OF APPEALS: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE DID NOT FILE RETURN FO R AY. 1999-00 AND 2000-01, EVEN THOUGH THE DUE DATES FOR FILING SUCH RETURNS OF INCOME HAD EX PIRED BEFORE THE DATE OF SEARCH I.E. 13.09.2001 AND THEREBY ERRED IN DELETING THE ADDIT IONS ON ACCOUNT OF NET PROFIT OF RS. 22,81,664/- AND RS. 11,49,245/- RESPECTIVELY ESTIM ATED BY THE AO ON THE BASIS OF SEIZED PAPERS AS PER PROVISIONS OF SECTION 158BB(1 )(CA). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 81,773/- FOR A.Y. 99-0 0 ON ACCOUNT OF UNPAID SALES TAX WITHOUT CONSIDERING THE PROVISIONS OF SEC. 158BB(1 )(CA). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS. 3,11,725/- FOR A.Y. 20 00-01 ON ACCOUNT OF UNPAID SALES TAX WITHOUT CONSIDERING THE PROVISION OF SEC. 158BB(1 ) (CA). 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,83,176/- FOR AY. 200 0-01 ON ACCOUNT OF PROFIT FROM CONTRACT WITH SILVERLINE TECHNOLOGY LTD. 5. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND A ND/OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 6. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROU NDS STATED ABOVE, THE ORDER OF THE CIT(A), C-IV, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSES SING OFFICER RESTORED. APOORVA CATERERS-IT(SS)A232/06.BP:14.1.97 TO 13.9.0 1 2 CO NO. 49/MUM/2009 THE ASSESSEE-FIRM HAS FILED FOLLOWING GROUNDS OF AP PEAL IN THE CROSS OBJECTION(CO) FILED BY IT. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX CENTRAL (APPEALS) IV, MUMBAI, ERRED IN FAILING TO C ONSIDER THAT THE ASSESSMENT ORDER U/S 158BB WAS NON EST AND BAD IN LAW AB INITIO, AS I. NO NOTICE U/S 143(2) WAS ISSUED BY THE ASSESSIN G OFFICER. II. NO SATISFACTION~ WAS RECORDED BEFORE ISSUING NOTICE U/S 15880-' THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, MODIFY OR DELETE THE ABOVE CROSS OBJECTIONS. THE CO IS ACCOMPANIED BY AN APPLICATION WHERE IT WA S STATED THAT FIRM WAS DISSOLVED ON 9.9.1999,THAT NO PROCEEDINGS UNDER THE ACT WERE PEN DING AGAINST IT, THAT ON RECEIPT OF THE NOTICE OF HEARING OF THE APPEAL FILED BY THE AO,THE ASSESSEE CAME TO KNOW ABOUT THE APPEAL FILED BY HIM,THAT THERE WAS DELAY IN FILING CROSS O BJECTIONS,THAT CONSIDERING THE ABOVE FACTS, SAME SHOULD BE ADMITTED.THE APPLICATION IS ACCOMPAN IED BY AFFIDAVIT DATED 16.7.2009 OF DEVDAS A.ALVA, ONE OF THE PARTNERS OF THE FIRM. IN THE AFFIDAVIT, THE PARTNER HAS REITERATED THE FACTS THAT ARE PART OF THE APPLICATION FILED FOR AD MITTING THE CROSS OBJECTION. THE TRIBUNAL HAD DIRECTED THE DEPARTMENTAL REPRESENTATIVE(DR)TO PROD UCE THE SATISFACTION NOTE FOR INITIATING PROCEEDINGS U/S. 158BD OF THE ACT AND COPY OF THE N OTICE ISSUED U/S. 143(2) OF THE ACT. THE AO VIDE HIS LETTER DT.02.07.13 FORWARDED THE DOCUME NTS TO THE OFFICE OF THE DR WHO LATER ON FURNISHED THE SAME BEFORE THE TRIBUNAL. BRIEF FACTS: 2.A SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT TH E RESIDENCE OF DEVDAS A.ALVA ON 13.9. 2001.DURING THE ACTION,A LOOSE PAPER FILE MARKED A- 1WAS SEIZED.PAGES NO 1-17 CONTAINED A COPY OF THE CATERING CONTRACT ENTERED INTO BY APPOR VA CATERERS AND OOTERS CLUB AND PAGE NO. 26 TO 28 WERE THE BILLS RAISED BY THE ASSESSEE ON M /S. SILVER LINE TECHNOLOGIES LTD. FOR RS. 10.63 LACS.A SIMULTANEOUS SEARCH WAS ALSO CARRIED O UT IN THE CASE OF M/S. LALIT REFRESHMENTS. STATEMENTS OF PARTNERS WERE RECORDED U/S.131 OF THE ACT ON 24.10.01 AND 8.11.2001BY THE DDIT(INV.).AS PER THE AO,IN THE STATEMENTS,THE PART NERS ADMITTED UNDISCLOSED INCOME OF RS.70.00 LACS APPROX. THE ASSESSEE HAD FILED RETURN OF INCOME FOR AY 97-98 SAND 98-99 PRIOR TO THE DATE OF SEARCH.HOWEVER,IT HAD NOT FILED ITS RETURN FOR AY.1999-00.THE AO ISSUED NOTICE U/S. 158BD OF THE ACT AND DIRECTED THE ASSESSEE TO FIURNISH BLOCK RETURN WITHIN 16 DAYS.IT FILED RETURN ON 23.8.2005 DISCLOSING LOSS OF RS.9.84 LACS .THE AO DIRECTED THE ASSESSEE TO FURNISH EXPLANATION REGARDING SEIZED PAPERS AND TO PRODUCE BOOKS OF ACCOUNT WITH SUPPORTING EVIDENCES.AFTER CONSIDERING THE SUBMISSION OF THE A SSESSEE,THE AO ASSESSED THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD AS UNDER : SR.NO. NATURE OF INCOME ASSTT. YEAR UNDISCLOSED INC OME(RS.) 1. NET PROFIT 1999-00 22,81,864 2. NET PROFIT 2000-01 11,49,245 3. BST 1999-2000 81,773 4. SALES TAX 2000-02 3,11,725 5. GP ON SILVER LINE CONTRACT 2000-01 4,25,593 TOTAL 42,50,200 THE ASSESSEE AGITATED THE MATTER BEFORE THE FIRST A PPELLATE AUTHORITY(FAA).BEFORE HIM,THE ASSESSEE STATED THAT THE ORDER PASSED BY THE AO WAS ILLEGAL,UNJUSTIFIED AND BAD IN LAW,THAT NOTICE U/S.158BD WAS SERVED AFTER TWO YEARS,THAT NO SATISFACTION WAS RECORDED BY THE AO PASSING ON SEARCH MATERIAL THAT UNDISCLOSED INCOME BELONGED TO ANY OTHER PERSON.IT MADE ELABORATE SUBMISSIONS ABOUT THE ADDITIONS MADE BY T HE AO FOR VARIOUS AY.S. AFTER CONSIDERING THE BLOCK ASSESSMENT ORDER AND TH E SUBMISSIONS OF THE ASSESSEE THE FAA UPHELD THAT NOTICE U/S.158BD WAS ISSUED IN TIME,THA T ESTIMATED ADDITIONS MADE BY THE AO APOORVA CATERERS-IT(SS)A232/06.BP:14.1.97 TO 13.9.0 1 3 WERE NOT BASED ON ANY DOCUMENTARY EVIDENCES,THAT TH E GP AND NP SHOWN BY THE ASSESSEE WAS BOUND TO BE LOWER THAN THE OTHER ASSESSING ENGAGED IN GENERAL CATERING BUSINESS,THAT THE DDIT(INV.)HAD ASKED QUESTION ABOUT THE SEIZED PAPER S TO THE NON-WORKING PARTNERS AND NOT TO THE MANAGING PARTNER I.E.DEVDAS ALVA,THAT IT WAS NO T PROVED THAT THE SEIZED MATERIAL BELONGED TO THE ASSESSEE THOUGH THE AO HAD MADE SUCH AN ALLE GATION,THAT THAT NO PAPERS WERE FOUND FOR THE AY.2000-01,THAT AO HAD MECHANICALLY APPLIED SAM E RATE OF GP AND NP OF AT.1999- 00,THAT THE ADDITION MADE BY HIM FOR THE AY.1999-00 (RS.22.81LAKHS)AND AY.2001-02 (RS.11.49 LAKHS) WERE NOT JUSTIFIED,THAT THE AO, WH ILE FINALISING THE BLOCK-ASSESSMENT,HAD NOT CONSIDERED THE EXPENSES INCURRED BY THE ASSESSEE.HO WEVER HE UPHELD THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS U/S.145(1)OF THE AC T.HE FURTHER OBSERVED THAT BLOCK ASSESSMENT HAD TO BE MADE ON THE BASIS OF MATERIAL FOUND DURING THE SEARCH ACTION ONLY,THAT IMPUTING OF PROFIT ON ESTIMATE BASIS HAD TO BE REST RICTED TO PART OF THE BLOCK PERIOD FOR WHICH MATERIAL SEIZED WAS FOUND.HE REWORKED THE RESULTS O F BOOKS OF ACCOUNTS FOR THE BLOCK PERIOD. 4. BEFORE TAKING UP THE APPEAL FILED BY THE AO,WE WOUL D LIKE TO DEAL WITH THE ISSUES RAISED BY THE ASSESSEE IN ITS CO.THE FIRST ISSUE IS ABOUT REC ORDING OF SATISFACTION FOR INITIATING PROCEED - INGS U/S.158BD OF THE ACT.THE AUTHORISED REPRESENTA TIVE(AR)STATED THAT IN THERE WAS NO MATERIAL ON RECORD TO SHOW THE AOS SATISFACTION T HAT DOCUMENTS SEIZED FROM THE SEARCHED PERSON INDICATED THAT INCOME BELONGING TO THE ASSES SEE WAS NOT OFFERED FOR TAXATION. DEPARTMENTAL REPRESNETATIVE(DR)SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD RAISED THE ISSUE BEFORE THE FAA ALSO.W E ARE OF THE OPINION THAT A BARE READING OF THE PROVISIONS OF SECTION 158BD SHOWS THAT FOR TAKI NG ACTION UNDER THE SAID SECTION, THE AO IS REQUIRED TO BE SATISFIED THAT THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS FOUND IN THE SEARCH SHOWED UNDISCLOSED INCOME OF THE PERSON OTHE R THAN ONE AGAINST WHOM THE SEARCH WAS CONDUCTED AND THAT THE SATISFACTION IS REQUIRED TO BE PRECEDED BY THE INVESTIGATION AND THE INVESTIGATION IS NOT REQUIRED TO BE PRECEDED BY THE SATISFACTION.IN THE CASE OF JANKI EXPORT INTERNATIONAL (278 ITR 296) HONBLE DELHI HIGH COUR T HAS HELD AS UNDER SECTION 158BD OF THE INCOME-TAX ACT, 1961, IS SOMEW HAT ANALOGOUS TO SECTION 147 IN SO FAR AS THE PROCEDURE THAT IS REQUIRED TO BE FOLLOWED. S ECTION 147 CONTEMPLATES THAT IF THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME, THEN NOTICE CAN BE ISSUED UNDER SECTION 148 OF THE ACT. SO FAR AS S ECTION 158BD OF THE ACT IS CONCERNED, THE ASSESSING OFFICER HAS TO BE SATISFIED THAT THERE IS UNDISCLOSED INCOME. UPON SUCH SATISFACTION, THE ASSESSING OFFICER IS REQUIRED TO FORWARD THE RE LEVANT DOCUMENTS, PAPERS, ETC., TO THE ASSESSING OFFICER WHO IS REQUIRED TO ASSESS THE PER SON IN RESPECT OF WHOM THE UNDISCLOSED INCOME HAS BEEN DISCOVERED. ONCE THIS IS DONE, THE PERSON WHO IS TO BE PROCEEDED AGAINST UNDER SECTION 158BD AND THEN SECTION 158BC MUST BE INFORMED ABOUT THE SATISFACTION OF THE ASSESSING OFFICER WHICH HAS BEEN RECORDED AND MUST BE GIVEN A REASONABLE OPPORTUNITY TO OBJECT TO THE SAME. IN THE CASE OF MRIDULA, PROP. DHRUV FABRICS(335 ITR 266),THE HONBLE P&H HIGH COURT HAS HELD AS FOLLOW: 'ACCORDING TO THE PLAIN READING OF SECTION 158BD IB ID, THE ASSESS ING OFFICER, WHILE FRAMING ASSESSMENT OF AN ASSESSEE UNDER SECTION 158BC OF TH E ACT AGAINST WHOM ACTION HAS BEEN TAKEN UNDER SECTION 132 OR 132A OF THE ACT, IS MAND ATORILY REQUIRED TO RECORD SATISFACTION BEFORE ACTION CAN BE INITIATED UNDER SECTION 158BD OF THE ACT AGAINST SUCH OTHER PERSON. IN OTHER WORDS, THE SATISFACTION BY THE ASSESSING OFFI CER MAKING ASSESSMENT UNDER SECTION 158BC OF THE ACT, IN THE CASE OF THE PERSON SEARCHE D, THAT THERE IS CERTAIN UNDISCLOSED INCOME AS A RESULT OF EXAMINATION OF THE SEIZED MATERIAL W HICH BELONGS TO SOME OTHER IDENTIFIED PERSON, IS ESSENTIAL FOR ASSUMING JURISDICTION UNDE R SECTION 158BD OF THE ACT. THE SATISFACTION APOORVA CATERERS-IT(SS)A232/06.BP:14.1.97 TO 13.9.0 1 4 REQUIRED TO BE RECORDED IS PRIMA FACIE SATISFACTION AND IS NOT FIRM OR CONCLUSIVE SATISFACTION AT THAT STAGE. FINALLY,WE WOULD LIKE TO REFER TO THE MATTER OF RAD HEYSHYAM BANSAL(337ITR217)OF THE HONBLE DELHI HIGH COURT,WHO HAS DEALT THE SECTION IN FOLLOWING MANNER: SECTION 158BD OF THE INCOME-TAX ACT, 1961,PROVIDES THAT FOR ASSESSING THE UNDISCLOSED INCOME OF ANY OTHER PERSON, THAT IS, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132, THE ASSESSING OFFICER MUST BE SATISFIED THAT THE UNDISCLOSED INCOME BELONGS TO SUCH PERSON THAT IS, THE PERSON OTHER TH AN THE SEARCHED PERSON. THE ASSESSING OFFICER CANNOT PROCEED AGAINST 'SUCH OTHER PERSON' WITHOUT HAVING THE REQUIRED SATISFACTION. THE REQUIREMENT OF SATISFACTION IS A PREREQUISITE C ONDITION FOR INITIATING ASSESSMENT PROCEEDINGS AGAINST 'ANY OTHER PERSON' UNDER SECTIO N 158BD. THE WORD 'SATISFACTION', APPEARING IN SECTION 158BD, CLEARLY DENOTES THAT IT SHOULD BE BASED UPON THE MATERIAL BEFORE THE ASSESSING OFFICER AND SUCH SATISFACTION SHOULD BE BROUGHT ON RECORD. THE REQUIREMENT OF SATISFACTION IS A STATUTORY REQUIREMENT AND IT CANN OT BE ASSUMED MERELY ON THE BASIS OF CERTAIN MATERIAL. IT CANNOT ALSO BE CORRELATED TO ANY MATER IAL UNTIL AND UNLESS IT IS SHOWN ON RECORD THAT THE SATISFACTION REQUIRED UNDER SECTION 158BD WAS BASED ON SUCH RECORD OR MATERIAL. WHEREVER 'REASON TO BELIEVE' OR 'SATISFACTION' ARE TO BE RECORDED IN WRITING, AT LEAST THE ASSESSING OFFICER SHOULD DEMONSTRATE IN SOME WAY HI S SATISFACTION ABOUT THERE BEING UNDISCLOSED INCOME HIDDEN IN THE SEARCHED MATERIAL. FROM THE ABOVE DISCUSSION,IT IS CLEAR THAT THE REQU IREMENT OF SATISFACTION IS A PREREQUISITE CONDITION FOR INITIATING ASSESSMENT PROCEEDINGS AGA INST ANY OTHER PERSON U/S.158BD. THE WORD SATISFACTION ,APPEARING IN THE SECTION CLEARLY DENOTES THAT IT S HOULD BE BASED UPON THE MATERIAL BEFORE THE AO AND SUCH SATISFACTION SHOULD BE BROUGHT ON RECORD.THE REQUIREMENT OF SATISFACTION IS A STATUTORY REQUIREMENT AND IT CANN OT BE ASSUMED MERELY ON THE BASIS OF CERTAIN MATERIAL.IT CANNOT ALSO BE CORRELATED TO ANY MATERI AL UNTIL AND UNLESS IT IS SHOWN ON RECORD THAT THE SATISFACTION REQUIRED UNDER SECTION 158BD WAS B ASED ON SUCH RECORD OR MATERIAL. WHEREVER REASON TO BELIEVE OR SATISFACTION ARE TO B E RECORDED IN WRITING, AT LEAST THE AO SHOULD DEMONSTRATE IN SOME WAY HIS SATISFACTION ABO UT THERE BEING UNDISCLOSED INCOME HIDDEN IN THE SEARCHED MATERIAL.IN THE PRESENT CASE ,WE FIND THERE WAS NOTHING TO INDICATE THAT THE AO COULD HAVE FORMED AN OPINION AND ARRIVED AT A SATISFACTION THAT THE ASSESSEE HAD NOT TRULY DISCLOSED ITS INCOME.AS THE BASIC SATISFACTIO N FOR ISSUING NOTICE U/S.158 IS MISSING,SO,THE ACTION TAKEN IN PURSUANCE OF IT CANNOT BE ENDORSED. 6 .THE SECOND ISSUE RAISED IN THE CO IS ABOUT NON ISS UANCE OF NOTICE U/S.143(2)OF THE ACT. BEFORE US,AR STATED THAT NO NOTICE WAS ISSUED TO TH E ASSESSEE U/S.143(2) BY THE AO BEFORE COMPLETING THE ASSESSMENT PROCEEDINGS,THAT THE NOTI CE WAS ISSUED TO THE PARTNER,THAT THE ASSESSEE WAS A SEPARATE ENTITY.HE RELIED UPON THE C ASE OF HOTEL BLUE MOON(321ITR362).THE DR SAID THAT NOTICE WAS ISSUED TO THE PARTNER.IN OU R OPINION,ISSUING A NOTICE TO THE PARTNER WAS NOT SUFFICIENT.IN THE CASE OF HOTEL BLUE MOON T HE HONBLE SUPREME COURT HAS HELD AS UNDER: IF THE ASSESSING OFFICER, FOR ANY REASON, REPUDIATE S THE RETURN FILED BY AN ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 158BC(A) OF THE IN COME-TAX ACT, 1961RELATING TO A BLOCK ASSESSMENT, THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SE CTION 143(2) . BY MAKING THE ISSUE OF NOTICE MANDATORY, SECTION 15 8BC,DEALING WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOUNDATION FOR JURISDICT ION. SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCOME. SECTION 158BC PROVIDES FOR ENQUIRY AND ASSESSMENT. AFTER THE RETURN IS FILED, CLAUSE (B) OF SECTION 158BC PROVIDES THAT THE ASSESSING OFFICER S HALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142 , SUB-SECTIONS (2) AND (3) OF SECTION 1 43 , SECTION 144 AND SECTION 145 SHALL, SO FAR APOORVA CATERERS-IT(SS)A232/06.BP:14.1.97 TO 13.9.0 1 5 AS MAY BE, APPLY. THIS INDICATES THAT THIS CLAUSE ENABLES THE ASSESSING OFFICER, AFTER THE RETURN IS FILED, TO COMPLETE THE ASSESSMENT UNDER S ECTION 143(2) BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER SECTION 143(2) /142. THI S DOES NOT PROVIDE ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143(1)(A) : THE OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) ONLY. IF AN ASSESSMENT IS TO BE COMPLETED UN DER SECTION 143(3) READ WITH SECTION 158BC , NOTICE UNDER SECTION 143(2) SHOULD BE ISSUE D WITHIN ONE YEAR FROM THE DATE OF FILING OF THE BLOCK RETURN. OMISSION ON THE PART OF THE AS SESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT B E DISPENSED WITH. IN OUR OPINION NOT ISSUING NOTICE TO THE ASSESSEE W AS NOT A PROCEDURAL IRREGULARITY AND SAME IS NOT CURABLE. THUS,ON THE BOTH THE COUNTS,THE ORDER PASSED BY THE AO U/S.158BD OF THE ACT,IS NOT A VALID ORDER. 7 .WE HAVE DECIDED THE JURISDICTIONAL ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE AO.HOWEVER,WE WOULD LIKE TO MENTION THAT EVEN ON ME RITS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE FAA.HE HAS ANALYSED THE DOCUMENTS SEIZED FROM THE RESIDENCE OF THE ONE OF THE PARTNERS AND HAS GIVEN A CATEGORICAL FINDING OF FACT THAT THERE WAS NOTHING IN THE DOCUMENTS THAT COULD BE LINKED TO THE INCOME ESTIMA TED BY THE AO FOR THE AY.1999-00 AND AY.2000-01.THE AO HAS NOT MENTIONED THE NUMBER OF T HE SEIZED PAGES THAT PROVED THAT THE ASSESSEE HAD ACTUALLY EARNED FOR THE ABOVE REFERRED AY.S.IN OUR OPINION,FOR MAKING BLOCK ASSESSMENT THE AO HAS TO REFER TO THE SEIZES MATERI AL ONLY.IN THE CASE BEFORE US,WE FIND THAT HE HAD NOT DONE ANY SUCH EXERCISE. THE FAA ALSO FOU ND THAT WHILE CALCULATING THE INCOME THE AO HAD NOT TAKEN IN TO ACCOUNT THE EXPENDITURE INCU RRED BY THE ASSESSEE.WE ARE UNABLE AS HOW TAXABLE INCOME CAN BE DETERMINED WITHOUT CONSID ERING THE CORRESPONDING EXPENSES. THEREFORE,WE AGREE WITH THE FAA THAT THE ORDER OF THE AO IS NOT BASED ON RELIABLE EVIDENCE. CONFIRMING HIS ORDER WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STAND DISMISSE D AND THE CO OF THE ASSESSEE IS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH OCTOBER,2015. 07, ,2015 SD/- SD/- ( / SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 07.10. 2015 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.