Jawaharlal alias subashchand, Coimbatore V. DCIT, Hyderabad

ITSSA 26/HYD/2009

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0305 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-12-2010
• Assessment Year: misc
• Appeal Filed On: 30-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Invalid notice; Search and seizure; Period of limitation; Validity of assessment; Block assessment
• Section: 148; 132; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER IT(SS)A.NO.26/HYD/2009 BLOCK PERIOD 1987-88 TO 1996-97 AND 01.04.1996 TO 13.11.1996 LATE MR. JAWAHARLAL @ SUBASHCHAND REPTD. BY HIS WIFE SMT. SUSHILA BAI AS LEGAL HEIR, HYDERABAD PAN AAXPL-0538-M VS. DCIT, CIRCLE 9(1) HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. C.P. RAMASWAMY FOR REVENUE : MR. D. SUDHAKAR RAO DATE OF HEARING : 03.07.2014 DATE OF PRONOUNCEMENT : 03.09.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY ASSESSEE IS AGAINST THE ORDER OF T HE DCIT, CIRCLE 9 (1) DATED 29.12.2008, PASSED UNDER S ECTION 158BC READ WITH SECTION 254, ON WHICH ASSESSEE PREFERRED DIRECT APPEAL TO THE ITAT AS PER THE THEN EXISTING PROVISIONS OF THE I.T. ACT, 1961. 1.1. ASSESSEE MR. JAWAHARLAL @ SUBHASHCHAND DIED AFTER PREFERRING THE APPEAL AND HIS WIFE SMT. SUSEELA BAI FURNISHED THE DEATH CERTIFICATE AND ALSO IMPLEADED AS LEGAL-HEIR. FURTHER, THE POWER OF ATTORNEY WAS ALSO GIVEN TO HER SON MR. G.V . JABAK IN ORDER TO REPRESENT HER. THE LEGAL HEIRS WERE TAKEN ON RECORD. 2 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. 2. ASSESSEE WAS IN THE BUSINESS OF PAN-BROKING AND AUTO FINANCE. THERE WAS A SEARCH AND SEIZURE OPERATION O N 13.11.1996 ON THE ASSESSEES PREMISES AND CERTAIN DOCUMENTS AN D CASH WERE SEIZED. ASSESSEE IN THE COURSE OF PROCEEDINGS ADMIT TED UNDISCLOSED INCOME OF RS.29,92,000/- AND FILED THE RETURN DECLA RING THE INCOME AS UNDER : ASST. YEAR TOTAL INCOME INCLUDING UNDISCLOSED INCOME COMPUTED U/S.158BB RETURNED/ASSESSED AS ON THE DATE OF SEARCH TOTAL INCOME SOURCE AMOUNT TOTAL INCOME SOURCE AMOUNT 1987-88 25510 25510 1988-89 25000 25000 1989-90 35606 35606 1990-91 26039 26039 1991-92 43500 43500 1992-93 43182 43182 1993-94 286620 86620 1994-95 579450 79450 1995-96 600000 ROI NOT FILED 1996-97 6000000 ROI NOT FILED 1.4.96 TO 13.11.19 96 1106970 14970 TOTAL 33,71,877 3,79,877 TOTAL UNDISCLOSED INCOME FOR THE PERIOD = [ { (A) (C) } + {(D)-(B) } ] = RS.29,92,000/- 2.1. THE ORIGINAL BLOCK ASSESSMENT WAS COMPLETED B Y THE THEN ACIT, CIRCLE 6(4) ON 17.04.1998 DETERMINING TH E UNDISCLOSED INCOME ISSUE-WISE AS UNDER : I. UNDISCLOSED INVESTMENT IN JEWELLERY RS. 3,66,491/ - II. UNDISCLOSED INVESTMENT IN SHARES, INCOME FROM SHARE DEALING & UNDISCLOSED DIVIDEND RS. 7,48,310/ - III. UNEXPLAINED INVESTMENT IN GIRVI BUSINESS & INTEREST EARNED THEREFROM RS. 46,78,436/- IV. UNEXPLAINED INVESTMENT IN AUTO FINANCE BUSINESS & INTEREST EARNED ON SETTLED LOAN & PENDING LOAN. RS. 69,90,140/- 3 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. V. UNEXPLAINED INVESTMENT IN HAND LOAN BUSINESS & INTEREST EARNED THEREFROM RS. 7,54,688/- VI. UNEXPLAINED EXPENDITURE IN MARRIAGE & UNEXPLAINED PERSONAL EXPENDITURE. RS. 5,98,803/ - VII. UNDISCLOSED INCOME FROM DIAMOND TRADING AS ADMITTED. RS. 5,00,000/ - VIII. INCOME FROM INTEREST & COMMISSION RS. 1,00,000/- 3. AGGRIEVED BY THIS ORDER, ASSESSEE PREFERRED APP EAL BEFORE THE ITAT AND A BENCH OF ITAT, HYDERABAD VI DE ITS ORDER IN ITA.NO.52/HYD/1998 DATED 22.02.2007 SET ASIDE THE A SSESSMENT AND REMITTED THE ISSUE TO THE FILE OF A.O. WITH A D IRECTION TO FRAME THE ASSESSMENT DENOVO AFTER AFFORDING A DUE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. IN THE CONSEQUENT PROCEEDING S EVEN THOUGH ASSESSEE HAS FURNISHED VARIOUS MATERIAL, AFFIDAVITS ETC., THE A.O. REJECTED AND REPEATED THE SAME ADDITIONS AS WAS DON E IN THE ORIGINAL ASSESSMENT. THE PRESENT APPEAL IS AGAINST THAT. 4. APART FROM ISSUE ON MERITS, ONE OF THE GROUND R AISED BY THE ASSESSEE IS ABOUT VALIDITY OF ASSESSMENT ON JURISDICTION. IT WAS ASSESSEES CONTENTION THAT A NOTICE UNDER SECTI ON 158BC WAS ISSUED BY STATING THAT ASSESSEE SHOULD FILE THE RET URN OF INCOME WITHIN 15 DAYS AND THIS REQUIREMENT OF GIVING NOT L ESS THAN 15 DAYS TIME IN A NOTICE IN 158BC, WHICH IS A MANDATOR Y REQUIREMENT HAS NOT BEEN FOLLOWED. ACCORDINGLY, THE JURISDICTIO N TO COMPLETE PROCEEDINGS U/S 158BC IS VOID-ABINITIO AND THEREFOR E, THE ASSESSMENT ORDER PASSED SUBSEQUENTLY BECOMES VOID. 5. LD. COUNSEL RESTRICTED HIS ARGUMENTS TO THE ISS UE OF JURISDICTION AS THAT GOES TO THE ROOT OF THE MATTER . IT WAS ALSO FURTHER SUBMITTED THAT THIS GROUND WAS RAISED IN TH E ORIGINAL APPEAL PROCEEDINGS ALSO AND SINCE ALL MATTERS WERE RESTORED TO THE FILE OF A.O. THE SAME ISSUE ALSO RAISED BEFORE THE A.O. IN THE ASSESSMENT AND A.O. EVEN THOUGH DISCUSSED THE SAME IN PAGE 7 OF 4 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. THE ORDER REJECTED THE SAME AS THE ASSESSEE HAS AVA ILED SUFFICIENT TIME SUBSEQUENTLY. 6. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE AO ISSUED NOTICE U/S.158BC ON 27-08-97 DIRECTING THE A SSESSEE TO FILE THE RETURN FOR BLOCK PERIOD WITHIN 15 DAYS WHEREAS THE REQUIREMENT U/S.158BC IS THE NOTICE REQUIRING THE A SSESSEE TO FURNISH THE BLOCK RETURN WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS BUT NOT MORE THAN 45 DAYS. THUS, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE NOTICE ISSUED U/S.158BC IS I NVALID AS THE AO HAS NOT GIVEN THE MINIMUM PERIOD OF TIME FOR FIL ING THE RETURN OF INCOME. CONSEQUENTLY, THE AO HAS NO JURISDICTION TO PROCEED WITH THE ASSESSMENT PROCEEDINGS U/S.158BC. IN SUPPO RT OF HIS CONTENTION, HE HAS REFERRED THE CIRCULAR NO.717 DAT ED 14.08.1995 AND SUBMITTED THAT THE CBDT HAS MADE IT CLEAR THAT THE AO SHALL SERVE A NOTICE ON SUCH PERSON REQUIRING HIM TO FURN ISH A RETURN WITHIN SUCH PERIOD NOT LESS THAN 15 DAYS. THE LD. A R FURTHER CONTENDED THAT THE NOTICE U/S.158BC IS FOUNDATION F OR INITIATING THE PROCEEDINGS AND IF THE NOTICE IS INVALID THEN T HE ASSESSMENT ITSELF IS BAD IN LAW. HE HAS RELIED UPON THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MO ON 321 ITR 362 AND SUBMITTED THAT THE HONBLE SUPREME COURT HA S DEALT WITH AN IDENTICAL ISSUE AND HELD THAT THE NOTICE U/S.158 BC IS MANDATORY AND MAKES VERY FOUNDATION FOR JURISDICTIO N. THE TIME LIMIT PRESCRIBED UNDER THIS SECTION IS OF 15 DAYS F OR COMPLIANCE AND IN CASE OF SEARCH AFTER FIRST JANUARY, 1997 THE TIME LIMIT MAY BE GIVEN UPTO 45 DAYS FOR COMPLIANCE. FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOO N, THE HONBLE HIGH COURT OF KARNATAKA IN CASE OF CIT VS. MICRO LABS LTD. IN ITA NO.2748/2005 C/W ITA NOS.3060/2005, 2303/200 5, 749/2006, 3148/2005 HAS HELD THAT THE AO SHALL SERV E A NOTICE 5 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. U/S.158BC REQUIRING THE ASSESSEE TO SUBMIT THE RETU RN WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS BUT NOT MORE THAN 45 DAYS. THEREFORE, THE MANDATORY PERIOD OF TIME AS STIPULAT ED U/S.158BC IS NOT COMPLIED WITH IF THE NOTICE U/S.158BC CALLS UPON THE ASSESSEE TO SUBMIT THE RETURN OF INCOME WITHIN A PE RIOD OF 15 DAYS, THEN THE SAME IS INVALID. THE LD. AR OF THE A SSESSEE HAS ALSO RELIED UPON THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. BRATHWATE AND CO. 201 ITR 343 AND SUBMITTED THAT THE TERM NOT LESS THAN 7 YEARS HAS BEEN CONSTRUED BY TH E HONBLE SUPREME COURT AS THE PERIOD SHOULD GO BEYOND 7 YEAR S. THE LD. AR HAS ALSO POINTED OUT THAT THE DECISION IN THE CA SE OF CIT VS. MICRO LABS LTD. HAS BEEN FOLLOWED BY THE KARNATAKA HIGH COURT IN THE SUBSEQUENT DECISION IN THE CASE OF CIT VS. GHEW ARCHAND SURANA IN ITA NO.3053 OF 2005 DATED 14TH SEPTEMBER, 2011 AND HELD THAT THE TIME STIPULATED IN THE NOTICE U/S.158 BC IS WITHIN 15 DAYS TIME IT IS VOID AB INITIO. CONSEQUENTLY, THE A UTHORITY HAD NO JURISDICTION TO INITIATE THE PROCEEDINGS AND ORDER PASSED IN A PROCEEDINGS WHICH IS ALSO VOID. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT FILED THE RETUR N IN RESPONSE TO NOTICE U/S.158BC WITHIN THE TIME PERIOD AS PRESCRIB ED UNDER THE PROVISIONS AS WELL AS UNDER THE NOTICE BUT THE RETU RN WAS FILED AFTER ON 19-09-97, AFTER MORE THAN 15 DAYS. WHEN TH E AO HAS PROCESSED THE BELATED RETURN FILED BY THE ASSESSEE WHICH, AMOUNTS EXTENSION OF TIME BY THE AO AND, THEREFORE, THEASSE SSMENT WAS COMPLETED IN THE MANNER AS PRESCRIBED UNDER THE PR OVISION OF SEC.158BC. WHEN THE AO HAS COMPLIED WITH ALL THE PR OCEDURAL REQUIREMENTS WHILE COMPLETING THE ASSESSMENT THEN N O INJURY HAS BEEN CAUSED TO THE ASSESSEE WITH RESPECT TO THE NOT ICE IN QUESTION AND CONSEQUENTLY THERE IS NO DEFECT IN THE PROCEEDI NGS INITIATED ON THE BASIS OF THE SAID NOTICE. HE FURTHER SUBMITTED THAT EVEN IF THERE IS A DEFECT IN THE NOTICE THE SAME IS CURABLE DEFEC T WHICH HAS BEEN 6 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. CURED WHEN THE RETURN OF INCOME FILED BY THE ASSESS EE BEYOND THE PERIOD OF LIMITATION WAS PROCESSED BY THE AO. THE L D. AR RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF SHIRISH MADHUKAR DALVI VS. ACIT 287 ITR 242 AND SUB MITTED THAT THE HONBLE HIGH COURT HAS HELD THAT THE A.O. DID N OT GIVE 15 DAYS CLEAR NOTICE, HOWEVER, IT DID NOT CAUSE ANY PREJUDI CE TO THE ASSESSEE AS THE ASSESSEE WAS SERVED WITH ANOTHER NO TICE. THE LD. DR HAS FURTHER SUBMITTED ASSESSEE DULY PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THEN AS PER THE PROVISIONS OF SEC.292B THE ASSESSEE IS NOT PERMITTED TO RAISE SUCH OBJECTI ON SUBSEQUENTLY. HE HAS FURTHER SUBMITTED THAT THE TIME PERIOD MENTI ONED WITHIN 15 DAYS MEANS AND INCLUDES 15TH DAY. HE HAS ALSO RE LIED UPON THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN CASE OF CIT VS. NIRANJAN LAL VERMA 180 TAXMAN 74. IN REBUTTAL, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE DECISION OF HONBLE BOM BAY HIGH COURT IN THE CASE OF SHIRISH MADHUKAR DALVI (SUPRA) IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE AS THER E WAS A SECOND NOTICE IN THE SAID CASE AND FURTHER THIS DECISION W AS PRIOR TO HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOO N. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUT E THAT NOTICE ISSUED BY THE A.O. U/S.158BC REQUIRING THE ASSESSEE TO FURNISH THE RETURN IN THE PRESCRIBED FORM NO.2B WITHIN 15 D AYS FROM THE SERVICE OF NOTICE. THE LD. DR HAS NOT DISPUTED TH IS FACT THAT THE TIME PERIOD MENTIONED IN THE SAID NOTICE IS WITHIN 15 DAYS. SUB- CLAUSE (II) OF CLAUSE (A) OF SEC.158BC STIPULATES S ERVICE OF A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN IN T HE PRESCRIBED FORM WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS B UT NOT MORE THAN 45 DAYS. THE RELEVANT PART OF SEC.158BC READS AS UNDER : 7 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQ UISITIONED UNDER SECTION 132A, IN THE CASE OF ANY PERSON, THEN , (A) THE ASSESSING OFFICER SHALL - (I) IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED AFTER THE 30T H DAY OF JUNE, 1995, BUT BEFORE THE 1ST DAY OF JANUARY, 1 997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURN ISH 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 T HE 1ST 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 FORTYFIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE A RETURN IN THE PRES CRIBED FORM AND VERIFIED IN THE SAME MANNER AS A RETURN UN DER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142, SETTI NG FORTH HIS TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME FOR T HE BLOCK PERIOD. 8. THUS, IT IS CLEAR THAT THE TIME PERIOD TO BE A LLOWED FOR FURNISHING THE RETURN OF INCOME IS NOT LESS THAN 15 DAYS WHICH MEANS THE TIME PERIOD MUST BE MORE THAN 15 DAYS BUT NOT MORE THAN 45 DAYS. THE WORDS USED IN THE PROVISION IS N OT BEING LESS THAN 15 DAYS AND NOT WITHIN 15 DAYS. THEREFORE, THERE IS A CLEAR DIFFERENCE BETWEEN THE TIME PERIOD ALLOWED FOR FURN ISHING THE RETURN WITHIN 15 DAYS AND NOT LESS THAN 15 DAYS, WH ICH MEANS MORE THAN 15 DAYS WITH A RIDER OF 45 DAYS. THE TERM NOT LESS THAN 15 DAYS HAS BEEN CLARIFIED BY THE CBDT IN CIRCULAR NO.717 IN PARA 39.3(E) AS UNDER: (E) PROCEDURE FOR MAKING BLOCK ASSESSMENT: THE ASS ESSING OFFICER SHALL SERVE A NOTICE ON SUCH PERSON REQUIRI NG HIM TO FURNISH WITHIN SUCH TIME, NOT BEING LESS THAN 15 DA YS, AS MAY BE SPECIFIED IN THE NOTICE, A RETURN IN THE PRESCRI BED FORM AND VERIFIED IN THE SAME MANNER AS A RETURN UNDER CLAUS E (I) OF SUB- SECTION (1) OF SECTION 142 SETTING FORTH HIS TOTAL INCOME INCLUDING UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE OFFICE R SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD 8 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. AND PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143 AND SECTION 144 SHALL APPLY ACCORDINGLY. THE AS SESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE ANY NOTICE U NDER SECTION 148 FOR THE PURPOSE OF PROCEEDINGS UNDER THIS CHAPT ER. THOUGH THE BLOCK PERIOD CAN BE EXTENDED UPTO 10 YEARS IN T HE CASE WHERE THE ASSESSEE HAS NOT DISCLOSED UNDISCLOSED IN COME IN ANYONE OR MORE OF THE PREVIOUS YEARS IN THE BLOCK P ERIODS AND THE ASSESSING OFFICER ALSO DOES NOT FIND ANY MATERI AL INDICATING UNDISCLOSED INCOME IN ANY ONE OR MORE OF THE PREVIO US YEARS COMPRISED IN THE BLOCK PERIOD, IT WILL NOT BE NECE SSARY TO DO THE EXERCISE OF COMPUTING THE UNDISCLOSED INCOME FOR TH E RELEVANT YEARS AND THE EXERCISE MAY BE LIMITED TO THE YEARS IN RESPECT OF WHICH THE UNDISCLOSED INCOME HAS BEEN FOUND. ON DET ERMINATION OF THE UNDISCLOSED INCOME OF THE BLOCK PERIOD, THE ASSESSING OFFICE SHALL ISSUE AN ORDER OF ASSESSMENT AND DETER MINE THE DEMAND PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSME NT. THE ASSETS SEIZED IN THE COURSE OF SEARCH OR TAKEN POSS ESSION OF AS A RESULT OF REQUISITION UNDER SECTION 132A SHALL BE R ETAINED TO THE EXTENT NECESSARY AND SHALL BE DEALT WITH IN THE MAN NER LAID DOWN UNDER SECTION 132B. 9. FURTHER, THE HONBLE KARNATAKA HIGH COURT AFTE R THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HO TEL BLUE MOON (SUPRA) HAS CONSIDERED AND DECIDED AN IDENTICAL ISS UE IN CASE OF CIT VS. MICRO LABS LTD. (SUPRA) IN PARA 13 & 14 AS UNDER : 13. RELIANCE WAS ALSO PLACED BY THE ASSESSEE ON TH E JUDGMENT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX AND ANOTHER VS. HOTEL BLUE MOON REPORTED IN [2010] 321 ITR 362 (SC) TO CONTEND THAT THE NOTICE UNDER SECTION 158BC DEAL ING WITH THE BLOCK ASSESSMENT MAKES SUCH A NOTICE IS REQUIRED TO BE SERVED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCO ME. RELIANCE WAS ALSO PLACED ON THE UNREPORTED JUDGMENT OF THIS COURT IN ITA NO.21/2003 C/W ITA NO.22/2003 DISPOSED OFF ON 03.04.2008, WHEREIN IT WAS HELD THAT WHEN ONE THE N OTICE IS HELD TO BE INVALID, THE ENTIRE PROCEEDINGS WOULD BE COME VOID FOR WANT OF JURISDICTION. FURTHER RELIANCE WAS ALSO PLA CED ON THE UNREPORTED JUDGMENT OF THIS COURT IN THE CASE OF M/ S. WINTER CARE PRIVATE LTD., VS. DEPUTY COMMISSIONER OF INCOM E-TAX DISPOSED OFF ON 15.02.1993 PASSED IN W.P. NO.33832/ 1992, WHEREIN IT WAS HELD THAT WHEN THE NOTICE DID NOT CO NFORM WITH THE REQUIREMENTS OF PROVISIONS OF THE ACT, THE PROC EEDING REQUIRES TO BE QUASHED. 9 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. 14. THE PROCEEDINGS UNDER CHAPTER XIV-B AND THE PRO VISIONS OF SECTION 139 ARE DIFFERENT. A RETURN FILED UNDER SEC TION 139 IS A VOLUNTARY RETURN. A RETURN UNDER CHAPTER XIV-B CANN OT BE FILED VOLUNTARILY. IT IS ONLY WHEN A NOTICE UNDER SECTION 158BC WOULD BE ISSUED BY THE REVENUE. HOWEVER, AS AND WHEN VALI DITY ISSUED, IT IS ONLY THEN THAT A RETURN COULD BE FILE D. WHEN ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOK S OF ACCOUNT, OTHER DOCUMENT OR ASSETS ARE REQUISITIONED UNDER SECTION 132A, IT IS ONLY THEN, THE ASSESSING OFFICE R SHALL PROCEED TO ASSESS THE UNDISCLOSED INCOME. THEREFORE, SECTIO N 158 BA PROVIDES FOR JURISDICTION TO THE ASSESSING OFFICER TO ASSESS THE UNDISCLOSED INCOME IN ACCORDANCE WITH CHAPTER XIV-B . SECTION 158 BA(2) IS A CHARGING SECTION, 158BB PROVIDES FOR COMPUTATION OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND 158 BC PROVIDES FOR PROCEDURE FOR BLOCK ASSESSMENT. THEREFORE, A NO TICE UNDER SECTION 158 BC PROVIDES FOR A PROCEDURE TO BE ADOPT ED FOR BLOCK ASSESSMENT. UNDER THIS PROCEDURE ENVISAGED, THE ASS ESSING OFFICER SHALL SERVE A NOTICE REQUIRING THE ASSESSEE TO FURNISH HIS RETURN WITHIN SUCH TIME NOT BEING LESS THAN 15 DAYS BUT NOT MORE THAN 45 DAYS AS SPECIFIED IN THE NOTICE. THERE FORE, THE TIME TO BE GRANTED TO THE ASSESSEE IN TERMS OF SECTION 1 58 BC IS A MINIMUM OF 15 DAYS AND A MAXIMUM OF 45 DAYS. IF THE SAID PERIOD OF TIME IS NOT GRANTED, THE NOTICE IS INVALI D RENDERING THE ENTIRE PROCEEDINGS AS WITHOUT JURISDICTION. ADMITTE DLY IN THIS CASE, THE NOTICE UNDER SECTION 158BC CALLS UPON THE ASSESSEE TO SUBMIT ITS RETURN OF INCOME WITHIN A PERIOD OF 15 DAYS. WITHIN A PERIOD OF 15 DAYS IS LESS THAN 15 DAYS. THEREFORE , THE MANDATORY PERIOD OF TIME AS STIPULATED UNDER SECTIO N 158 BC HAS NOT BEEN COMPLIED WITH. THE NOTICE THEREFORE IS INVALID. AN INVALID NOTICE CANNOT CONFER ANY JURISDICTION ON TH E AUTHORITY. HENCE, THE ENTIRE PROCEEDINGS ARE BAD IN LAW. THE N OTICE IS AB- INITIO VOID. 10. THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SHIRISH MADHUKAR DALVI(SUPRA) IS ON THE POI NT WHERE THE VALIDITY OF A NOTICE WAS TO BE EXAMINED WHEN A SUBS EQUENT NOTICE WAS ISSUED BY THE AO. THE HONBLE HIGH COURT HAS OB SERVED IN PARA 46 TO 48 AS UNDER: 46. HAVING EXAMINED FACTUAL MATRIX, STATUTORY PROV ISION, LAW LAID DOWN BY VARIOUS COURTS PRESENTLY HOLDING THE F IELD, IF ONE TURNS TO THE FACTS OF THE CASE AT HAND, IT IS NOT I N DISPUTE THAT NOTICE DT. 6 TH JULY, 1998 DID NOT MENTION CORRECT PROVISIONS OF T HE ACT; IT DID NOT MENTION CORRECT BLOCK PERIOD FOR WH ICH THE RETURN 10 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. WAS REQUIRED TO BE FILED; IT DID NOT GIVE 15 DAYS C LEAR NOTICE. THOUGH THE SAID NOTICE WAS DEFECTIVE, IT DID NOT CA USE ANY PREJUDICE TO THE APPELLANT. UNDISPUTED FACTUAL MATR IX REVEALS THAT APPELLANT WAS SERVED WITH ANOTHER NOTICE DT. 1 7TH SEPT., 1998 MENTIONING BLOCK PERIOD FOR WHICH THE RETURN W AS REQUIRED TO BE FILED INCORPORATING CORRECT REFERENCE TO THE SECTIONS APPLICABLE TO THE CASE IN QUESTION AND IT MENTIONED THAT THE PERIOD OF 45 DAYS FOR FILING RETURN WAS AVAILABLE T O THE APPELLANT WHICH THE RETURN WAS REQUIRED TO BE FILED INCORPORA TING CORRECT REFERENCE TO THE SECTIONS APPLICABLE TO THE CASE IN QUESTION AND IT MENTIONED THAT THE PERIOD OF 45 DAYS FOR FILING RET URN WAS AVAILABLE TO THE APPELLANT WHICH THE APPELLANT DID NOT AVAIL. HE WAS DIRECTED TO FILE RETURN. 47. PURSUANT TO THE ABOVE NOTICE DT. 17TH SEPT., 19 98, THE APPELLANT APPROACHED THE DY. CIT VIDE HIS LETTER DT . 28TH SEPT., 1998 AND SOUGHT FURTHER EXTENSION OF 45 DAYS FOR FI LING BLOCK PERIOD RETURN. HE HAS, ACCORDINGLY, FILED HIS RETUR N ON 2 ND NOV., 1998, DECLARING TOTAL INCOME OF ` 1,01,33,700. THE SAME WAS ACCORDINGLY ASSESSED VIDE ASSESSMENT ORDER DT. 30 TH JUNE, 2000. 48. IT IS NOT IN DISPUTE THAT NOTICE DT. 6 TH JULY, 1998 DID NOT CAUSE ANY PREJUDICE TO THE APPELLANT. DURING THE CO URSE OF HEARING, WE SPECIFICALLY ASKED MR. SATHE AS TO WHAT PREJUDICE WAS SUFFERED BY THE APPELLANT ON ACCOUNT OF ALLEGED DEFECTIVE NOTICE DT. 6 TH JULY, 1998. HE MADE A POSITIVE STATEMENT NO SPECIFIC PREJUDICE WAS SUFFERED BY THE APPELLANT. A T ANY RATE, THE NOTICE DT. 6 TH JULY, 1998 SUFFERED FROM ONLY TECHNICAL DEFECTS, IF ANY, AND, IN OUR OPINION, IT WAS PROTECTED UNDER TH E UMBRELLA OF S. 292B OF THE ACT. 11. IT IS CLEAR FROM THE FACTS OF THE SAID CASE T HAT WHEN THE SUBSEQUENT NOTICE WAS ISSUED THEN THE ALLEGED DEFEC TIVE NOTICE DID NOT CAUSE ANY PREJUDICE TO THE ASSESSEE. THEREFORE, THE SAID DECISION IS NOT APPLICABLE IN THE FACTS OF THE PRES ENT CASE WHERE THE ONLY NOTICE ISSUED U/S.158BC WAS CONTRARY TO THE PR OVISIONS OF SEC.158BC. 12. AS REGARDS THE SPECIAL BENCH DECISION IN CASE OF NAVIN VERMA VS. ACIT 100 ITD 73, THE SAID DECISION HAS BE EN CONSIDERED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE C ASE OF 11 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. NIRANJAN LAL VERMA (SUPRA) WHEREIN THE COUNSEL FOR THE ASSESSEE GAVE UP THE OBJECTION RAISED BEFORE THE TRIBUNAL RE GARDING INVALIDITY OF THE NOTICE ISSUED U/S.158BD. THEREFOR E, NO FINDING HAS BEEN GIVEN BY HONBLE PUNJAB & HARYANA HIGH COU RT ON THE ISSUE OF VALIDITY OF NOTICE. 13. LEARNED D.R. RELIED ON THE DECISION OF CIT VS. NAVEEN VARMA 346 ITR 100 P & H HIGH COURT WHEREIN THE HON BLE HIGH COURT HAS HELD THAT ITAT ERRED IN CONCLUDING THAT F AILURE TO GIVE NOTICE OF 15 DAYS WILL VITIATE THE ASSESSMENT ITSEL F WITHOUT CONSIDERING THE PREJUDICE TO THE ASSESSEE. IT WAS F URTHER HELD THAT TOTAL ABSENCE OF NOTICE MAY BE ON A DIFFERENT FOOTI NG AND IF NOTICE IS DULY SERVED, ASSESSEE CAN EITHER AVAIL ALL THE STAT UTORY TIME FOR FILING THE RETURN IRRESPECTIVE OF THE SHORTER PERIO D MENTIONED IN THE NOTICE OR CAN BE GIVEN FRESH OPPORTUNITY IF IT IS H ELD THAT ASSESSEE IS SUFFERED PREJUDICE ON ACCOUNT OF SHORTER PERIOD MENTIONED IN THE NOTICE. EVEN THOUGH THIS DECISION OF THE HONBLE P & H HIGH COURT IS IN FAVOUR OF REVENUE, IT IS NOTICED THAT THERE I S NO DISCUSSION OF DECISION OF HONBLE SUPREME COURT GIVEN IN THE CONT EXT OF BLUE MOON HOTELS (SUPRA). SINCE THE HONBLE KARNATAKA HI GH COURT IN THE CASE OF MICRO LABS LTD. (SUPRA) HAS CONSIDERED ELABORATELY, WE PREFER THE DECISION OF KARNATAKA HIGH COURT. MOREOV ER, WHEN THERE ARE TWO NON-JURISDICTIONAL HIGH COURT ORDERS GIVING CONTRARY JUDGMENTS, JUDICIAL PROPRIETARY REQUIRES THAT THE O NE WHICH IS IN FAVOUR OF THE ASSESSEE IS TO BE PREFERRED. THEREFOR E, WE ARE OF THE OPINION THAT THE DECISION OF KARNATAKA HIGH COURT I N THE CASE OF MICRO LABS (SUPRA) WILL EQUALLY APPLY TO THE FACTS OF THE PRESENT CASE. 14. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE PERIOD OF TIME STIPULATED U/S.158BC B EING NOT LESS THAN 15 DAYS THEREFORE, THE NOTICE ALLOWING THE AS SESSEE TO FILE THE 12 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. RETURN WITHIN 15 DAYS IS CONTRARY TO THE MANDATORY CONDITION AS PROVIDED U/S.158BC. ACCORDINGLY, THE SAID NOTICE IS INVALID IN VIEW OF THE DECISIONS OF HONBLE SUPREME COURT IN THE CA SE OF HOTEL BLUE MOON AS WELL AS DECISION OF KARNATAKA HIGH COU RT IN THE CASE OF MICRO LABS LTD. CONSEQUENTLY, THE ASSESSMENT FRA MED BY THE A.O. BASED ON THE INVALID NOTICE IS VOID AND LIABLE TO BE SET ASIDE. 15. SINCE THE ASSESSMENT ITSELF IS HELD VOID AND SET ASIDE, WE, THEREFORE, PROPOSE NOT TO GO INTO THE MERITS OF THE CASE. 16. IN THE COURSE OF PRESENT PROCEEDINGS, ASSESSEE RAISED ADDITIONAL GROUND ON THE ISSUE THAT TAXES PAID SHOU LD BE REFUNDED IN CASE THE ASSESSMENT IS HELD INVALID. THIS ADDITI ONAL GROUND EVEN THOUGH STATED TO BE LEGAL GROUND, COULD NOT BE ADMI TTED BY US AS IT INVOLVES EXAMINATION OF FACTS. AS SEEN FROM THE ASS ESSMENT ORDER ASSESSEE HIMSELF HAS DECLARED INCOMES IN THE BLOCK ASSESSMENT. WHETHER ASSESSEE HAS PAID TAXES OR NOT REQUIRE EXAM INATION AS NOTHING IS AVAILABLE ON RECORD NOR ASSESSEE PLACED ANY SUBMISSIONS IN THIS REGARD WHETHER TAXES HAVE BEEN PAID BY HIM OR COLLECTED BY THE REVENUE. BE THAT AS IT MAY, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SHELLY PRODUCTS AND ANOTHER 261 ITR 367 HELD THAT ADMITTED TAX SHOULD NOT BE RE FUNDED. IT WAS HELD THAT - FAILURE OR INABILITY TO FRAME ANOTHER ASSESSMENT A FTER THE EARLIER ASSESSMENT IS SET ASIDE OR NULLIFIED IN APP ROPRIATE PROCEEDINGS DOES NOT ENTITLE THE ASSESSEE TO CLAIM REFUND OF ADVANCE TAX AND TAX PAID ON SELF-ASSESSMENT, BECAUS E TO THAT EXTENT THE ASSESSEE HAS ADMITTED HIS LIABILITY TO P AY TAX IN ACCORDANCE WITH THE LAW. IF THE ASSESSING AUTHORITY , ON AN EARLIER ASSESSMENT MADE BEING SET ASIDE OR NULLIFIE D IN APPROPRIATE PROCEEDINGS, CANNOT MAKE A FRESH ASSESS MENT, IT AMOUNTS TO DEEMED ACCEPTANCE OF THE RETURN OF INCOM E FURNISHED BY THE ASSESSEE. IN SUCH A CASE THE ASSESSING AUTHO RITY IS DENUDED OF ITS AUTHORITY TO VERIFY THE CORRECTNESS AND COMPLETENESS OF THE RETURN, WHICH AUTHORITY IT HAS WHILE FRAMING 13 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARLAL @ SUBASHCHAND, HYDERABAD. A REGULAR ASSESSMENT. THE ASSESSING AUTHORITY MUST ACCEPT THE RETURN AS FURNISHED AND CANNOT IN ANY EVENT RAISE A DEMAND FOR PAYMENT OF FURTHER TAXES. ACCEPTING THE INCOME AS D ISCLOSED IN THE RETURN FURNISHED BY THE ASSESSEE, IT MUST REFUN D TO THE ASSESSEE ANY TAX PAID BY THE ASSESSEE IN EXCESS OF THE LIABILITY INCURRED BY HIM ON THE BASIS OF THE INCOME DISCLOSE D. 16.1. IN VIEW OF THIS, WE ARE OF THE OPINION THAT ADDITIONAL GROUND CANNOT BE ADMITTED. WE ALSO TAKE SUPPORT ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF S.A. BU ILDERS LTD. 289 ITR 26 IN SUPPORT THAT ADDITIONAL GROUND CANNOT BE ADMITTED WHEN THE RELEVANT FACTS ARE NOT ON RECORD AND REQUIRE EX AMINATION OF FACTS. WE ALSO GET SUPPORT IN THIS REGARD FROM THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SO UTHERN GROUP INDUSTRIES 300 ITR 113. IN VIEW OF THIS, ADDITIONAL GROUND RAISED REGARDING REFUND OF TAX IS REJECTED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.09.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 03 RD SEPTEMBER, 2014 VBP/- COPY TO 1 & SMT. SUSHILA BAI W/O. LATE JAWAHARLAL @ SUBASH CHAND, HYDERABAD C/O. MR. C.P. RAMASWAMI, ADVOCATE, 102 & 303, GITAJNALI, PLOT NO.108, SRI NAGAR COLONY, HYDERABAD 500 073. 2. DCIT, CIRCLE 9(1), HYDERABAD. 3. D.R. B BENCH, ITAT, HYDERABAD.