Shri Rakesh K. Shah, Ahmedabad V. The ACIT., Cent.Circle-2(3), Ahmedabad

ITSSA 360/AHD/2013

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3073 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-07-2017
• Assessment Year: misc
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH BENSH
• Assessee Lawyers: K C THAKER
• Keywords: Invalid notice; Question of law; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.(SS)A. NO.360/AHD/2013 (BLOCK PERIOD :01.04.1990 TO 08.12.2000) RAKESH K. SHAH, 106, SHANTANU, OPP. CLASSIC GOLD HOTEL, NAVRANGPURA, AHMEDABAD 380 009. VS. ACIT, CENTRAL CIRCLE 2(3) AHMEDABAD. [ PAN NO. ACDPS 9863 L ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI K. C. THAKER, A.R. RESPONDENTBY: SHRI SUBHASH BENSH, CIT-D.R. DATE OF HEARING 13.02.2019 DATE OF PRONOUNCEMENT 28.02.2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEEIS AGAINST THE ORDER DATED 28.05.2013PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) III, AHMEDABAD UNDER SECTION 158BC OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT)ARISING OUT OF THE ORDER DATED 31.01.2003 PASS ED BY THE ASSISTANTCOMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3), AHMEDABAD FOR THE BLOCK PERIOD 01.04.1990 TO 08.12.2000 WITH THE FOLLOWING GROUNDS: 1. THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S. 158BC OF THE ACT IS NOT BARRED BY THE LIMITATION. IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 2 - 2. THE LD CIT(A) HAS FURTHER ERRED IN LAW AND ON FA CTS THAT IN CONFIRMING THE ADDITION OF RS.97,73,720/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT(A) OUGHT TO HAVE ANNULLED THE ORDER BEING B ARRED BY LIMITATION AND/OR OUGHT TO HAVE DELETED THE ADDITIO N OF RS.97,73,720/-. 4. IT IS THEREFORE PRAYED THAT THE ORDERS OF THE LO WER AUTHORITIES MAY BE REVERSED AND THE ASSESSMENT ORDER MAY BE ANNULLE D BEING BARRED BY THE LIMITATION AND THE ADDITION OF RS.97, 73,720/- MAY BE DELETED. 5. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL AT THE TIME OF HEARING. 2. THE BRIEF FACTS LEADING TO THIS CASE IS THIS THA T A SEARCH WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 08.12.2000 . NOTICE U/S 158BC WAS THEN ISSUED ON 07.03.2001 AND SERVED UPON THE ASSES SEE ON 09.03.2001 ASKING HIM TO FILE THE RETURN IN FORM NO.2B WITHIN 15 DAYS , THEREBY SETTING THE DUE DATE ON 24.03.2001. ULTIMATELY, THE ASSESSMENT PROC EEDING WAS COMPLETED WITH CERTAIN PENALTIES WHICH WAS CARRIED BEFORE THE FIRS T APPELLATE AUTHORITY WHO IN TURN DISMISSED THE APPEAL PREFERRED BY THE ASSESSEE BY AND UNDER ORDER DATED 27.01.2004. THE MATTER WENT UP TO THE HONBLE ITAT WHERE FOR THE FIRST TIME THE PARTICULAR GROUND OFASSESSMENT WAS BARRED BY LI MITATION WAS RAISED BY THE ASSESSEE. IN THAT VIEW OF THE MATTER WITH CERTAIN D IRECTION THE LEARNED ITAT BY AND UNDER AN ORDER DATED 08.05.2009 IN IT(SS)A NO.7 4/AHD/2004 SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A). HONBLE TRIBUNA L WAS PLEASED TO PASS FURTHER DIRECTION UPON THE LEARNED CIT(A) IN THE MA NNER AS FOLLOWS: '5. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND ALSO T HE PAPER BOOK FILED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT IN TH E BLOCK ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.97,73,724/- WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A). THE GROUND THAT THE ASSESSMENT WAS BARRED BY LIMITATION RAISED FOR THE FIRST TIME BEFORE THE IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 3 - TRIBUNAL WAS NOT SPECIFICALLY RAISED BEFORE THE LEA RNED CIT(A). BE THAT IT MAY, THE QUESTION OF LIMITATION CAN BE RAISED AT ANY POINT OF TIME BECAUSE IT GOES TO THE ROOT OF THE MATTER. WE FIND SUPPORTS FROM THE VARIOUS DECISIONS IN THE CASE OF CIT VS. MOHD. IQBA L AND OTHERS (1996) 221 ITR 481 (MP), KRISHNA GOPAL BHADRA VS. ITO (198 0) 124 ITR 580 (CAL), CIT VS. COMMONWEALTH TRUST (INDIA) LTD. (199 6) 221 ITR 474 (KER.), WHEREIN COURTS HAVE HELD THAT THE QUESTION OF LIMITATION CAN BE RAISED AT ANY POINT OF TIME BECAUSE IT GOES TO THE ROOT OF THE MATTER. HON'BLE SUPREME COURT IN UOI VS. BRITISH INDIA CORP . LTD. (2004) 268 ITR 481 OBSERVED THAT THE QUESTION OF LIMITATION IS A MANDATE TO THE FORUM AND IRRESPECTIVE OF THE FACT WHETHER IT WAS R AISED OR NOT, THE FORUM MUST CONSIDER AND APPLY IT, IF THERE IS NO DI SPUTE OR FACTS. IN VIEW OF THE ABOVE, WE ADMIT HIS GROUND RELATING TO QUEST ION OF LIMITATION. 6. IN THE CASE OF COMMISSIONER OF INCOME TAX VS. TOLLARAM HASSOMAL (2008) 298 ITR 22 (MP) HON'BLE MA DHYA PRADESH HIGH COURT HAS HELD THAT TRIBUNAL HAVING PE RMITTED THE ASSESSEE TO RAISE ADDITIONAL GROUNDS IN APPEAL, IT OUGHT TO HAVE SET ASIDE THE ORDER OF CIT(A) AND REMANDED THE CASE TO THE CI T(A) FOR DECIDING THE APPEAL AFRESH INSTEAD OF DECIDING THE SAME ON M ERITS BY ITSELF. IN VIEW OF THIS, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND REMANDED THE CASE BACK TO HIS FILE FOR DECIDING THE QUESTION OF LIMITATION. 7. IN SUPPORT OF GROUND NO.3, THE LEARNED AR OF TH E ASSESSEE CONTENDED THAT THE ADDITIONS AGGREGATING TO RS.97,7 3,724 HAVE BEEN UPHELD BY THE LEARNED CIT(A) COMPLETELY DISREGARDIN G VARIOUS SUBMISSIONS MADE BEFORE HIM AND ALSO THE SUBMISSION S MADE ON THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER AND AL SO WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE. SINCE, WE HAVE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A), IT WOULD BE P ROPER THAT THE LEARNED CIT(A) WILL RE-ADJUDICATE THE ISSUES IN RES PECT OF ADDITIONS AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE. 8. IN VIEW OF THE ABOVE, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND REMANDED BACK TO HIS FILE FOR DE CIDING THE APPEAL AFRESH IN THE LIGHT OF OUR OBSERVATIONS AS IN THE F OREGOING PARAGRAPHS.' HOWEVER, THE LEARNED CIT(A) IN TURN AGAIN CONFIRMED THE ADDITION MADE BY THE LEARNED AO. NEEDLESS TO MENTION THAT TH E GROUND OF LIMITATION AS IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 4 - RAISED BY THE ASSESSEE BEFORE THE LEARNED TRIBUNAL WHICH WAS IN TURN DIRECTED TO BE DISPOSED OF BY THE LEANED CIT(A) WAS DISMISSE D. HENCE, THE INSTANT APPEAL BEFORE US. 3. APART FROM THE ORIGINAL GROUNDS TAKEN BY THE ASS ESSEE BEFORE US,AN APPLICATION FOR ADDITIONAL FOLLOWING GROUNDS WAS AL SO MADE FOR ADJUDICATION OF THE MATTER: 1. THE PROCEEDINGS INITIATED U/S 158BC OF THE ACT IS NOT VALID IN LAW AS THE NOTICE U/S 158BC OF THE ACT ALLOWED THE APPE LLANT LESS THAN 15 DAYS TIME FOR COMPLIANCE AND IS THEREFORE NOT IN A CCORDANCE WITH LAW. 2. THE ASSESSMENT MADE IN PURSUANCE OF THE INVALID NOTICE U/S 158BC OF THE ACT IS VOID AB INITIO AND IS THEREFORE LIABLE TO BE ANNULLED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD AO LACKED THE JURISDICTION TO PROCEED WITH THE A SSESSMENT U/S 158BC OF THE ACT. 4. IT IS THEREFORE PRAYED THAT THE NOTICE ISSUED U/ S 158BC OF THE ACT MAY BE QUASHED AND THE ORDERS OF THE LOWER AUTHORIT IES HAVING BEEN PASSED IN PURSUANCE OF THE SAID NOTICE MAY BE SET A SIDE/ANNULLED. IT APPEARS THAT THE ADDITIONAL GROUND PREFERRED BY THE ASSESSEE BEFORE US IS THIS THAT THE NOTICE U/S 158BC IS NOT IN TERMS O F THE STATUTORY PROVISION; INSTEAD OF GIVING CLEAR 15 DAYS OR MORE THE ASSESSE E WAS DIRECTED TO COMPLY WITHIN 15 DAYS OF SERVICE OF SUCH NOTICE. IN FACT T HE VERY JURISDICTION OF THE ASSESSING OFFICER HAS BEEN CHALLENGED BY THE ASSESS EE BY PREFERRING THE ADDITIONAL GROUND BEFORE US. THE NOTICE UNDER SECTI ON 158BC OF THE ACT WAS ISSUED ON 07.03.2001 WHICH WAS SERVED UPON THE ASSE SSEE ON 09.03.2001. THE ASSESSEE WAS REQUESTED TO FILE ITS RETURN OF INCOME WITHIN 15 DAYS FROM THE SERVICE OF SUCH NOTICE. THE CONTENTION OF THE LEARN ED AR AT THE TIME OF HEARING BEFORE US IN THAT SUCH DIRECTION TO FILE THE RETURN OF INCOME WITHIN 15 DAYS IS NOT IN TERMS OF THE STATUTORY PROVISION UNDER SECTI ON 158BC OF THE ACT. SINCE IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 5 - THE VERY FOUNDATION TO INITIATE THE PROCEEDING AGAI NST THE ASSESSEE IS WITHOUT FULFILLMENT OF REQUIREMENT OF SECTION 158BC OF THE ACT, THE ENTIRE PROCEEDING IS LIABLE TO BE SET ASIDE AS ARGUED BY THE LEARNED AR. RELIANCE WERE PLACED BY THE LEARNED AR ON THE JUDGMENT PASSED BY THE JURISD ICTIONAL HIGH COURT IN THE MATTER OF COMMISSIONER OF INCOME TAX-VS-AMIT K. JAI N ALIAS ANIL K. JAIN AND COMMISSIONER OF INCOME TAX-VS-JOLLY FANTASY WORLD L TD. HOWEVER, THE LEARNED DR VEHEMENTLY ARGUED ON THIS P OINT THAT SINCE THIS PARTICULAR POINT WAS NOT TAKEN BEFORE THE AUTH ORITIES BELOW, THE ASSESSEE WILL NOT BE PERMITTED TO RAISE THE SAME BEFORE US B Y FILING THE ADDITIONAL GROUND. HOWEVER, ON MERIT THE LEARNED DR RELIED UPON THE OR DER PASSED BY THE AUTHORITIES BELOW. IT WAS FURTHER CONTENDED BY THE LEARNED DR THAT IN RESPONSE TO THE NOTICE DATED 07.03.2001, THE ASSESSEE FILED ITS REPLY DATED 24.03.2001 REQUESTING THE AUTHORITIES TO EXTEND THE TIME FOR 4 5 DAYS. SINCE THE ASSESSEE HAS ALREADY ACCEPTED THE NOTICE HENCE THE VALIDITY OF T HE SAID NOTICE CANNOT BE CHALLENGED BY THE ASSESSEE AS ALSO ARGUED BY THE LE ARNED DR. IN REPLY TO THAT THE LEARNED AR RELIED UPON THE JUD GMENT PASSED BY THE JURISDICTIONAL HIGH COURT IN THE MATTER OF CIT-VS-J OLLY FANTASY WORLD LTD. ACCORDING TO THE LEARNED AR MAINTAINABILITY POINTS GOES TO THE ROOT OF THE MATTER AND THUS CAN BE RAISED AT ANY TIME EVEN BEFO RE US FOR THE FIRST TIME. 4. HEARD THE LEARNED REPRESENTATIVE OF THE RESPECTI VE PARTIES, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO THE JUDGMENTS RELIED UPON BY THE LEARNED IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 6 - COUNSEL APPEARING FOR THE PARTIES. SINCE THE VERY M AINTAINABILITY OF THE GROUND RAISED BEFORE US BY THE ASSESSEE HAS BEEN CHALLENGE D BY THE REVENUE WE PROPOSE TO DEAL WITH THE SAME. IT MAY BE A FACT THAT THE SAID GROUND HAS NOT BEEN CHALLENGED BY THE ASSESSEE EITHER BEFORE THE AO OR BEFORE THE FIRST A PPELLATE AUTHORITY BUT SINCE THIS QUESTION OF LAW BEING VERY JURISDICTION OF AUT HORITY TOUCHING THE VERY BASIC AND/OR FOUNDATION OF THE INITIATION OF THE PROCEEDI NG AGAINST THE ASSESSEE IS BEING RAISED BEFORE US,THE SAME IS REQUIRED TO BE C ONSIDERED IN VIEW OF THE WELL SETTLED PRINCIPLE OF LAW LAID DOWN BY CATENA OF JUD GMENTS INCLUDING THE APEX COURT IN THIS REGARD. IT IS WELL SETTLED PRINCIPLE OF LAW THAT THERE CANNOT BE ANYESTOPPELOR WAIVER AGAINST THE STATUTE OR LAW. WH ERE THE QUESTION TOUCHES THE ROOT OF THE MATTER BASED ON THE STATUTORY PROVI SIONS AND/OR THE LAW THE SAME CAN BE AGITATED IN THE FURTHER PROCEEDINGS RATHER A T ANY POINT OF TIME BEFORE THE HIGHER FORUM. THE JUDGMENT PASSED IN THE MATTER OF COMMISSIONER OF INCOME TAX-VS-JOLLY FANTASY WORLD LTD. AS CITED BY THE LEA RNED AR ALSO DEALS WITH THE SIMILAR SITUATION WITH THE FOLLOWING OBSERVATIO N: 9. APART FROM THE ABOVE, EVEN IF, IT IS CONSIDERE D FOR THE SAKE OF EXAMINATION THAT THE GROUND SO RAISED BEFORE THE TR IBUNAL COULD ALSO BE RAISED BEFORE THIS COURT IN THE PRESENT APPEALS, TH EN ALSO, WE FIND THAT IT IS WELL SETTLED LEGAL POSITION THAT THERE CANNOT BE ANY ESTOPPEL OR WAIVER AGAINST STATUTE OR LAW. WE MAY MAKE USEFUL REFERENC E TO THE DECISION OF THIS COURT IN CASE OF P.V. DOSHI (SUPRA), WHEREIN T HE QUESTION CAME UP BEFORE THIS COURT FOR CONSIDERATION AS TO WHETHER A NY POINT OR CONTENTION, WHICH WAS EXPRESSLY NOT PRESSED, BUT IF IT TOUCHES TO THE ROOT OF THE MATTER BASED ON THE STATUTORY PROVISIONS OR THE LAW, CAN BE AGITATED IN THE FURTHER PROCEEDINGS BEFORE THE HIGH ER FORUM OR NOT AND THIS COURT IN THE SAID DECISION, OBSERVED THUS: THE LEGAL POSITION ABOUT WAIVER OF SUCH A MANDATOR Y PROVISION CREATED IN THE WIDER PUBLIC INTEREST TO OPERATE AS FETTER ON THE IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 7 - JURISDICTION OF THE AUTHORITY IS WELL SETTLED THAT THERE COULD NEVER BE WAIVER, FOR THE SIMPLE REASON THAT IN SUCH CASES JURISDICTION COULD NOT BE CONFERRED ON THE AUTHORITY BY MERE CO NSENT, BUT ONLY ON CONDITIONS PRECEDENT FOR THE EXERCISE OF JU RISDICTION BEING FULFILLED. IF THE JURISDICTION CANNOT BE CONF ERRED BY CONSENT, THERE WOULD BE NO QUESTION OF WAIVER, ACQUIESCENCE OR ESTOPPEL OR THE BAR OF RESJUDICATE BEING ATTRACTED BECAUSE T HE ORDER IN SUCH CASES WOULD LACK INHERENT JURISDICTION UNLESS THE CONDITIONS PRECEDENT ARE FULFILLED AND IT WOULD BE A VOID ORDE R OR A NULLITY IS NOW WELL BROUGHT OUT IN THE DECISION BETWEEN INVALI DITY AND NULLITY IS NOW WELL BROUGHT OUT IN THE DECISION IN DHIRENDRA NATH GORAI V. SUDHIR CHANDRA GHOSH , AIR 1964 SC 1300, 1304, WHERE THEIR LORDSHIPS HAD GONE INTO THIS MATERIAL Q UESTION AS TO WHETHER THE ACT IN BREACH OF THE MANDATORY PROVISIO N IS PER FORCE A NULLITY. THE , PASSAGE IN MACNAMARA ON NULLITIES AND IRREGUL ARITIES, REFERRED TO IN ASHUTOSH SIKDAR VS. BIHARI LAL KIRTANIA [1907] I LR 35 CAL 61 [FB], AT PAGE 72, WAS IN TERMS RELIED UPON AS UNDER: '....NO HARD AND FAST LINE CAN BE DRAWN BETWEEN A N ULLITY AND AN IRREGULARITY; BUT THIS MUCH IS CLEAR, THAT AN IRREG ULARITY IS A DEVIATION FROM A RULE OF LAW WHICH DOES NOT TAKE AW AY THE FOUNDATION OR AUTHORITY FOR THE PROCEEDING, OR APPL Y TO ITS WHOLE OPERATION, WHEREAS A NULLITY IS PROCEEDING THAT IS TAKEN WITHOUT ANY FOUNDATION FOR IT, OR IS SO ESSENTIALLY DEFECTI VE AS TO BE OF NO AVAIL OR EFFECT WHATEVER, OR IS VOID AND INCAPABLE OF BEING VALIDATED.' THEREAFTER, THEIR LORDSHIPS POINTED OUT THAT WHETHE R A PROVISION FELL UNDER ONE CATEGORY OR THE OTHER WAS NOT EASY O F DISCERNMENT, AS IN THE ULTIMATE ANALYSIS, IT DEPENDED UPON THE N ATURE, SCOPE AND OBJECT OF THE,PARTICULAR PROVISION. THEIR LORDS HIPS IN TERMS APPROVED A WORKABLE TEST LAID DOWN BY JUSTICE COLER IDGE IN HOLMES V. RUSSEL [1841] 9 DOWL 487 AS UNDER: 'IT IS DIFFICULT SOMETIMES TO DISTINGUISH BETWEEN A N IRREGULARITY AND A NULLITY; BUT THE SAFEST RULE TO DETERMINE WHA T IS AN IRREGULARITY AND WHAT IS A NULLITY IS TO SEE WHETHE R THE PARTY CAN IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 8 - WAIVE THE OBJECTION; IF HE CAN WAIVE IT,IT AMOUNTS TO AN IRREGULARITY; IF HE CANNOT, IT IS A NULLITY.' THEREAFTER IT WAS POINTED OUT THAT A WAIVER IS AN I NTENTIONAL RELINQUISHMENT OF A KNOWN RIGHT, BUT OBVIOUSLY AN O BJECTION TO JURISDICTION COULD NOT BE WAIVED, FOR CONSENT (COUL D NOT GIVE A COURT JURISDICTION WHERE THERE WAS NONE. EVEN IF TH ERE WAS INHERENT JURISDICTION, CERTAIN PROVISIONS COULD NOT BE WAIVED. WHAT CAN BE WAIVED [WOULD BE ONLY THOSE PROVISIONS WHICH ARE FOR THE PRIVATE BENEFIT AND PROTECTION OF AN INDIVI DUAL IN PRIVATE CAPACITY, WHICH MIGHT BE DISPENSED WITH WITHOUT INF RINGING ANY PUBLIC RIGHT OR PUBIC POLICY. THIS SETTLED LEGAL POSITION WAS AGAIN REITERATED IN SUPERINTENDENT OF TAXES V.ONKARNAL NATHMAL TRUST, AIR 1975 SC 2065 , WHERE THE QUESTION HAD ARISEN IN THE CONTEXT OF THE ASSAM TAXATION (ON GOODS CARRIED BY ROAD AND ON INLAND WATERWAYS) ACT, 1961. THE ASSESSEE HAD OBTAINED AN INJUNCTION ORDER AGAIN ST THESTATE IN A WRIT PETITION CHALLENGING THE VALIDITY OF THE ACT. THE ASSESSEE HAD NOTSUBMITTED THE RETURN UNDER SECTION 7(1) AND UNDER SECTION 7(2) A NOTICE HAD TO BE ISSUED ONLY WITHIN TWO YEAR S FROM THE END OF THE RETURN PERIOD. THE PROCEDURE OF BEST JUDGMEN T ASSESSMENT WAS LAID DOWN IN SECTION 9(4) AND THE QUESTION AROS E WHETHER, IN VIEW OF THE INJUNCTION ORDER OBTAINED BY THE ASSESS EE, IGNORING THE TWO YEARS' LIMIT LAID DOWN AS A FETTER FOR ISSU ANCE OF THE NOTICE UNDER SECTION 7(2), THE BEST JUDGMENT ASSESS MENT PROCEDURE WAS PERMISSIBLE. AT PAGE 2070, THE LEARNE D CHIEF JUSTICE FIRST HELD THAT IF A RETURN UNDER SECTION 7 (1) WAS NOT MADE, THE SERVICE OF A NOTICE UNDER SECTION 7(2) OF THE ACT WAS' THE ONLY METHOD FOR INITIATION OF A VALID ASSESSMEN T PROCEEDING UNDER THE ACT. THE PERIOD OF TWO YEARS UNDER SECTIO N 7(2) WAS A FETTER ON THE POWER OF THE AUTHORITY AND WAS NOT JU ST A BAR OF TIME. IT WAS THE SCHEME OF THE ACT THAT THE SERVICE DO NOTICE WITHIN TWO YEARS FROM THE END OF THE RETURN PERIOD WAS AN IMPERATIVE REQUIREMENT FORINITIATION OF ASSESSMENT PROCEEDING AS ALSO REASSESSMENT PROCEEDING UNDER THE ACT. FURTHER PROCEEDING, AT PAGE 2071, THEIR LORDSHIPS POINTED OUT THE SETTL EDLEGAL DISTINCTION BETWEEN THE PROVISIONS WHICH CONFERRED JURISDICTION AND PROVISIONS WHICH REGULATED PROCE DURE, BECAUSE IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 9 - JURISDICTION COULD NEITHER TO WAIVED NOR TREATED BY CONSENT, WHILE A PROCEDURAL PROVISION COULD BE WAIVED BY CONDUCTOR AGREEMENT. THEIR LORDSHIPS POINTED OUT THAT IN THAT CASE THE A SSESSEE COULD NOT BE SAID TO HAVE WAIVED THE PROVISIONS OF THE ST ATURE BECAUSE THERE COULD NOT BE ANY WAIVER OF A STATUTORY REQUIR EMENT OR PROVISION WHICH WENT TO THE JURISDICTION OF ASSESSM ENT. THE ORIGIN OF ASSESSMENT WAS EITHER AS ASSESSEE FILING A RETURN AS CONTEMPLATED IN THE ACT OR AN ASSESSEE BEING CALLED UPON TO FILE A RETURN A CONTEMPLATED IN THE ACT. THE RESPONDENTS CHALLENGED THE ACT. THE ORDER OF INJUNCTION DID NOT AMOUNT TO A WAIVER OF THE STATUTORY PROVISIONS. THE ISSUE OF A NOTICE UNDER T HE PROVISIONS OF THE ACT RELATED TO THE EXERCISE OF JURISDICTION UND ER THE ACT IN ALL CASES. THE LEARNED CHIEF JUSTICE IN TERMS POINTED O UT THAT THE REVENUE STATUTES ARE BASED ON PUBLIC POLICY. THE RE VENUE STATUTES PROTECT THE PUBLIC 01 THE ONE HAND AND CONFER POWER ON THE STATE ON THE OTHER. THEREFORE, EVEN IN THE CONTEXT OF SUC H A REVENUE STATUTE LIKE A TAXATION MEASURE SUCH FETTER ON THE JURISDICTION BEING A FETTER LAID TO PROTECT PUBLIC, ON WIDER GRO UND OF PUBLIC POLICY, IT WAS HELD THAT SUCH PROVISIONS WHICH CONF ER JURISDICTION ON ASSESSMENT AND REASSESSMENT COULD NEVER BE WAIVE D FOR THE SIMPLE REASON THAT JURISDICTION COULD NEITHER BE WA IVED NOR CREATED BY CONSENT. IN THE CONCURRING JUDGMENT HIS LORDSHIP, BEG. J., AT PAGE 2077, ALSO POINTED OUT THAT IF THE NOTICE UNDER SECTION 7(2) WAS CONDITION PRECEDENT TO THE EXERCIS E OF JURISDICTION TO MAKE THE BEST JUDGMENT ASSESSMENT, THE DOCTRINE OF WAIVER COULD NEVER CONFER JURISDICTION SO AS TO ENABLE THE PARTIES TO AVOID THE EFFECT OF VIOLATING A MANDATOR Y PROVISION ON A JURISDICTIONAL MATTER EVEN BY AGREEMENT. THIS DEC ISION COMPLETELY SETTLES THE LEGAL POSITION. IT MAKES A D ISTINCTION BETWEEN THE PROVISIONS WHICH CONFER JURISDICTION AN D PROVISIONS WHICH MERELY REGULATE THE PROCEDURE BY HOLDING THAT SUCH PROVISIONS WHICH CONFER JURISDICTION OR SUCH MANDAT ORY PROVISIONS WHICH ARE ENACTED IN PUBLIC INTEREST ON GROUND OF PUBLIC POLICY EVEN IN SUCH REVENUE STATUTES COULD N OT BE WAIVED, BECAUSE OF THE UNDERLYING PRINCIPLE THAT JURISDICTI ON COULD NEITHER BE WAIVED NOR CREATED BY CONSENT.' 10. UNDER THE CIRCUMSTANCES, AS ON THE POINT OF EST OPPEL OR WAIVER, THE POINT IS ALREADY COVERED BY THE DECISION OF THIS CO URT, WE DO NOT FIND IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 10 - THAT A PARTICIPATION BY THE ASSESSEE IN THE EARLIER ROUND OF LITIGATION EITHER BEFORE THE AO OR BEFORE THE TRIBUNAL OR CONS EQUENTLY BEFORE THE AO CAN OPERATE AS A BAR TO THE ASSESSEE TO CHALLENG E THE JURISDICTIONAL AUTHORITY OF THE AO UNDER SECTION 158BC OF THE ACT. THE LEADING JUDGMENT IN THIS POINT IS OF THE CONSTI TUTION BENCH OF THE HONBLE SUPREME COURT IN THE MATTER OF BASHESHAR NATH VS-CI T (1959 AIR 149/SC) WHERE MR. NATH ENTERED INTO A SETTLEMENT SCHEME EST ABLISHED BY THE TAXATION OF INCOME TAX, 1947 BUT THE SAME WAS STRUCK DOWN AS VIOLATIVE OF ARTICLE 14 IN SURAJ MAL MOHTA-VS-VISVANATHA SASTRI. EVEN AFTER THIS JUDGMENT WAS DELIVERED MR. NATH CONTINUED TO PAY INSTALLMENTS UN DER THE SETTLEMENT SCHEME FOR SOME TIME, BUT DEFAULTED THEREAFTER. WHEN HIS P ROPERTIES WERE ATTACHED ON DEFAULT OF NOT PAYING THE INSTALLMENTS, HE ARGUED T HAT THE ATTACHMENT ITSELF WAS ILLEGAL BECAUSE THE ACT HAD BEEN STRUCK DOWN AS UNC ONSTITUTIONAL. IN RESPONSE TO THIS, AN ARGUMENT WAS ADVANCED BY THE ATTORNEY G ENERAL THAT SINCE MR. NATH HAD NOT CHALLENGED THE VALIDITY OF THE STATUTE AND VOLUNTARILY ENTERED INTO A SETTLEMENT THEREBY HE HAD WAIVED HIS RIGHT TO TAKE ADVANTAGE OF THE INVALIDITY OF THE STATUTE. ALTHOUGH THE LAW WAS STRUCK DOWN IN 1954, MR. NATH CONTINUED TO MAKE PAYMENT UPTO SEPTEMBER, 1957. WHILE DEALING WITH THE PLEA OF DIFFERENT JUDGES GAVE DIFFERENT REASONS FOR HOLDING THAT A FUNDAMENTAL RIGHT CANNOT BE WAIVED. CONSEQUENTLY, THE HONBLE SUPREME COURT ALLOWED THE APPEAL OF MR. NATH AND NOT ONLY SET ASIDE THE ATTAC HMENT ORDER PASSED IN 1958 BUT ALSO QUASHED ALL PROCEEDINGS THAT HAD BEGUN FRO M JULY, 1954. 4. CAREFULLY CONSIDERING THE JUDGMENT CITED ABOVE W E HOLD THAT THISLEGAL POINT CAN BE RAISED UP BEFORE US EVEN IF IT IS NOT RAISED BEFORE THE AUTHORITIES BELOW. IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 11 - NOW THE RELATED ISSUE BEFORE US, THEREFORE, IS TO D ECIDE WHETHER THE NOTICE UNDER SECTION 158BC DATED 07.03.2001 SERVED UPON THE ASSESSEE ON 09.03.2001 IS VALID OR NOT BY WHICH THE ASSESSEE WA S DIRECTED TO FILE ITS RETURN OF INCOME WITHIN 15 DAYS. SECTION 158BC STIPULATES THAT SERVICE OF NOTICE TO THE PERSON REQUIRING TO FURNISH THE RETURN WITHIN S UCH TIME NOT BEEN LESS THAN 15 DAYS BUT NOT MORE THAN 45 DAYS, THEREFORE CLEAR 15 DAYS IS ALSO REQUIRED SO AS TO ENABLE THE ASSESSEE TO COMPLY WITH SUCH NOTIC E. THUS, THE NOTICE WHICH WAS ISSUED TO THE AUTHORITIES ASKING THE ASSESSEE T O FILE RETURN IN 15 DAYS IS SEEMS NOT IN ACCORDANCE WITH THE PROVISION OF INCOM E TAX ACT AND THEREFORE VALIDITY HAS BEEN RAISED. THE JUDGMENT CITED BY THE LEARNED ADVOCATE IN THE MATTER OF COMMISSIONER OF INCOME TAX-VS-AMIT K. JAI N @ ANIL K. JAIN ALSO SPEAKS ABOUT THE SAME RATIO. THE RELEVANT PORTION W HEREOF IS AS FOLLOWS: 6. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. WE ARE AWARE OF THE DECISION OF THE APEX COURT WHICH HAS BEEN REFER RED BY THE BOMBAY HIGH COURT. NONETHELESS, WHILE BLOCK ASSESSMENT IS TO BE MADE, THE ASSESSING OFFICER IS HAVING KNOWLEDGE ABOUT THE STA TUTORY PROVISION AND WHILE ISSUING NOTICE HE SHOULD HAVE MENTIONED IN IT ABOUT HIS SOURCE OF POWER AND SHOULD HAVE REFERRED TO TIME WHICH IS REQ UIRED TO BE GIVEN FOR THE PURPOSE OF FILING OF RETURN UNDER SECTION 1 58BC OF THE ACT. THE WORDS MENTIONED IN THE NOTICE ARE WITHIN FIFTEEN DA YS WHEREAS THE PROVISION MANDATES THE TIME OF 'NOT LESS THAN FIFTE EN DAYS'. IN VIEW OF THE DECISIONS OF THE SUPREME COURT REFERRED MORE PARTICULARLY NEW INDIA INDUSTRIES LTD. (SUPRA), WE ARE OF THE OPINION, FIFTEEN DAYS MEANS, CLEAR FIFTEEN DAYS WHICH IS THE REQ UIREMENT UNDER LAW. IN THAT VIEW OF THE MATTER, WE ARE OF THE VIEW THAT TH E NOTICE WHICH WAS ISSUED BY THE AUTHORITY ASKING THE ASSESSEE TO FILE THE RETURN WITHIN FIFTEEN DAYS IS NOT IN ACCORDANCE WITH THE PROVISIO NS OF THE INCOME-TAX ACT AND THEREFORE IT IS INVALID. IN OUR VIEW, THE A UTHORITY WHO IS ISSUING THE NOTICE MUST BE AWARE OF THE ACT AND MUST CONSTR UE THE PROVISION STRICTLY. THE WORDS 'NOT LESS THAN FIFTEEN DAYS' HA VE TO BE INTERPRETED CORRECTLY. IN THAT VIEW OF THE MATTER, SINCE THE AS SESSING OFFICER ASKED THE ASSESSEE TO FILE THE RETURN WITHIN FIFTEEN DAYS OF THE SERVICE OF THE NOTICE, THE NOTICE ISSUED BY THE ASSESSING OFFICER IS INVALID. WE ARE, IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 12 - THEREFORE, OF THE OPINION THAT THE TRIBUNAL HAS RIG HTLY CANCELLED THE ORDER OF THE ASSESSING OFFICER. THE QUESTIONS REFER RED TO US ARE, THEREFORE, ANSWERED IN FAVOUR OF THE ASSESSEE AND A GAINST THE REVENUE. TAKING INTO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER AND RESPECTFULLY FOLLOWING THE JUDGMENT AS CITED ABOVE WE ARE OF THE CONSIDERED OPINION THAT SINCE THE NOTICE IN QUESTION HAS NOT B EEN ISSUED BY GIVING CLEAR 15 DAYS TIME AS PRESCRIBED BY STATUTE TO FILE THE RETU RN BY THE ASSESSEETHE SAME IS, THEREFORE, NOT VALID IN THE EYE OF LAWWHEN STRICT I NTERPRETATION OF THE TAXING STATUTE IS CALLED FOR AS ALSO HELD BY THE HONBLE A PEX COURT IN THE CASE OF MANISH MAHESHWARI-VS-ACIT REPORTED AT (2007) 289 IT R . THE PROVISION OF STATUTE HAS NOT BEEN STRICTLY FOLLOWED NEITHER INTE RPRETED CORRECTLY. WHEN THE VERY FOUNDATION OF THE INITIATION OF THE PROCEEDING AGAINST THE ASSESSEE IS NOT IN TERMS OF THE STATUTORY PROVISIONS, THE ENTIRE PROCE EDING IS VITIATED AND THEREFORE WE ARE INCLINED TO REJECT THE ORDER PASSED BY THE A UTHORITIES BELOW. SINCE THE MAINTAINABILITY POINT AS RAISED BY THE AS SESSEE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE THE OTHER GROUNDS RELATING TO THE MERIT OF THE MATTER SO RAISED BEFORE US BECOME INFRUCTUOUS. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/02/2019 SD/- SD/- ( WASEEM AHMED) ( MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/02/2019 PRITIYADAV, SR.PS IT(SS)A NO.360/AHD/2013 RAKESH K. SHAH VS. ACIT BLOCK PERIOD : 01.04.1990 TO 08.12.2000 - 13 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-III, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 13/02/2019 (DICTATION PAGES 8) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14/02/2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 18/02/2019 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER