Sri G Subaschandra Bose L/R of Late Sri G Venkateswara Rao, Visakhapatnam V. The DCIT, Circle-3, Visakhapatnam

MA 7/VIZ/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6241 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 17-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Assessee Lawyers: I KAMASHASTRY
• Keywords: Block assessment
• Section: 154

Judgement Text

MA 7/V/11G.S.C. BOSELR OF LT. G. V. RAO, VSKP PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER M. A . NO. 7 / VIZAG/20 1 1 (ARISING OUT OF IT(SS)A NO.5/VIZ/2006) B LOCK A SSESSMENT PERIOD FROM 1.4.1988 TO 26.11.1998 G. SUBASCHANDRA BOSE L/R OF LATE SRI G. VENKATESWARA RAO, VISAKHAPATNAM VS. DCIT, CIRCLE - 3 VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO.ACYPG 6085H APPELLANT BY: SHRI I. KAMASHASTRY, CA RESPONDENT BY: SHRI TH.L. PETER, CIT(DR) ORDER PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER : THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL PASSED ON 19.2.2007 WITH THE SUBMISSION THAT THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE ASSESSEE A FTER HOLDING THAT DEFECT IN THE NOTICE U/S 158BC IS A CURABLE DEFECT IN THE LIG HT OF JUDGEMENT OF THE SPECIAL BENCH OF THE AMRITSAR BENCH OF THE TRIBUNAL . THE TRIBUNAL ACCORDINGLY CONFIRMED THE ORDER OF THE CIT(A). 2. NOW THIS HONBLE SUPREME COURT IN THE CASE OF AC IT AND ANOTHER VS. HOTEL BLUE MOON 321 ITR 362 HAS HELD THAT NOTICE U/ S 158BC IS THE FOUNDATION OF JURISDICTION. THEREFORE, BY ISSUING A DEFECTIVE NOTICE, THE ASSESSING OFFICER CANNOT ASSUME A JURISDICTION OVER THE ASSESSEE TO FRAME THE BLOCK ASSESSMENT. THEREFORE, THE ORDER OF THE TRIB UNAL IS CONTRARY TO THE JUDGEMENT OF THE APEX COURT RESULTING INTO AN ERROR APPARENT IN THE ORDER OF THE TRIBUNAL. ACCORDINGLY, THE ORDER OF THE TRIBUN AL MAY BE RECALLED. MA 7/V/11G.S.C. BOSELR OF LT. G. V. RAO, VSKP PAGE 2 OF 4 3. THE LD. D.R. HAS BROUGHT OUT CERTAIN MATERIAL FA CTS OF THIS CASE. HE HAS SUBMITTED THAT THE QUANTUM ADDITION WAS CHALLEN GED BEFORE THE CIT(A) RAISING VARIOUS GROUNDS ALONG WITH THE VALIDITY OF THE NOTICE ISSUED U/S 158BC OF THE ACT. THE CIT(A) ADJUDICATED THE ISSUES ON Q UANTUM BUT FAILED TO ADJUDICATE THE ISSUE RELATING TO THE VALIDITY OF TH E NOTICE U/S 158BC. THE ASSESSEE ACCORDINGLY MOVED AN APPLICATION U/S 154 B EFORE THE CIT(A) FOR ADJUDICATION OF THE ISSUE RELATING TO THE VALIDITY OF THE NOTICE U/S 158BC OF THE ACT. BY PASSING AN ORDER U/S 154 OF THE ACT, THE C IT SPECIFICALLY DEALT WITH THE ISSUE OF THE VALIDITY OF THE NOTICE U/S 158BC O F THE ACT. WHILE ADJUDICATING THE ISSUE, THE CIT (A) HAS OBSERVED TH AT DEFECT IN THE NOTICE IS A CURABLE DEFECT IN THE LIGHT OF ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL AMRITSAR BENCH IN THE CASE OF SMT. MAHESH KUMARI BA TRA VS. JCIT 95 ITD 152. THEREFORE, FOR THE DEFECT IN THE NOTICE ISSUE D U/S 158BC, THE ENTIRE BLOCK ASSESSMENT CANNOT BE HELD TO BE INVALID. 4. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIB UNAL AGAINST THE ORDER OF THE CIT(A) AND THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT(A) FOLLOWING THE AFORESAID ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL. 5. THE LD. D.R. FURTHER CONTENDED THAT HONBLE SUPR EME COURT HAS SIMPLY HELD THAT THE NOTICE U/S 158BC IS THE FOUNDA TION OF JURISDICTION. THEY HAVE NOT HELD ANYWHERE THAT FOR THE DEFECTS IN THE NOTICE U/S 158BC ENTIRE BLOCK ASSESSMENT IS TO BE HELD INVALID. THEREFORE, THE ORDER OF THE TRIBUNAL CANNOT BE CALLED TO BE IN CONTRARY WITH THE JUDGEME NT OF THE HONBLE SUPREME COURT. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND DOCUMENTS PLACE D ON RECORD, WE FIND THAT ISSUE BEFORE THE TRIBUNAL WAS WITH REGARD TO THE VA LIDITY OF THE NOTICE ISSUED U/S 158BC OF THE ACT. IN THAT NOTICE, CERTAIN DEFE CTS WERE POINTED OUT BY THE ASSESSEES. THE DEFECTS WERE THAT THE A.O. HAS NOT MENTIONED THE STATUS OF THE ASSESSEES CASE AS HE HAS NOT STRIKED OFF THE S PECIFIC CATEGORY OF THE STATUS MENTIONED IN THE NOTICE. THE OTHER DEFECT W AS POINTED OUT THAT A.O. MA 7/V/11G.S.C. BOSELR OF LT. G. V. RAO, VSKP PAGE 3 OF 4 HAS NOT MENTIONED THE BLOCK PERIOD IN THE NOTICE. NEXT DEFECT WAS POINTED OUT THAT IT WAS NOT SERVED UPON THE ASSESSEE DIRECT LY BUT UPON SUMMON WHO IS IN HIS EMPLOYMENT. FOR THESE MINOR DEFECTS, THE ASSESSEE WANTED THAT THE ENTIRE PROCEEDINGS SHOULD BE HELD TO BE INVALID. T HESE OBJECTIONS OF THE ASSESSEE WERE DEALT WITH BY THE CIT(A) IN HIS ORDER PASSED U/S 154 OF THE ACT. FOLLOWING THE ORDER OF THE SPECIAL BENCH IN T HE AFORESAID CASE, THE CIT(A) HELD THAT THESE DEFECTS ARE NOT OF THAT NATU RE FOR WHICH ENTIRE PROCEEDINGS CAN BE HELD TO BE INVALID AND THESE DEF ECTS ARE CURABLE. SINCE THE DEFECTS ARE CURABLE, THE ENTIRE ASSESSMENT CANN OT BE KNOCKED DOWN. THIS ORDER WAS CHALLENGED BEFORE THE TRIBUNAL AND T RIBUNAL CONFIRMED THE ORDER OF THE CIT(A). 7. NOW THE ASSESSEE IS BEFORE US IN M.A. WITH THE S UBMISSION THAT TRIBUNALS FINDINGS ARE CONTRARY TO THE JUDGEMENT O F THE APEX COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (SUPRA) IN WHICH A PEX COURT HAVE HELD THAT NOTICE U/S 158BC IS THE FOUNDATION OF JURISDICTION. DURING THE COURSE OF HEARING, LD. COUNSEL HAS ADMITTED THAT THERE IS NO DIRECT JUDGEMENT OF THE APEX COURT IN WHICH IT HAS BEEN HELD THAT FOR THE D EFECTS IN THE NOTICE U/S 158BC, THE ENTIRE ASSESSMENT IS TO BE HELD AS INVAL ID. THEREFORE, THE FINDING OF THE TRIBUNAL CANNOT BE CALLED TO BE CONTRARY TO JUDGEMENT OF SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (SUPR A). THUS WE FIND NO MERIT IN THE M.A. OF THE ASSESSEE AND WE DISMISS TH E SAME. 8. IN THE RESULT, THE M.A. OF THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 1.3.2011. SD/ - SD/ - (B R BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED: 1 ST MARCH, 2011 MA 7/V/11G.S.C. BOSELR OF LT. G. V. RAO, VSKP PAGE 4 OF 4 COPY TO 1 SHRI I . KAMASASTRY, C.A. SARASWATHI NILAYAM, 50 - 63 - 10, RAJENDRA NAGAR, VISAKHAPATNAM-530 016. 2 DCIT CIRCLE - 3, VISAKHAPATNAM 3 CIT , VISAKHAPATNAM 4 CIT(A) - 1, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM