PARTH ALAMINIUM LTD, Ahmedabad V. THE DCIT CENT CIR .1(4), Ahmedabad

MA 79/AHD/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9198 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHELLY JINDAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Period of limitation; Question of law; Procedural lapse; Block assessment; Time period of passing order; Revised return
• Section: 143(3); 142(1); 148; 132; 144; 10; 15; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) M.A. NO.79/AHD/2012 (IN IT(SS)A NO.376/AHD/2002- BLOCK PERIOD: 01-04-19 88 TO 08-12-1998) PARTH ALUMINUM LTD., AHMEDABAD VS THE D. C. I. T., CEN. CIR-1(4), AHMEDABAD (APPLICANT) (RESPONDENT) APPLICANT BY: SHRI S. N. SOPARKAR, AR RESPONDENT BY: SHELLY JINDAL, CIT DR DATE OF HEARING: 05-10-2012 DATE OF PRONOUNCEMENT: 27-11-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS MISC. PETITION IS FILED BY THE ASSESSEE IN CONSEQUENCE OF THE FINDINGS OF THE EARL IER BENCH IN ITA NO. IT (SS) A NO.376/AHD./2002 DATED 29.12.2011 FOR THE BLOCK PERIOD FROM 1.4.1988 TO 8.12.1998. 2. BRIEFLY STATED, THE ASSESSEES APPEAL WAS DISMIS SED BY THE EARLIER BENCH THEREBY CONFIRMING THE ORDER OF THE L D. CIT (A). THE REASONS RECORDED FOR DISMISSING THE ASSESSEES APPE AL, FOR APPRECIATION OF FACTS AND READY REFERENCE, IS REPRO DUCED, AS UNDER: 6.5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR AND ALSO PERUSED THE FINDINGS OF THE LD. CIT (A) ON THE ISSU E. AS RIGHTLY HIGHLIGHTED BY THE LD. CIT (A), AFTER A SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE, A NOTICE U/S 158BC OF THE ACT DATED 31.5.2000 WAS SLA PPED ON THE ASSESSEE ON 2.6.2000 IN WHICH THE ASSESSEE WAS REQUIRED TO FURN ISH A RETURN OF INCOME FOR THE BLOCK PERIOD WITHIN 45 DAYS FROM THE DATE O F RECEIPT OF THE SAID NOTICE. 2 THIS PERIOD OF 45 DAYS IS THE MAXIMUM PERIOD ALLOWA BLE FOR FILING OF A RETURN AS PER CLAUSE A(II) OF S. 158BC OF THE ACT. AS THE RE WAS NO PROVISION IN THE ACT WHICH PROVIDES FOR FILING OF A RETURN IN RESPON SE TO NOTICE U/S 158 BC OF THE ACT AFTER A LAPSE OF THE PRESCRIBED DATE WHICH COULD BE CONSIDERED AS A VALID RETURN. HOWEVER, IT IS SEEN THAT NO RETURN O F INCOME WAS FURNISHED BY THE ASSESSEE IN CONSEQUENCE TO THE NOTICE U/S 158BC OF THE ACT WITH WITHIN THE DUE DATE. AS COULD BE SEEN FROM THE RECORDS TH AT DUE TO NON-COMPLIANCE OF THE NOTICE U/S 158BC OF THE ACT WITHIN THE DUE D ATE, THE LD. AO HAD ISSUED A SHOW-CAUSE NOTICE DATED 11.10.2000 ASKING THE ASS ESSEE AS TO WHY PROSECUTION U/S 276CCC OF THE ACT SHOULD NOT BE INI TIATED FOR NON-FILING OF THE RETURN. THEREAFTER, A NOTICE U/S 142(1) OF THE ACT WAS SERVED ON THE ASSESSEE INTIMATING THAT NO RETURN WAS FURNISHED BY IT WITHIN THE DUE DATE AND, THUS, IT WAS REQUIRED TO FURNISH VARIOUS DETAI LS AND EXPLANATION SO THAT ASSESSMENT COULD BE CONCLUDED. THUS, THE LD. CIT ( A) WAS WITHIN HIS REALM TO OBSERVE THAT THE RETURN OF INCOME FURNISHED BY T HE ASSESSEE AFTER THE LAPSE OF STIPULATED TIME FRAME PRESCRIBED U/S 158BC OF TH E ACT HAS TO BE TREATED AS NON EST . WE HAVE ALSO DULY PERUSED THE CASE LAWS ON WHICH THE ASSESSEE HAD PLACED ITS RELIANCE, HOWEVER, WE ARE OF THE CON SIDERED VIEW THAT THOSE CASES ARE CLEARLY DISTINGUISHABLE AND HAVE NO RELEV ANCE TO THE ISSUE ON HAND. THE RETURN FURNISHED BY THE ASSESSEE COULD NOT BE ACTED UPON SINCE IT WAS FURNISHED BEYOND THE TIME STIPULATED IN THE STA TUTE; THE LD. AO WAS LEFT WITH NO ALTERNATIVE EXCEPT TO ISSUE A NOTICE U/S 14 2(1) OF THE ACT AS PROVIDED IN CLAUSE (B) OF S. 158BC OF THE ACT. IN VIEW OF T HE ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE F INDING OF THE LD. CIT (A) WHICH REQUIRES OUR INTERVENTION. 3. AGGRIEVED BY THE FINDINGS OF THE BENCH (SUPRA), THE ASSESSEE HAS COME UP WITH THE PRESENT MISC. APPLICATION WHER EIN IT HAS BEEN SUBMITTED THAT DURING THE COURSE OF ORIGINAL HEARIN G, IT HAD PLACED STRONG RELIANCE ON THE FINDINGS OF THE (I) `HONBLE EARLIER BENCH OF THIS TRIBUNAL IN THE CASE OF PRAKASH METAL WORKS V. DCIT IN IT (SS)A NO.168/AHD/2003 DATED 10.4.2008; AND (II) THE RULIN G OF HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.69 OF 2009 IN T HE CASE OF CIT V. PRAKASH METAL WORKS. IT WAS, FURTHER, SUBMITTED THA T WHILE DECIDING ITS APPEAL, THE EARLIER BENCH HAD OVER-LOOKED IN CONSID ERING THE FINDING OF THE HONBLE CO-ORDINATE BENCH AS WELL AS THE RUL ING OF THE HONBLE JURISDICTIONAL HIGH COURT ON A SIMILAR ISSUE WHICH, ACCORDING TO THE ASSESSEE, CONSTITUTES A MISTAKE APPARENT FROM RECOR DS WHICH 3 REQUIRES TO BE RECTIFIED. HENCE, THE ASSESSEE CAME UP WITH THE PRESENT MISC. APPLICATION. 4. IN CONCLUSION, IT WAS SUBMITTED THAT IN THE INTE RESTS OF JUSTICE AND EQUITY, THE ORDER OF THE EARLIER BENCH IN THE C ASE OF THE ASSESSEE REQUIRES TO BE RECALLED AND MODIFIED SUITABLY IN CO NFORMITY WITH THE FINDINGS OF THE CO-ORDINATE BENCH AS WELL AS THE RU LING OF THE HONBLE HIGH COURT (SUPRA) THEREBY GIVING RELIEF TO THE ASS ESSEE. 5. THE LEARNED D. R PRESENT WAS HEARD. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND ALSO METICULOUSLY PERUSED THE CASE LAWS ON WHICH THE ASS ESSEE HAD REPOSED ITS CONFIDENCE. 7. BEFORE DEALING WITH THE ISSUE RAISED BY THE ASSE SSEE, WE WOULD LIKE TO PLACE IT ON RECORD THAT THE ASSESSEES ASSE RTION AT PARA 5 OF ITS MISC. PETITION THAT THE HONBLE TRIBUNAL HAS ERRED IN BRUSHING ASIDE WITHOUT DISTINGUISHING THE RATIO LAID DOWN IN THE D ECISIONS OF HONBLE CO-ORDINATE BENCHES. IS FAR FROM TRUTH. WE WOULD LIKE TO RECALL THE ASSESSEES ATTENTION TO THE FACT THAT THE EARLIER B ENCH HAD, IN FACT, TAKEN COGNIZANCE OF THE ASSESSEES RELIANCE ON THE CASE LAWS. IT HAS SPECIFICALLY BEEN MENTIONED IN THE EARLIER ORDER TO THE EFFECT THAT 6. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS, DILI GENTLY PERUSED THE RELEVANT CASE RECORDS, THE DOCUMENTARY EVIDENCES PR ODUCED BY THE LD. A R IN THE SHAPE OF A PAPER BOOK AND ALSO VARIOUS RULINGS OF THE JUDICIARY CITED SUPRA. THUS, THIS ALLEGATION OF THE ASSESSEE, TO VIEW IT GENTLY, IS WITHOUT ANY BASIS. 4 8. COMING BACK TO THE ISSUE ON HAND, WE WOULD LIKE TO CLARIFY THAT WITH DUE RESPECTS, WE HAVE AGAIN PERUSED THE FINDI NGS OF THE HONBLE EARLIER BENCH IN THE CASE OF PRAKASH METAL WORKS V. DCIT IN IT (SS)A NO.168/AHD/2003 DATED 10.4.2008. WHILE DEALIN G WITH THE ISSUANCE OF NOTICE U/S 143(2) BEFORE COMPLETING THE BLOCK ASSESSMENT, IT WAS HELD THAT NO NOTICE U/S 143(2) W AS SERVED ON THE ASSESSEE AND, ACCORDINGLY, THE IMPUGNED ORDER OF BL OCK ASSESSMENT WAS PASSED WITHOUT ISSUANCE OF ANY NOTICE U/S 143(2 ) OF THE ACT. WITH REGARD TO OTHER ASPECT WHICH DREW ITS (BENCHS ) ATTENTION WAS AS TO WHETHER THE RETURN FOR THE BLOCK PERIOD FILED BEYON D THE TIME ALLOWED UNDER NOTICE WAS VALID OR NOT. THE BENCH, BY DRAWING STRENGTH FROM THE PROVISIONS OF S.158BFA OF THE ACT , HAD STATED THAT, WE FIND THAT THE LEGISLATURE HAD ENVISAGED THE SIT UATION WHERE THE ASSESSEE CAN FILE A VALID BLOCK RETURN BEYOND T HE TIME PRESCRIBED IN THE RELEVANT NOTICE. SECTION 158BFA P ROVIDES FOR CHARGING OF INTEREST FOR THE PERIOD FROM THE DATE O F EXPIRY OF THE TIME LIMIT PROVIDED IN THE NOTICE TILL THE DATE OF FURNISHING OF THE RETURN FOR BLOCK PERIOD. IF IT IS TAKEN THAT THE R ETURN BEYOND THE TIME PRESCRIBED IN THE NOTICE IS INVALID OR NON-EST , THEN ABOVE ENACTMENT U/S 158BFA BECOMES REDUNDANT. IT IS AN ES TABLISHED RULE OF INTERPRETATION THAT ONE SHOULD NOT INTERPRE T A PROVISION IN SUCH A MANNER SO AS TO MAKE WHAT HAS BEEN ENACTED I N OTHER PROVISIONS OF THE ACT AS REDUNDANT. THE LEGISLATUR E DOES NOT ENACT ANYTHING IN THE STATUTE WITHOUT ANY MEANING O R PURPOSE. THUS, IN OUR CONSIDERED OPINION A BLOCK RETURN WHIC H IS FILED BEYOND THE TIME LIMIT PRESCRIBED IN THE NOTICE BUT BEFORE 5 COMPLETION OF THE ASSESSMENT IS A VALID RETURN AND THE SAME CANNOT BE IGNORED BY THE A.O [PARA 5 OF ITAT ORDER] 9. WITH DUE RESPECTS, WE INTEND TO CLARIFY THAT TH E FINDING OF THE HONBLE EARLIER BENCH THAT THE PROVISIONS OF S.158B FA OF THE ACT CANNOT BE EQUATED WITH THE PROVISIONS OF S.158BC AS THE FORMER [S.158BFA] DEALS WITH THE CHARGING OF INTEREST WHER EIN IT HAS BEEN MADE IT ABSOLUTELY CLEAR THAT 158BFA (1) WHERE THE RETURN OF TOTAL INCOME INCLUD ING UNDISCLOSED INCOME FOR THE BLOCK PERIOD, IN RESPECT OF SEARCH INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED UNDER S ECTION 132A ON OR AFTER THE 1 ST DAY OF JANUARY, 1997, AS REQUIRED BY A NOTICE UNDER CLAUSE (A) OF SECTION 158BC, IS FURNISHED AFTER THE EXPIRY OF THE PERIOD SPECIFIED IN SUCH NOTICE, OR IS NOT FURNISHED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT OF THE TAX ON UNDISCLOSED INCOME, DETERMINED UNDER CLAUSE (C) OF SECTION 158BC, FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD CO MMENCING ON THE DAY IMMEDIATELY FOLLOWING THE EXPIRY OF THE TIME SPECIF IED IN THE NOTICE, AND- (A) WHERE THE RETURN IS FURNISHED AFTER THE EXPIRY OF T HE TIME AFORESAID, ENDING ON THE DATE OF FURNISHING THE RETURN; OR (B) WHERE NO RETURN HAS BEEN FURNISHED, ON THE DATE OF COMPLETION OF ASSESSMENT UNDER CLAUSE (C) OF SECTION 158BC. 10. HOWEVER, AS PER CLAUSE A (II) OF S. 158 BC OF T HE ACT, IN RESPECT OF SEARCH INITIATED OR BOOKS OF ACCOUNT OR OTHER DO CUMENTS OR ANY ASSETS REQUISITIONED ON OR AFTER THE 1 ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITH IN SUCH TIME NOT BEING LESS THAN FIFTEEN DAYS BUT NO MORE THAN FORTY FIVE DAYS. THIS PERIOD OF FORTY FIVE DAYS IS THE MAXIMUM PERIOD ALL OWABLE FOR FILING A RETURN AND THERE WAS NO PROVISION IN THE ACT WHICH PROVIDES FOR FILING OF A RETURN IN RESPONSE TO NOTICE U/S 158BC OF THE ACT AFTER A LAPSE OF THE PRESCRIBED DATE WHICH COULD BE CONSIDERED AS A VALID RETURN. 6 11. IN THE CASE SK. MUNEER SK. MANNU CHOUDHARY VS D CIT, [2008] 300 ITR 216 (BOM.) IT WAS HELD THAT EVEN IF THE WORD ASSESSMENT FOR THE PURPOSE OF SECTION 139 MAY INCLUDE WITHIN ITS FOLD INTEREST LEVIED , THE SAME ANALOGY MAY NOT BE APPLICABLE TO THE INTEREST LEVIE D U/S 158 BFA, BECAUSE SUCH LEVY OF INTEREST IS NOT PART AND PARCEL OF AS SESSMENT AS UNDER SECTION 158BC. IN FACT SEPARATE SECTION IS CURVED O UT AS SECTION 158BFA FOR LEVY OF INTEREST AND IMPOSING PENALTY. THE ASSE SSEE WILL BE ABLE TO DENY THE LIABILITY OF INTEREST ON ONLY TWO GROUNDS, THIS IS BECAUSE THE LEVY OF INTEREST IS FOUNDED ON TWO PILLARS. FIRSTLY, THE AS SESSEE HAS UNDISCLOSED INCOME, WHICH IS UNEARTHED BY SEARCH, AND SECONDLY, HE HAS NOT SUBMITTED THE RETURN WITHIN THE TIME PRESCRIBED BY THE NOTICE UNDER SECTION 158BC (A) SERVED UPON THE ASSESSEE AFTER SUCH SEARCH. NAT URALLY, THE ASSESSEE WILL BE ABLE TO DENY THE LIABILITY TOWARDS LEVY OF INTER EST ONLY BY CONTENDING THAT HE HAS NO UNDISCLOSED INCOME OR THAT HE HAS SUBMITT ED THE RETURN WITHIN THE TIME PRESCRIBED BY THE NOTICE. AN APPEAL DOES NOT LIE FROM AN ORDER LEVYING INTER EST UNDER SECTION 158BFA IN VIEW OF THE PROVISIONS OF SECTION 246. FROM THIS ORDER, IT IS APPARENT THAT SECTION 158BFA IS AN EXCLUSIVE PROVIS ION OF THE ACT FOR LEVY OF INTEREST AND PENALTY IN CERTAIN CASES. IT H AS NOTHING TO DO WITH ASSESSMENT PROCEEDINGS UNDER SECTION 158BC. NO OTHE R INFERENCE CAN BE DRAWN UNDER THE PROVISIONS OF SECTION 158BFA OTHER THAN THE ISSUE OF CHARGING OF INTEREST/PENALTY BY VIRTUE OF THE TWO INHERENT PILLARS IMBEDDED IN THE ACT NAMELY THE ASSESSEE H AS UNDISCLOSED INCOME WHICH IS UNEARTHED BY SEARCH AND HE HAS NOT SUBMITTED THE RETURN WITHIN THE TIME PRESCRIBED BY THE NOTICE UND ER SECTION 158BC (A) SERVED UPON THE ASSESSEE AFTER SUCH SEARCH. IN SUCH CIRCUMSTANCES, IT IS A FARFETCHED PROPOSITION TO IN FER FROM THE 7 PROVISIONS OF SECTION 158BFA THAT A BLOCK RETURN WHICH IS FILED PURSUANT TO NOTICE UNDER SECTION 158 BC (A) BEYOND THE TIME LIMIT PRESCRIBED IN THE NOTICE BUT BEFORE COMPLETIO N OF THE ASSESSMENT IS A VALID RETURN, WHEN THE PROVISIONS OF SECTION 158BC STATES OTHERWISE VIS--VIS PROCEDURE FOR BLOCK ASSESSMENT 158BC. WHERE ANY SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED 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 30 TH DAY OF JUNE, 1995, BUT BEFORE THE 1 ST DAY OF JANUARY, 1997, SERVE A NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH 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 THE 1 ST 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 FORTY-FIVE DAYS, AS MAY BE SPECIFIED IN THE NOTICE 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 THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD: 8 PROVIDED THAT NO NOTICE UNDER SECTION 148 IS REQUIRED TO BE ISSUED FOR THE PURPOSE OF PROCEEDING UNDER THIS CHAPTER: PROVIDED FURTHER THAT A PERSON WHO HAS FURNISHED A RETURN UNDER THIS CLAUSE SHALL NOT BE ENTITLED TO FILE A REVISED RETURN:] (B) THE ASSESSING OFFICER SHALL PROCEED TO DETERMIN E THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNE R LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 14 3 [SECTION 144 AND SECTION 145] SHALL, SO FAR AS MAY BE, APPLY. 12. IT IS ALSO PERTINENT TO NOTE A SIMILAR PROVISIO N AS OF SECTION 158BFA VIZ. SECTION 234A IS ENVISAGED IN THE ACT FO R CHARGING OF INTEREST FOR DEFAULT IN FURNISHING RETURN OF INCOME WHICH STATES AS UNDER: INTEREST FOR DEFAULTS IN FURNISHING RETURN OF INCO ME 234A. (1) WHERE THE RETURN OF INCOME FOR ANY ASSESSMENT YEAR UNDER SUB-SECTION (1) OR SUB-SECTIO N (4) OF SECTION 139, OR IN RESPONSE TO A NOTICE UNDE R SUB-SECTION (1) OF SECTION 142, IS FURNISHED AFTER THE DUE DATE, OR IS NOT FURNISHED, THE ASSESSEE SHALL B E LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED I N THE PERIOD COMMENCING ON THE DATE IMMEDIATELY FOLLOWING THE DUE DATE, AND,- (A) WHERE THE RETURN IS FURNISHED AFTER THE DUE DAT E, ENDING ON THE DATE OF FURNISHING OF THE RETURN; OR (B) WHERE NO RETURN HAS BEEN FURNISHED, ENDING ON T HE DATE OF COMPLETION OF THE ASSESSMENT UNDER SECTION 144, 9 THUS, BY VIRTUE OF SECTION 234A, THE ASSESSEE IS BOUND TO PAY INTEREST FOR DEFAULT IN FURNISHING OF THE RETURN. NOWHERE IN THE ACT, IS IT STIPULATED THAT PAYMENT OF INTEREST FOR LATE FILING OF RETURN WILL VALIDATE THE RETURN OF INCOME FILED BEYOND THE STIPULATED DA TE IN THE ACT. SECTION 158BFA IS A SIMILAR PROVISION WHICH LEVY IN TEREST AND PENALTY FOR NOT FURNISHING THE RETURN WITHIN THE DUE DATE P URSUANT TO NOTICE U/S 158BC (A) OF THE ACT. THEREFORE, LEVY OF INTEREST C ANNOT BE IMPLIEDLY MEANT THAT THE RETURN FILED BEYOND THE DUE DATE IS A VALID RETURN IN THE EYE OF LAW. 13. REVERTING BACK TO THE LEGAL VIEW, THE HONBLE J URISDICTIONAL HIGH COURT HAD, ON A REFERENCE APPLICATION OF THE REVENU E IN THE CASE OF PRAKASH METAL WORKS (SUPRA), THE ONLY QUESTION RAIS ED BY THE REVENUE WAS THAT WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN REVERSING THE ORDER PASSED BY THE C IT(APPEALS) AND IN CANCELLING THE ASSESSMENT FOR THE BLOCK PERI OD ON THE GROUND THAT NOTICE U/S 143(2) OF THE ACT WAS NOT SE RVED? THE HONBLE GUJARAT HIGH COURT DISMISSED THE REVENUES APPEAL IN CONFORMITY WITH THE RULING OF THE HONBLE APEX COUR T IN THE CASE OF ACIT & ANR V. HOTEL BLUE MOON (2010) 321 ITR 362 (S C) AND HELD AS UNDER: 2. IT IS COMMON GROUND BETWEEN THE PARTIES AS ACCEPTED BY THE LEARNED COUNSEL APPEARING FOR BOTH THE SIDES THAT THE ISSUE STANDS CONCLUDED BY JUDGMENT OF THE APEX COURT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX AND ANOTHER V/S. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) WHEREIN THE APEX COURT HAS LAID DOWN THAT FOR THE PURPOSE OF FRAMING ASSESSMENT FOR A BLOCK PERIOD NOTICE UNDER SECTION 10 143(2) OF THE INCOME TAX ACT, 1961 IS MANDATORY AND ABSENCE THEREOF CANNOT BE TREATED TO BE A PROCEDURA L LAPSE. 3. IN THE CIRCUMSTANCES, IN ABSENCE OF ANY LEGAL INFIRMITY IN THE APPROACH ADOPTED BY THE TRIBUNAL N O QUESTION OF LAW, WHICH CAN BE TERMED TO BE A SUBSTANTIAL QUESTION OF LAW IN LIGHT OF THE APEX CO URT DECISION, ARISES FROM IMPUGNED ORDER OF TRIBUNAL SO AS TO WARRANT INTERFERENCE. THE APPEAL IS ACCORDING LY DISMISSED. 14. FROM THE ABOVE DECISION, IT IS APPARENT THAT TH E PRIMARY ISSUE WHETHER THE RETURN FILED PURSUANT TO NOTICE U/S 15 8BC (A) OF THE ACT BEYOND THE DUE DATE BUT BEFORE COMPLETION OF TH E ASSESSMENT IS A VALID RETURN BY VIRTUE OF SECTION 1 58BFA OF THE ACT WAS NOT BEFORE THE HONBLE GUJARAT HIGH COURT AND, THEREFORE, THE SAME WAS NOT DISCUSSED OR ANSWERED. 15. IN THE CASE OF ACIT & ANR V. HOTEL BLUE MOON CI TED SUPRA, THE HONBLE APEX COURT HAD RULED THAT CLAUSE (B) OF S.1 58BC ENABLES THE AO TO COMPLETE THE ASSESSMENT BY FOLLOWING THE PROC EDURE LIKE ISSUE OF NOTICE U/S 142/143(2). IT DOES NOT PROVIDE FOR ACCEPTING THE RETURN AS PROVIDED UNDER S. 143 (1)(A). HOWEVER, A NOTICE U/S 143(2) BECAME NECESSARY ONLY WHERE IT IS NECESSARY TO CHEC K THE RETURN. WHERE THE BLOCK RETURN CONFORMS TO THE UNDISCLOSED INCOME INFERRED BY THE AUTHORITIES, THERE IS NO REASON WHY THE AUTH ORITIES SHOULD ISSUE NOTICE U/S 143(2). IF AN ASSESSMENT IS TO BE COMPL ETED U/S 143(3) R.W.S. 158BC, NOTICE U/S 143(2) SHOULD BE ISSUED WI THIN ONE YEAR FROM THE DATE OF FILING OF BLOCK RETURN. OMISSION ON TH E PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U/S 143(2) CANN OT BE A MERE 11 PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE . FURTHER, S. 158BC (B) SPECIFICALLY REFERS TO SOME OF THE PROVIS IONS OF THE ACT WHICH REQUIRED TO BE FOLLOWED BY THE AO WHILE COMPL ETING THE BLOCK ASSESSMENTS UNDER CHAPTER XIV-B. IF THE INTENTION OF THE LEGISLATURE WAS TO EXCLUDE THE PROVISIONS OF CH. XIV, IT WOULD HAVE INDICATED THAT. THEREFORE, IF THE AO, FOR ANY REASON, REPUDIATES TH E RETURN BY THE ASSESSEE IN RESPONSE TO A NOTICE U/S 158BC (A), HE MUST NECESSARILY ISSUE NOTICE U/S 143(2) WITHIN THE TIME PRESCRIBED IN THE PROVISO TO S. 143(2). WHEN S. 158BC (B) SPECIFICALLY REFERS TO A PPLICABILITY OF S. 143(2), ITS PROVISO CANNOT BE EXCLUDED. THERE IS N O REASON TO RESTRICT THE SCOPE AND MEANINGS OF THE EXPRESSION SO FAR AS MAY BE APPLY. 16. AT THIS POINT OF TIME, WE WOULD TO MAKE IT ABUN DANTLY CLEAR THAT THE ONLY QUESTION THAT AROSE FOR THE CONSIDERATION OF THE HONBLE APEX COURT WAS WHETHER SERVICE OF NOTICE ON THE ASSESSEE U/S 143(2 ) WAS A PERQUISITE FOR FRAMING THE BLOCK ASSESSMENT U NDER CH. XIV B OF THE ACT, WHEN RETURN IS FILED WITHIN THE PRES CRIBED PERIOD OF TIME UNDER THE ACT? 17. THE RULING OF THE HONBLE APEX COURT, IN OUR CO NSIDERED VIEW, BASED ONLY ON THE BASIS OF THE RETURN FURNISHED BY THAT ASSESSEE WITHIN FORTY-FIVE DAYS FROM THE DATE OF SERVICE OF A NOTICE U/S 158BC OF THE ACT. HOWEVER, IN THE PRESENT CASE UNDER CONSID ERATION, NO RETURN OF INCOME WAS FURNISHED BY THE ASSESSEE IN CONSEQUE NCE TO THE NOTICE U/S 158BC OF THE ACT WITHIN THE DUE DATE. I N VIEW OF NON- COMPLIANCE OF THE SAID NOTICE WITHIN THE PRESCRIBED TIME FRAME, A SHOW-CAUSE NOTICE WAS ISSUED REQUIRING THE ASSESSEE TO EXPLAIN AS TO 12 WHY PROSECUTION PROCEEDINGS U/S 276CCC OF THE ACT S HOULD NOT BE INITIATED FOR NON-FILING OF THE RETURN. THEREAFTER , A NOTICE U/S 142(1) OF THE ACT WAS SERVED ON THE ASSESSEE INTIMATING THAT NO RETURN WAS FURNISHED BY IT WITHIN THE DUE DATE AND, THUS, IT W AS REQUIRED TO FURNISH VARIOUS DETAILS AND EXPLANATION ETC., 18. THE ABOVE MENTIONED SCENARIO WAS NOT BEFORE THE HONBLE APEX COURT WHILE DECIDING THE ISSUE IN THE CASE OF HOTEL BLUE MOON (SUPRA). WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE CASE LAW RELIED ON BY THE ASSESSEE IS ON A DIFFERENT FOOTING AND QUITE DISTINGUISHABLE AND, THUS, IT CANNOT COME TO ITS RE SCUE IN ANYWAY. 19. INCIDENTALLY, A SIMILAR ISSUE TO THAT OF THE PR ESENT ISSUE HAD CROPPED UP BEFORE THE HONBLE PATNA BENCH OF THE TR IBUNAL IN THE CASE OF CHAND BIHAR AGRAWAL V. ACIT IN IT (SS) A NO .05/PAT/2010 DATED 11.6.2009. 20. AFTER DUE CONSIDERATION OF RIVAL SUBMISSIONS, E XTENSIVELY QUOTING VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING T HAT OF THE RULING OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA), THE HONBLE PATNA BENCH HAD RECORDED ITS FINDINGS AS UNDER: 10. BEFORE WE CONSIDER THE APPLICABILITY OF THE A FORESAID JUDGMENT TO THE CASE OF THE ASSESSEE, IT MAY BE RELEVANT TO MENTION THAT NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE ISSUED TO GIVE AN OPPORTUN ITY TO THE ASSESSEE TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON W HICH THE ASSESSEE MAY RELY IN SUPPORT OF HIS RETURN. THE RETURN CONTEMPL ATED BY SECTION 143(2) IS A RETURN WHICH IS VALID AND FILED IN CONFORMITY WITH LAW AND NOT A RETURN WHICH IS NON-EST IN LAW OR NOT FILED WITHIN THE STATUTORY PERIOD FIXED FOR FILING THE RETURN OR IS NOT OTHERWISE IN CONFORMITY WITH LAW. THUS, SECTION 143(2) WOULD NOT COME INTO OPERATION UNLESS A VALID RETURN IS FILED WITHIN THE STATUTORY PERIOD. 13 11. SECTION 158BC PRESCRIBES THE PROCEDURE FOR BLO CK ASSESSMENT. IN A CASE WHERE SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 O R BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER S ECTION 132A, THE ASSESSING OFFICER IS EMPOWERED TO SERVE A NOTICE ON A PERSON WHO HAS BEEN SUBJECTED TO PROCEEDINGS UNDER SECTION 132/132A REQ UIRING HIM TO FURNISH A BLOCK RETURN WITHIN SUCH TIME NOT BEING LESS THAN 1 5 DAYS BUT NOT MORE THAN 45 DAYS IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER. IT IS QUITE APPARENT FROM THE JUDGMENT OF THE HONBLE SUP REME COURT IN HOTEL BLUE MOON (SUPRA) THAT THE STATUTORY TIME LIMIT FOR FURNISHING THE BLOCK RETURN U/S 158BC IS 45 DAYS. IT IS STATED IN SUTHE RLAND STATUTORY CONSTRUCTION, 3 RD EDITION, VOL. 3, PAGE 107 THAT A STATUTORY DIRECTI ON TO PRIVATE INDIVIDUALS SHOULD GENERALLY BE CONSIDERED AS MANDA TORY AND THAT THE RULE IS JUST THE OPPOSITE TO THAT WHICH OBTAINS WITH RESPEC T TO PUBLIC OFFICERS. BESIDES, IT IS EQUALLY SETTLED THAT WHEN THE LAW RE QUIRES A PARTICULAR THING TO BE DONE IN A PARTICULAR MANNER, IT MUST BE DONE IN THAT MANNER OTHERWISE IT SHOULD BE IGNORED. 12. IN THE CONTEXT OF THE PROVISIONS OF SECTION 13 9, IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN CIT V. S RAMAN CHETTIAR, 5 5 ITR 630 (SC) THAT THE RETURN FILED AFTER LAPSE OF LIMITATION PERIOD M ENTIONED IN SECTION 139(4)(B) WOULD BE NON-EST. AT PAGE 634 OF THE SAI D REPORTS, THE POSITION IS STATED THUS: THEREFORE IT MAY BE IMPLIED, AS LAID DOWN IN S SANTOSHA NADAR V. FIRST INCOME-TAX OFFICER, TUTICORIN AND COMMISSI ONER OF INCOME-TAX V. BHAGWANDAS AMERSEY THAT THE RETURN MUST BE FILED BE FORE THE TIME MENTIONED IN SECTION 34(3). IT THEREFORE FOLLOWS THAT A RETURN FILED AFTER THE EXPIRY OF THE STATUTORY PERIOD WOULD NOT ONLY BE NO T IN CONFORMITY WITH LAW BUT ALSO NON-EST. THIS PRINCIPLE IS ALSO IN CONFOR MITY WITH THE DECISION IN HOTEL BLUE MOON (SUPRA). BOTH THE ASSESSING OFFICE R AND THE ASSESSEE ARE EQUALLY BOUND BY THE TIME LIMITATION PLACED ON THEM BY SECTION 143(2) AND 158BC RESPECTIVELY. THE ASSESSEE CANNOT BE HEARD T O SAY THAT THE AO IS BOUND BY THE TIME PRESCRIPTION OF SECTION 143(2) BU T HE HIMSELF IS NOT BOUND BY THE STATUTORY PERIOD OF LIMITATION AS LAID DOWN IN SECTION 158BC. THE PERIOD OF LIMITATION AS LAID DOWN IN SECTION 143(2) AND 158BC APPLIES TO BOTH OF THEM IN EQUAL MEASURE AND WITH EQUAL FORCE. 13. LET US LOOK AT THE ISSUE FROM ANOTHER ANGLE. IN CASE NO SUCH TIME LIMIT AS PRESCRIBED FOR FILING THE RETURN U/S 158BC IS PL ACE, THE ASSESSEE WOULD BE FREE TO FURNISH RETURN ON THE LAST DAY OF THE LIMIT ATION PERIOD FOR COMPLETION OF ASSESSMENT. IN SUCH A CASE, IT WOULD BE ALMOST IMPOSSIBLE FOR THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 143 (2) S AS TO GIVE REASONABLE OPPORTUNITY TO THE ASSESSEE TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RE LY IN SUPPORT OF RETURN. IN ORDER TO OBVIATE SUCH PROBLEMS AND ABSURDITY, SE CTION 158BC LAYS DOWN TIME LIMIT WITHIN WHICH RETURN MUST BE FURNISHED. THE FACT THAT NO AUTHORITY IS EMPOWERED TO EXTEND THE AFORESAID TIME LIMIT FIX ED U/S 158BC ALSO LENDS 14 CREDENCE TO THE VIEW THAT THE SAID TIME LIMIT IS MA NDATORY AND THEREFORE THE RETURN MUST BE FILED WITHIN THE AFORESAID TIME LIMI T. A BLOCK RETURN FURNISHED AFTER THE EXPIRY OF STATUTORY TIME LIMIT AS LAID DO WN IN SECTION 158BC WOULD NOT BE IN CONFORMITY WITH LAW AND THEREFORE NON-EST . 14. IN TERMS OF THE JUDGMENT IN HOTEL BLUE MOON (S UPRA), NON-ISSUE OF NOTICE AS PER TIME PROVISION OF SECTION 143(2) WOUL D BE FATAL ONLY WHEN THE BLOCK RETURN IS FILED U/S 158BC AND THE AO, IN REPU DIATION OF THE RETURN SO FILED IN TERMS OF SECTION 158BC, PROCEEDS TO MAKE I NQUIRY. IT IS THUS QUITE OBVIOUS FROM THE AFORESAID JUDGMENT THAT THE NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE ISSUED ONLY WHEN BLOCK RETURN IS FUR NISHED IN TERMS OF SECTION 158BC. RETURN NOT FURNISHED WITHIN THE STATUTORY T IME LIMIT OR IN THE MANNER LAID DOWN IN SECTION 158BC CANNOT BE SAID TO BE ONE FURNISHED UNDER SECTION 158BC OF THE ACT. IN ORDER TO ATTRAC T THE APPLICABILITY OF THE SAID JUDGMENT, AN ASSESSEE MUST SHOW THAT HE HAS FI LED A VALID RETURN IN CONFORMITY WITH THE REQUIREMENTS OF SECTION 158BC. 15. IN THE PRESENT CASE, IT IS QUITE APPARENT ON B ARE PERUSAL OF THE DETAILS FURNISHED BY BOTH THE PARTIES THAT THE RETURN WAS N OT FILED WITHIN THE STATUTORY TIME LIMIT LAID DOWN IN SECTION 158BC AND , THEREFORE, THE RETURN FILED BY THE ASSESSEE AFTER THE EXPIRY OF THE SAID TIME LIMIT WOULD NOT ONLY BE NOT IN CONFORMITY WITH LAW BUT ALSO NON-EST IN LAW. IN THIS VIEW OF THE MATTER, THE ASSESSING OFFICER WAS NOT REQUIRED TO ISSUE NOT ICE UNDER SECTION 143(2) ON THE BASIS OF THE AFORESAID RETURN WHICH WAS NON-EST IN LAW 21. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DISCUSSED (SUPRA), WE ARE OF THE FIRM VIEW THAT THE RE IS NO INFIRMITY IN THE FINDINGS RECORDED IN THE ORIGINAL ORDER BY THE EARLIER BENCH IN THE ASSESSEES CASE WHICH REQUIRES NEITHER RECTIFICATIO N NOR MODIFICATION AS SOUGHT FOR. 22. IN THE RESULT , THE MISC. APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27-11-2012 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER 15 LAKSHMIKANTA DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT DICTATION ON AMS COMP UTER 21-11-12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 22-11-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: