I.T.A. No. 68/Bang/08, Co No. 104/Bang/08 [Block Assessment Years 1990-91 To 2000-01]. Case: The Asst. Commissioner of Income Tax Vs Sri Dilip Kumar Balar. ITAT (Income Tax Appellate Tribunal)
| Case Number | I.T.A. No. 68/Bang/08, Co No. 104/Bang/08 [Block Assessment Years 1990-91 To 2000-01] |
| Counsel | For Appellant: Smt. Jacinta Zimik Vashai and For Respondent: G.B. Patil |
| Judges | N.L. KALRA, A.M. GEORGE GEORGE K., J.M. |
| Issue | Income-tax Act, 1961 - Section 158BD, 292B |
| Citation | 2011 (8) ITR 229 (Trib) (Bang) |
| Judgement Date | August 28, 2009 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
N.L. Kalra, Accountant Member, (In the ITAT 'A' Bench)
1. The revenue has filed an appeal against the order of learned CIT(A)-V, Bangalore dated 13th June, 2008.
2. The grounds of appeal raised by the revenue are as under:
i) The learned CIT(A)-V has erred in quashing the assessment order passed Under Section 143(3) r.w.s. 158BC and BD on the ground that no notice Under Section 158BD were issued by the AO even though the order sheet of the block asst. year 199091 to 26.4.2001 has begun with the notings of the AO recording the reasons for issuing the notice Under Section 158BC r.w.s. BD and accordingly, the notice dated 7.8.2000 has been issued to the assessee. The contention of the learned CIT(A)-V is not correct with regard to non-issue of notice Under Section 158BC r.w.s. BD.
ii) The learned CIT(A)-V has erred in holding that the AO has no jurisdiction to complete the assessment and the assessment made by the AO is illegal in the absence of valid notice Under Section 158, though there was no ground from the assessee on the jurisdiction of the AO. Much force has been given by the learned CIT(A)-V on this issue.
iii) The learned CIT(A)-V has erred in not appreciating the fact that this case was notified to DCIT, Central Circle-2(1), Bangalore along with the rest of the group of cases (Bhansali Group). Vide notification F.No.CC-1/ITO (Tech)-I/14/01-02 dated 6.10.2001 and accordingly, the assessment was completed by the DCIT, Central Cirde-2(1), Bangalore.
3. The Assessing Officer in his order has mentioned that a search was conducted during April, 2000 in the case of Lalchand Balar and Arun Kumar BansalK Mr. Lalchand Balar is the father of the assessee. Several" "incriminating documents evidencing undisclosed income in the case of assessee were seized. As there was a clear case made out of undisclosed income in the hands of the assessee, a notice Under Section 158BD was issued. In response to that notice, the assessee filed a belated return declaring undisclosed income of (-) 8,01,131/- for the block period. The return so filed was taken up for scrutiny by a notice Under Section 143(2) dated 27th February, 2001. Assessment was completed on total undisclosed income of Rs. 52,18,030/- vide order dated 30th August, 2002.
3.1 The assessee filed an appeal before the learned CIT(A). The learned CITfA) has reproduced the grounds of appeal taken by the assessee in para 3 of his order. In para 5.2 of the order, the learned CIT(A) has mentioned that his predecessor required the Additional CIT, Range to produce the assessment records to ascertain the additional ground of appeal relating to the issue of valid notice Under Section 158BD of the Act. The learned CIT(A) further required the AO to submit the remand report. The remand report was submitted vide letter dated 20th September, 2004. The assessee filed a rejoinder to AO's remand report. The contention in the rejoinder has been summarized by the learned CIT(A) in para 5.3 of his order. The learned CIT(A) has reproducing his finding in para 6 of his order. The findings are summarized as under:
1) There was no-sear-oh warrant and no panchanama in the name of the assessee.
2) The search was in the name of Shri Lalchand on 26th April, 2000.
3) No notice Under Section 158BD was issued in the name of the assessee.
4) The only noticed issued was Under Section 158BC.
5) Assessment has been completed on 30th August, 2002 for the block period as if the search is conducted on the assessee himself on that date though there is no warrant or Panchanama in the name of the assessee.
6) The assessee already filed his return of income before the ITO, Ward-6(4) for the asst. years 1996-97 to 2000-01. Such returns were filed on 8th May, 2000 i.e. three months prior to the issue of notice Under Section 158BC.
7) Issue of notice is a sine qua non for the initiation of any proceedings under the Income Tax Act. Proceedings initiated against the assessee without notice to him will be void and will not be sustainable in law. (Banarsi Das v. CIT 4 ITR 217 (Lah.).
8) When the assessee pleads that he has not been properly served with any notice it was for the department to place the relevant material to substantiate their plea that the assessee was served with proper notice. Reliance has been placed on the decision reported at 242 ITR 141 (Mad.).
9) If an invalid notice is served then proceedings taken by the AO in pursuance of such invalid notice are invalid and inoperative. 35 ITR 388 (53.
10)Procedural defects will always invalidate a notice is not correct. For this reliance has been placed on the decision reported at 347 ITR 975.
11) If notice for reassessment is invalid for any reason then the entire proceedings will become void for want of jurisdiction. Reliance has been placed on the following decisions reported at 27 ITR 54 (Bom.): 68 ITR 407 (Guj.).
12) Reliance was placed on the decision of the Delhi Tribunal in the case of Rakesh Kumar Jain v. ACIT 89 TTJ 203 in which it was held that non issue of notice Under Section 158BD is not mere irregularity but illegality and the result is that the assessment is to be quashed.
13) A jurisdictional provision is mandatory and enacted in the public interest and there cannot be no waiver in respect of jurisdiction. Search is a pre-condition for the initiation of block assessment.
14) Reliance has been placed on the decision of the Karnataka High Court in the case of Nenmal Shankarlal Parmer 195 ITR 582 wherein it was held that when there is no reference in the warrant of authorization then documents or money or bullion etc. in the possession of the petitioner in his individual capacity cannot be seized. Search Is person specific and not premises specific.
15) Delhi Tribunal in the case of Dhiraj Suri v. Addl. CIT 99 TTJ 525 held that block assessment in the name of assessee's wife is void ab-initio because search warrant was in the name of the husband of the assessee.
16) The Bangalore Bench in the case of Y. Subbaraj v. ACIT 85 TTJ 670 held that satisfaction Under Section 158BD is to be recorded in case proceedings are required to be, initiated Under Section 158BD.
The learned CIT(A) therefore held that the ossessmeni is without jurisdiction and therefore ab-initio void. The learned CIT(A) finally held as under:
In view of the above cited case laws and on the facts of the case it is seen from the assessment records that when no notice Under Section 158BD were issued by the AO to the appellant, the AO has no jurisdiction to complete the assessment The assessment made by the AO is illegal in the absence of valid notice Under Section 158BD. I, therefore, quashed the assessment order passed Under Section 143(3) rw Section 158BC rw Section 158BD accordingly.
3.2 During the course of proceedings before us, the learned DR has filed a paper book...
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