Mandatory section 143(2) notice in block assessment proceedings was required on time, invalidating the assessment for delay.

The block assessment was held unsustainable because notice under section 143(2) was not issued within the prescribed time in proceedings under sections 158BD and 158BC. The tribunal treated the service of a timely section 143(2) notice as mandatory by incorporation into block assessment procedure, and held that the delay went to the root of jurisdiction rather than amounting to a curable irregularity. It also held that the assessee could raise this pure question of law under Rule 27, as it directly affected the validity of the assessment. The revenue's appeal was dismissed and the assessment in favour of the assessee was sustained.

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Issues: Whether the block assessment was invalid for failure to serve notice under section 143(2) within the prescribed time in proceedings initiated under sections 158BD and 158BC; and whether the assessee could raise this legal challenge under Rule 27.

Analysis: The assessee was permitted to raise the challenge under Rule 27 as a pure question of law going to the validity of the assessment proceedings. In a block assessment, the provisions of section 143(2) apply by incorporation through section 158BC, and the notice must be issued within the statutory time limit. The record showed that the return in response to section 158BD was filed on 24.07.2005, but the notice under section 143(2) was issued only on 30.03.2007, well beyond the permissible period. This failure was not a curable irregularity and went to the root of the assessment.

Conclusion: The assessment was vitiated for want of a timely notice under section 143(2), and the challenge under Rule 27 was rightly entertained. The appeal was therefore rejected on merits and the order in favour of the assessee was sustained.

Final Conclusion: Non-compliance with the mandatory notice requirement rendered the block assessment unsustainable, resulting in dismissal of the revenue's appeal.

Ratio Decidendi: In block assessment proceedings, service of notice under section 143(2) within the prescribed period is mandatory, and failure to comply with that requirement invalidates the assessment.

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