Mandatory notice period for block assessment is jurisdictional; invalid notice cannot be cured and refund may follow on annulment.

A notice under section 158BC that allowed less than the mandatory minimum time was void ab initio, because the statutory time limit is a jurisdictional precondition for block assessment; the assessment based on such notice was therefore annulled. The defect could not be cured by section 292B, since a notice that fails to comply with the minimum period is not a mere irregularity, and later grant of further time or waiver by the assessee did not validate it. On annulment, section 240 governed refund consequences, and it did not bar refund in the facts stated. No direction for fresh assessment was warranted because the statutory mandate had been breached.

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Issues: (i) Whether a notice under section 158BC granting less than the statutory minimum time was invalid and the block assessment stood annulled; (ii) whether such defect could be cured by section 292B or by subsequent grant of further time; (iii) whether section 240 applied to refund consequences in block assessment proceedings where the assessment was annulled; (iv) whether the assessee was entitled to a direction for fresh assessment after annulment for want of valid notice.

Issue (i): Whether a notice under section 158BC granting less than the statutory minimum time was invalid and the block assessment stood annulled.

Analysis: The statutory scheme of Chapter XIV-B required a notice under section 158BC to call for a return within not less than 15 days and not more than 45 days. A notice fixing a period of 15 days was held to be less than the mandatory minimum and therefore contrary to the statutory mandate. The defect went to the root of jurisdiction. Waiver or a request for extension by the assessee did not validate a notice that was void ab initio.

Conclusion: The notice was invalid and the assessment based on it stood annulled.

Issue (ii): Whether such defect could be cured by section 292B or by subsequent grant of further time.

Analysis: Section 292B protects proceedings from mere mistakes, defects, or omissions only when they are in substance and effect in conformity with the Act. Grant of further time beyond the statutory range could not cure the original illegality because the notice itself had failed to comply with the minimum period prescribed by section 158BC. A procedurally defective notice that defeated the statutory intent could not be saved by section 292B.

Conclusion: The defect was not curable under section 292B and the invalidity remained.

Issue (iii): Whether section 240 applied to refund consequences in block assessment proceedings where the assessment was annulled.

Analysis: On annulment of assessment, refund follows only to the extent permitted by section 240. In the facts, the tax collected arose by adjustment and not by voluntary payment on the returned block income. The proviso to section 240 was therefore inapplicable. The block assessment context did not alter the entitlement to refund where no lawful assessment survived.

Conclusion: Section 240 did not bar the refund claimed by the assessee.

Issue (iv): Whether the assessee was entitled to a direction for fresh assessment after annulment for want of valid notice.

Analysis: Compliance with the minimum time requirement under section 158BC was mandatory. Once the statutory mandate was breached, the Revenue could not be given a second opportunity to reinitiate the same proceedings through remand. A fresh assessment direction would undermine the compulsory nature of the statutory time limit.

Conclusion: No direction for fresh assessment was warranted.

Final Conclusion: The appeals failed because the foundational notice for block assessment was jurisdictionally defective, the defect was not cured by later conduct or section 292B, and the refund consequence was governed by section 240 in favour of the assessee.

Ratio Decidendi: A notice that does not satisfy the mandatory statutory precondition for initiating block assessment is void ab initio, and such a jurisdictional defect cannot be cured by waiver, consent, or section 292B.

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