Section 143(2) Notice: Tribunal Rules Irregularity in Block Assessment, Case Remanded for Final Resolution.

The Tribunal determined that Section 143(2) of the Income-tax Act, 1961, applies to block assessment proceedings to the extent practical. Non-issuance of notice under this section constitutes an irregularity, not nullity, and can be remedied. The case was remanded to the regular bench for final resolution on merits.

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Issues Involved:
1. Applicability of Section 143(2) to Block Assessment Proceedings.
2. Effect of Non-Issuance and Non-Service of Notice under Section 143(2).

Summary:

1. Applicability of Section 143(2) to Block Assessment Proceedings:

The primary issue was whether the provisions of sub-section (2) of section 143 of the Income-tax Act, 1961, are applicable to block assessment proceedings. The Tribunal held that the provisions of section 143(2) are applicable to block assessment proceedings but only to the extent possible or practical, not in their entirety. The Tribunal emphasized that the procedural requirements of section 143(2) should be followed unless deviation is justified. The Tribunal relied on the Supreme Court judgment in Dr. Pratap Singh v. Director of Enforcement, which interpreted the phrase "so far as may be" to mean "to the extent possible."

2. Effect of Non-Issuance and Non-Service of Notice under Section 143(2):

The second issue was whether non-issuance and non-service of notice under section 143(2) would render the block assessment order null and void. The Tribunal concluded that non-issuance of notice under section 143(2) would not render the block assessment order null and void but would be considered an irregularity, which is curable. The Tribunal distinguished between nullity and irregularity, stating that non-issuance of notice under section 143(2) is a deviation from the rule of law but does not take away the foundation or authority for the proceeding. The Tribunal cited the Supreme Court judgment in Guduthur Bros. v. ITO, which held that denial of opportunity to the assessee vitiated the order by irregularity, which could be corrected by issuing another notice.

Conclusion:

The Tribunal held that while the procedural requirements of section 143(2) are applicable to block assessment proceedings, non-issuance of such notice does not render the assessment null and void but is an irregularity that can be cured. The matter was remanded to the regular bench for final disposal of the appeal on merit.

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