2008 (3) TMI 400 - AT - Income Tax

Tribunal Cancels Assessment Order Due to Late Notice, Upholds Validity of Returns Filed Beyond Prescribed Period.

The Tribunal ruled in favor of the assessee, canceling the block assessment order. It held that a return filed beyond the prescribed period under section ... Validity of block assessment u/s 158BC - Search and seizure operation u/s 132 - Notice allowing 45 days time to file the block return - Notice u/s 143(2) not provided to assessee - whether the return for the block period filed beyond the time allowed under notice is valid or not - HELD THAT:- We find that the Revenue has not controverted contention of the assessee and has brought no material before us to show that any notice u/s 143(2) was in fact served upon the assessee. Thus, in our considered view in the instant case the impugned order of block assessment was passed without issuance of any notice under s. 143(2) of the Act. We find that the legislature vide provisions of s. 158BFA has envisaged the situation where the assessee can file valid block return beyond the time prescribed in the relevant notice. It is an established rule of interpretation that one should not interpret a provision in such a manner so as to make what has been enacted in other provisions of the Act as redundant. The legislature does not enact anything in the statute without any meaning or purpose Thus, In our considered opinion a block return which is filed beyond the time-limit prescribed in the notice but before completion of the assessment is a valid return and the same cannot be ignored by the AO. We find that the AO has duly taken into consideration the block return filed by the assessee. He has duly taken into consideration the income and the other facts disclosed by the assessee in the block return. From the assessment order it is not revealed that the AO has treated the return filed by the assessee as invalid or non est. Thus, we find no force in the arguments of the ld DR that in the instant case no valid return was filed by the assessee. In the above situation, the issue is squarely covered by the decision in the case of Smt Bandana Gogoi v. CIT [2007 (1) TMI 110 - GAUHATI HIGH COURT] held that a return filed for the block period cannot be interfered by the AO without issuance of notice under s. 143(2) of the Act. Hence, respectfully following the same we have no hesitation in cancelling the impugned order of block assessment. We order accordingly. This ground of appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed and that of the Revenue is dismissed. Issues:1. Validity of return filed under section 158BC of the Income Tax Act, 1961.2. Requirement of notice under section 143(2) of the Act for completion of assessment under section 158BC.Issue 1: The case involved cross-appeals by the assessee and Revenue against the order of the CIT(A) regarding the validity of the return filed under section 158BC of the Income Tax Act. The CIT(A) held that the return filed by the appellant was non est and invalid as it was filed beyond the statutory period of 45 days provided in section 158BC. The appellant argued that a notice under section 143(2) of the Act should have been issued by the Assessing Officer (AO) before completing the assessment under section 158BC. The CIT(A) based the decision on the timeline of events related to the search conducted, the issuance of notices, and the filing of the return. The CIT(A) concluded that the return filed beyond the prescribed period cannot be considered valid under section 158BC, and hence, there was no requirement to issue a notice under section 143(2) of the Act. The appellant contended that the return should be considered valid, citing relevant case laws. The Tribunal analyzed the facts, legislative provisions, and case laws to determine the validity of the return. The Tribunal held that a return filed beyond the time allowed under the notice can still be considered valid under section 158BFA, and the AO must consider such returns for assessment. The Tribunal referred to the decision of the Gauhati High Court and canceled the block assessment order, ruling in favor of the assessee.Issue 2: The second issue revolved around the necessity of issuing a notice under section 143(2) of the Act for completing the assessment under section 158BC. The Departmental Representative supported the CIT(A)'s decision, emphasizing that the non-issuance of notice under section 143(2) was not fatal to the assessment process. The Tribunal examined the procedural requirements and the jurisdiction of the AO derived from a search operation under section 132. The Tribunal noted that no notice under section 143(2) was served on the assessee before finalizing the block assessment order. The Tribunal held that the absence of such notice rendered the assessment order invalid. Additionally, the Tribunal highlighted the importance of considering returns filed beyond the prescribed period as valid under section 158BFA. The Tribunal referred to relevant case laws and legislative provisions to support its decision. Consequently, the Tribunal canceled the block assessment order, ruling in favor of the assessee. The other grounds of appeal by both parties became academic in light of the Tribunal's decision.In conclusion, the Tribunal allowed the appeal of the assessee and dismissed the appeal of the Revenue, emphasizing the validity of the return filed under section 158BC and the necessity of issuing a notice under section 143(2) for completing the assessment process.