Jurisdictional defect in block assessment notice under Section 158BC cannot be cured by consent, waiver, or later extension of time.
A notice under Section 158BC that allowed less than the statutory minimum 15 days was held to be jurisdictionally defective and incapable of sustaining the block assessment. Section 292B did not cure the defect because it affected the substance of the notice, and later extension of time could not validate an initially void notice. On annulment of the assessment, the refund objection under Section 240 also failed because the amounts adjusted by the revenue were not shown to be outside refund relief on the facts. A fresh assessment was not warranted, as that would permit a second attempt to cure a jurisdictional failure.
Issues: (i) Whether a notice issued under Section 158BC granting less than the statutory minimum time is invalid and renders the block assessment void; (ii) Whether such defect is cured by Section 292B when additional time is later granted; (iii) Whether, upon annulment of the block assessment, refund consequences under Section 240 apply so as to deny refund of amounts adjusted against tax liability; (iv) Whether the assessee could be denied relief by directing a fresh assessment after treating the notice as invalid.
Issue (i): Whether a notice issued under Section 158BC granting less than the statutory minimum time is invalid and renders the block assessment void.
Analysis: The notice under Chapter XIV-B had to specify a period of not less than 15 days and not more than 45 days for filing the return. A notice granting a period of less than 15 days did not comply with the mandatory requirement and could not confer jurisdiction. The defect went to the root of the proceedings and was not a mere irregularity. Consent or a request for extension could not create jurisdiction where the statute had not been obeyed.
Conclusion: The notice was invalid and the assessment founded on it was without jurisdiction, in favour of the assessee.
Issue (ii): Whether such defect is cured by Section 292B when additional time is later granted.
Analysis: Section 292B cures only mistakes, defects, or omissions that do not affect the substance and effect of the notice as required by the Act. A notice that itself violates the minimum statutory period under Section 158BC is not in conformity with the intent and purpose of the provision. Grant of extra time later could not validate an initially void notice.
Conclusion: Section 292B did not save the defective notice, in favour of the assessee.
Issue (iii): Whether, upon annulment of the block assessment, refund consequences under Section 240 apply so as to deny refund of amounts adjusted against tax liability.
Analysis: Refund under Section 240 was considered in the context of annulment of the assessment. The amounts relied upon by the revenue were not voluntary tax payments for the block return, but adjustments made from other sources. The proviso invoked by the revenue did not apply on the facts, and the denial of refund was not sustainable.
Conclusion: The assessee was entitled to refund relief, in favour of the assessee.
Issue (iv): Whether the assessee could be denied relief by directing a fresh assessment after treating the notice as invalid.
Analysis: Once the statutory notice was found to be invalid, a remand for a fresh assessment would amount to giving the revenue a second opportunity to cure a jurisdictional failure. Mandatory statutory compliance could not be relaxed by ordering a fresh round of assessment.
Conclusion: No direction for fresh assessment was warranted, in favour of the assessee.
Final Conclusion: The block assessment failed for want of a valid jurisdictional notice, the curative provision did not apply, the refund objection was rejected, and the revenue's appeals failed.
Ratio Decidendi: In block assessment proceedings, strict compliance with the statutory minimum time in the notice is jurisdictional, and a notice that fails that requirement is void and cannot be validated by consent, waiver, or Section 292B.
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