TaxTMI 
TaxTMI 
2010 (1) TMI 800
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....eturn for scrutiny. We, therefore, consider fit to decide the Cross Objection first as the basic legal issues are arising. 2. In the Cross Objection, the assessee has taken the following effective Grounds:- 1. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the proceedings u/s. 158BD of the Act are invalid and void ab initio. 2. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the notices issued by the Assessing Officer during the proceedings are invalid and illegal. 3. The learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that no surcharge can be levied in block assessment in the appellant's case. 3. Before proceeding to decide the issues arising from the Cross Objection, it is necessary to put on record some facts pertaining to this case. The Revenue's appeal as well as the Cross Objection were disposed of by the Tribunal vide common order dt. 25.9.2008. Subsequently, the assessee moved the Miscellaneous Application pleading that the said order may be recalled as there were mis....
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....urisdictional High Court in the case of CIT v/s. Mrs. Mudra G. Nanavati, 227 CTR 387 (Bom). The Ld Counsel also filed the copy of the judgment which is placed on record. It is also argued that the consistent view has been taken by the different co-ordinate benches including the decision of ITAT in the case of Zeus Air Services Pvt. Ltd., v/s. ACIT - ITA No. 660 and 753/Mum/2003 dt. 13.10.2008 (to which one of us i.e. Judicial Member, is a party). In a detailed decision rendered by the Tribunal, it has been held that non-issue of the notice u/s. 143(2) will vitiate the assessment proceedings. It is also argued in that case that the Tribunal has followed the decision of the another Co-ordinate Bench in the case of Mrs. Mudra G. Nanavati v/s. DCIT, (ITA No. 80/Mum/2004 dt. 23.5.2008 and the said decision has been affirmed by the Hon'ble High Court of Bombay. He, therefore, pleaded that the assessment framed by the A.O. u/s. 158 BD may be quashed. 5. Per contra, the Ld D.R. vehemently submitted that the issue of notice u/s. 143(2) is a part of procedural law. He also made the following written submissions:- 5.1 Chapter XIVB consists of section 158BA to 158BH was ins....
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....ocedures as illustrated by the appellant i.e. issue of notice u/s. 143(2) within a period of one year is a part and parcel of the proviso to section 143(2). It is a settled principle of statutory interpretation that proviso is added to an enactment to qualify or create an exception to what is in the enactment and ordinarily a proviso is not interpreted as stating a general rule (Shah Bhojraj Kuvarjii Oil Mills and Ginning Factory vs. Subhash Chandra Yogiraj AIR 1961 SC 596 Pg. 1690). It is also an equally settled proposition of law that the proper functioning of proviso is that it qualifies the generality of an enactment by providing an exception and picking out as it were, from the main enactment, a portion which what for the proviso would fall within the main enactment. This proviso does not refer to a return of income filed in response to notices u/s. 158BC, but only impliedly make reference to return filed u/s. 139 or in response to notice under subsection (1) of section 142. Therefore the proviso cannot be strictly construed as applicable to the return of income filed u/s. 158BC. 5.5 Non-issue of notice u/s. 143(2) while completing block assessment is only an irregul....
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....58BC. (i) The decision of Hon'ble SC in the case of Dr. Pratap Singh reported in 155 ITR 166 SC was not considered by the Hon'ble HC of Guwhati which clearly define and interpret the meaning of the word 'so far as may be' to construe it to mean 'to the extent possible'. It is because of this the Hon'ble Gauhati HC construe that the issue in notice u/s. 143(2) is mandatory and not directory. The Special Bench of ITAT at Lucknow had the occasion of discussing the law laid down by the SC in this regard and after fully appreciating the facts, they came to a right conclusion. The decision of the Hon'ble Guwhati HC has rendered itself as per incurrium as it has not followed the law laid down by the Hon'ble Supreme Court .The Hon'ble Supreme Court in the case of S. Shanmugavil Nadar(supra) has observed that article 141 of the Constitution of India speaks of declaration of law by the Supreme Court. The law so declared by the Supreme Court is binding on all Courts within the territory of India. The doctrine of precedents i.e. being bound by the previous decisions is limited to the decision itself and not as to what is involved in it. By not following the decision of Hon'ble Suprem....
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....eri Stock Brokers P. Ltd. reported in 291 ITR 500 (SC) held that:- "Taxing income escaping assessment in the case of an intimation u/s. 143(1)(a) is covered by the main provision of section 147 as substituted w.e.f. April 1, 1989, and initiating reassessment proceedings in the case of intimation would be covered by the main provision of section 147 and not the proviso thereto. Only one condition has to be satisfied. Failure to take steps u/s. 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings when intimation u/s. 143(1) has been issued." 0.9 Thus, it may be seen that the decision of Madras High Court and Punjab and Haryana High Court in the cases of C.I.T. vs. M. Chellappan 281 ITR 444 and Vipan Khanna vs. C.I.T. 255 ITR 220 followed by the Hon'ble Gauhati High Court in the case of Bandana Gogoi vs. C.I.T. and Another 289 ITR 28 are contrary to the decision of the Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers P. Ltd. 291 ITR 500. Thus, in view of the Hon'ble Supreme Court decision in the above mentioned case, the ratio of the decisions in the case of C.I.T. vs. M. Chellappan and Vipan Khanna v....
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.... handmaid, not the mistress, of legal justice compels consideration of vesting a residuary power in judges to act ex debito justitiae where the tragic sequel otherwise would be wholly inequitable. Justice is the goal of jurisprudence, procedural, as much as substantive. No person has vested right in any course of procedure. He has only the right to prosecution or defense in the manner for the time being by or for the court in which the case is pending, and if, by an act of Parliament the mode of procedure is altered, he has no the right than to proceed accordingly to the altered mode. It procedure law should not ordinarily be construed as mandatory, the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. The procedural or is not to be a tyrant but a servant, not an obstruction but an aid to justice. It procedural prescription is the handmaid and not the mistress, a lubricant, not a resistant to the administration of justice." 5.10 It is therefore, prayed that the assessment should not be held as null and void on the fact of non issuance of notice under sec....