TaxTMI 
TaxTMI 
2014 (7) TMI 550
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.... basis of alleged discrepancies found during the course of survey action u/s. 133A of the Act at Shewree factory / godown: (b)The same are based on the alleged inventory made at the time of survey, which has not been confronted to the Appellant in spite of numerous reminders (c)The additions do not fall within the purview of block assessment. Particulars Amount (Rs. ) Unexplained investment in raw material 9, 27, 193/- Gross profit on unaccounted sales of Rs. 68, 49, 810/- computed for the alleged shortage and raw material 34, 24, 944/- Excess stock of finished goods 8, 12, 814/- Unaccounted stock of rejected goods 2, 03, 000/- Total 53, 67, 951/- 2. 2. It is submitted that in the facts and the circumstances of the case, and in law, otherwise also, on merits, no such additions were called for. 2. 3Without further prejudice to the above, it is submitted that, in the facts and circumstances of the case, and in law: (i)The computation of the addition is arbitrary, excessive and not in accordance with the law; and (ii)The benefit of telescoping should have been granted to the Appellant. 3. 1The following additions made by the A. O. are bad and illegal, as: (a)The ....
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.... (AR) argued that no notice u/s 143(2) of the Act was issued by the AO while completing the block assessment, that the order made u/s 158BC(c) was bad in law and without jurisdiction, that AO had failed to comply with the mandatory provisions of section 143(2) of the Act. He relied upon the decision of the Hon'ble Gujarat High Court delivered in the case of Bharat G. Patel 43 Taxmann. com 90. Departmental Representative (DR) stated that the AO had issue notice u/s. 142(1)of the Act, that non issuance of notice u/s. 143(2)of the Act was not fatal especially when a notice under section 142 was already issued. He referred to the provisions of section 292BB of the Act. 4. We have heard the rival submissions and perused the material before us. We find that the appeal was filed in the year 1997 and for last so many years it remained pending for some or the other reasons including the evidence of issuance of notice u/s 143(2) by the AO. Therefore, we are deciding the matter on the basis of available material. We find that while passing the order u/s. 158BC, AO had made certain additions to the income of the assessee, that he had not issued any notice u/s 143(2) of the Act. It appears tha....
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....ere allowed in part. Being aggrieved by his order the assessee's as well as the Revenue filed appeals before the Tribunal. Before the Tribunal the assessees submitted that for making assessment under section 158BC it is mandatory to issue and to serve notice under section 143(2) within the specified time. It was submitted that no notice was issued under section 143(2) within the specified time and, therefore, the entire block assessment orders against both assessees were illegal and without jurisdiction and liable to be quashed. Departmental Representative(DR), admitted before the Tribunal, that no notice under section 143(2) had been issued to the assessees. Deciding the matter Tribunal held that the provisions of section 143(2), i. e. , the issue of verification notice for the block assessment under Chapter XIV-B, was applicable. The Tribunal, however, held that the application of the proviso to section 143 (2), providing for a time limit for the service of notice issued thereunder and, thus, also, to its issue, would not be applicable to the block assessment procedure. The Tribunal, accordingly, remanded back the matter to the Assessing Officer to cure the defect. Assessees fil....
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....e the assessment under section 143(2) by following the procedure like issue of notice under section 143(2) /142. This does not provide accepting the return as provided under section 143(1)(a) : the officer has to complete the assessment under section 143(3) only. If an assessment is to be completed under section 143(3) read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of the block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and is not curable. Therefore, the requirement of notice under section 143(2) cannot be dispensed with. " Similarly, in the matter of Pai Vinod (353ITR622)Hon'ble Karnataka High Court had an occasion to consider the issue of notice as per the provisions of section 143(2)of the Act vis a vis block assessment proceedings. Referring to the judgment of the Hon'ble Apex Court in the case of Hotel Blue Moon, Hon'ble court held as under: .... we conclude that even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of section 158BC, the provisions o....
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....cond round of litigation the Tribunal noted that the question of issuance of notice under section 143(2) as prescribed was very much in the knowledge of the Revenue and a remand report was also called for by the FAA. In the absence of any specific information in respect of the issuance of notice under section 143(2)FAA was left with no option but to quash the order in view of the directions of the Tribunal. Department challenged the order of the Tribunal before the Hon'ble High Court and the court dismissed it because notice u/s. 143(2) was not issued within the prescribed time limit. Lastly, we would like to discuss the matter of Bharat G Patel. In that matter Hon'ble Gugarat High Court(43 taxmann. 90)has dealt with the provisions of sections143(2), 158BC and 292BB of the Act. Facts of the case are that the FAA had quashed the assessment order u/s. 158BC holding that in absence of a valid notice u/s. 143(2)within stipulated time the block assessment order itself was invalid. Tribunal upheld the order of the FAA. Dismissing the appeal filed by the department, Honble High Court held as under : "Failure on the part of the Assessing Officer to issue notice within the prescribed time ....