TaxTMI 
TaxTMI 
2014 (9) TMI 609
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.... course of proceedings admitted undisclosed income of Rs. 29,92,000/- and filed the return declaring the income as under : Asst. Year Total Income including undisclosed income computed u/s.158BB Returned/Assessed as on the date of search Total Income Source Amount Total Income Source Amount 1987-88 25510 25510 1988-89 25000 25000 1989-90 35606 35606 1990-91 26039 26039 1991-92 43500 43500 1992-93 43182 43182 1993-94 286620 86620 1994-95 579450 79450 1995-96 600000 ROI not filed 1996-97 6000000 ROI not filed 1.4.96 to 13.11.19 96 1106970 14970 Total 33,71,877 3,79,877 Total undisclosed income for the period = [ { (A) - (C) } + {(D)-(b) } ] = Rs. 29,92,000/- 2.1. The original block assessment was completed by the then ACIT, Ci....
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....itted that the AO issued notice u/s.158BC on 27-08-97 directing the assessee to file the return for block period within 15 days whereas the requirement u/s.158BC is the notice requiring the assessee to furnish the block return within such time not being less than 15 days but not more than 45 days. Thus, the Ld. AR of the assessee has submitted that the notice issued u/s.158BC is invalid as the AO has not given the minimum period of time for filing the return of income. Consequently, the AO has no jurisdiction to proceed with the assessment proceedings u/s.158BC. In support of his contention, he has referred the Circular No.717 dated 14.08.1995 and submitted that the CBDT has made it clear that the AO shall serve a notice on such person requiring him to furnish a return within such period not less than 15 days. The Ld. AR further contended that the notice u/s.158BC is foundation for initiating the proceedings and if the notice is invalid then the assessment itself is bad in law. He has relied upon the decision of Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon 321 ITR 362 and submitted that the Hon'ble Supreme Court has dealt with an identical issue and held that the n....
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....rther submitted that even if there is a defect in the notice the same is curable defect which has been cured when the return of income filed by the assessee beyond the period of limitation was processed by the AO. The Ld. AR relied upon the decision of Hon'ble Bombay High Court in the case of Shirish Madhukar Dalvi vs. ACIT 287 ITR 242 and submitted that the Hon'ble High Court has held that the A.O. did not give 15 days clear notice, however, it did not cause any prejudice to the assessee as the assessee was served with another notice. The Ld. DR has further submitted assessee duly participated in the assessment proceedings, then as per the provisions of sec.292B the assessee is not permitted to raise such objection subsequently. He has further submitted that the time period mentioned within 15 days means and includes 15th day. He has also relied upon the decision of Special Bench of this Tribunal in case of CIT vs. Niranjan Lal Verma 180 Taxman 74. In rebuttal, the Ld. AR of the assessee submitted that the decision of Hon'ble Bombay High Court in the case of Shirish Madhukar Dalvi (supra) is not applicable in the facts of the present case as there was a second notice in the said c....
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....717 in Para 39.3(e) as under: "(e) Procedure for making block assessment: The Assessing Officer shall serve a notice on such person requiring him to furnish within such time, not being less than 15 days, as may be specified in the notice, a return in the prescribed form and verified in the same manner as a return under clause (i) of subsection (1) of section 142 setting forth his total income including undisclosed income for the block period. The officer shall proceed to determine the undisclosed income of the block period and provisions of section 142, sub-sections (2) and (3) of section 143 and section 144 shall apply accordingly. The Assessing Officer shall not be required to issue any notice under section 148 for the purpose of proceedings under this chapter. Though the block period can be extended upto 10 years in the case where the assessee has not disclosed undisclosed income in anyone or more of the previous years in the block periods and the Assessing Officer also does not find any material indicating undisclosed income in any one or more of the previous years comprised in the block period, it will not be necessary to do the exercise of computing the un....
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....er Section 132A, it is only then, the Assessing Officer shall proceed to assess the undisclosed income. Therefore, Section 158 BA provides for jurisdiction to the Assessing Officer to assess the undisclosed income in accordance with Chapter XIV-B. Section 158 BA(2) is a charging section, 158BB provides for computation of undisclosed income for the block period and 158 BC provides for procedure for block assessment. Therefore, a notice under Section 158 BC provides for a procedure to be adopted for block assessment. Under this procedure envisaged, the Assessing Officer shall serve a notice requiring the assessee to furnish his return within such time not being less than 15 days but not more than 45 days as specified in the notice. Therefore, the time to be granted to the assessee in terms of Section 158 BC is a minimum of 15 days and a maximum of 45 days. If the said period of time is not granted, the notice is invalid rendering the entire proceedings as without jurisdiction. Admittedly in this case, the notice under Section 158BC calls upon the assessee to submit its return of income "within a period of 15 days". Within a period of 15 days is less than 15 days. Therefore, the manda....
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....account of alleged defective notice dt. 6th July, 1998. He made a positive statement - no specific prejudice was suffered by the appellant. At any rate, the notice dt. 6th July, 1998 suffered from only technical defects, if any, and, in our opinion, it was protected under the umbrella of s. 292B of the Act." 11. It is clear from the facts of the said case that when the subsequent notice was issued then the alleged defective notice did not cause any prejudice to the assessee. Therefore, the said decision is not applicable in the facts of the present case where the only notice issued u/s.158BC was contrary to the provisions of sec.158BC. 12. As regards the Special Bench decision in case of Navin Verma vs. ACIT 100 ITD 73, the said decision has been considered by the Hon'ble Punjab & Haryana High Court in the case of Niranjan Lal Verma (supra) wherein the Counsel for the assessee gave up the objection raised before the Tribunal regarding invalidity of the notice issued u/s.158BD. Therefore, no finding has been given by Hon'ble Punjab & Haryana High Court on the issue of validity of notice. 13. Learned D.R. relied on the decision of CIT vs. Naveen Varma 346 ITR 100 P & H High Court ....