TaxTMI 
TaxTMI 
2016 (5) TMI 879
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....the loose sheets pertained to his undisclosed income, and did not retract the statement until about a year later?" 2. The facts leading to the present appeal that may be necessary for an adjudication of the substantial questions of law raised are narrated as under:- (1) The respondent/assessee is an individual carrying on business of Hire Purchase Finance for Automobiles. He is also having an interest as a Partner or Director or Shareholder in certain Concerns/Firms/Companies, about which, we are not now concerned. (2) A search and seizure operation under section 132 was conducted in the premises of the assessee on 7.6.2000, based on a warrant of authorisation issued in the name of the assessee. The search was actually commenced on 7.6.2000 and it concluded on 8.9.2000. (3) During the course of the search, the officers seized certain material and came to the conclusion that the assessee had undisclosed income which he had also invested. (4) Therefore, a notice under section 158BC was served on the assessee on 6.2.2001, calling upon him to file a return of income within a specified time. (5) The assessee filed a return of income for the block period on 27.9.2002 after about on....
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....or our consideration, we must address ourselves to the preliminary issue raised by Mr.R.Sivaraman, learned counsel appearing for the respondent/assessee about the very maintainability of the appeal. According to the learned counsel for the respondent/assessee the appeal filed by the Revenue is not maintainable since the entire order of assessment passed under section 143(3) has no legs to stand in view of the admitted position that no notice under section 143(2) was issued or served. 6. There is no dispute about the fact that a notice under section 143(2) was not issued and that the order of assessment dated 30.9.2002 was one passed under section 143(3). Therefore, heavy reliance is placed by Mr.R.Sivaraman, the learned counsel appearing for the respondent/assessee, upon the decision of the Delhi High Court in COMMISSIONER OF INCOME TAX v. PAWAN GUPTA (318 ITR 322) and ASSISTANT COMMISSIONER OF INCOME TAX v. HOTEL BLUE MOON (321 ITR 362). 7. We have carefully considered the above submissions. 8. For finding an answer to the above contention, it may be necessary to take note of a few dates and some of the provisions of the Act. 9. Admittedly, the search under section 132 commenc....
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....furnished in response to a notice under section 142(1). The proviso to clause (i) of sub-section (2) of section 143, inserted by the Finance Act, 2003, with effect from 1.6.2003, states that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003. Sub-section (2) of section 143 reads as follows:- "(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,-- (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003;" 15. A reading of sub-section (2) of section 143 would reveal that it also applies to a case where a return has been furnished either u....
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....k at the judgment of the Supreme Court in Hotel Blue Moon, it will be clear that the said decision did not deal with a case where the assessee waited for more than a period of 19 months and then chose to file a return at a time when it was impossible to comply with section 143(2). If we have a look at sub section (3) section 143 read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of the block return. In other words, if literal meaning to the dictum of the Supreme Court is applied, the notice under section 143(2) could have been issued on or before 27.9.2003. But, that would go against the prescription contained in section 158BC. Therefore, the decision in Hotel Blue Moon has to be read in the context of a person, who filed the return within the time and the Department had slept over the same. The same would apply to the decision of the Delhi High Court in Pawan Gupta. Hence, the preliminary objection with regard to non-issuance of notice under section 143(2) is rejected. 21. Coming to the two questions of law now before us, it is seen that they revolve around the loose sheets picked up during search. These loose sheets are ....