TaxTMI 
TaxTMI 
2017 (3) TMI 1523
X X X X Extracts X X X X
X X X X Extracts X X X X
....al was justified in sustaining all the additions as made by the Assessing Officer while framing the assessment U/s 158 BC/143(3) of the Income Tax Act, 1961, who employed its own method for working out the undisclosed income U/s 158 BB, in search cases for the Block Period, as provided Under Chapter XIV B of the Act and ignoring the mandatory provisions of Section 158 BC (b) and Section 158BB of the Act and method employed by the appellant assessee i.e. investment and expenditure theory without assigning any reason, such order passed by the Assessing Officer dated 28.01.2000 can be said to be correct in law? 3. Whether, the Tribunal was justified in sustaining the addition of Rs. 2,20,682/- Rs. 22,28,264/- & Rs. 14,70,540/- towards undisclosed income as made by the Assessing Officer based on the seized documents (Annexure-B-35 Page-58, Annexure-B-35 Page-9 & Annexure-B-35 Page No. 11 to 25 respectively) merely on the basis of entries mentioned therein treating them as conclusive proof without any corroborative evidence, such conclusion is legally sustainable? 4. Whether, the Tribunal was justified in sustaining the addition of Rs. 37,800/- and Rs. 19,38,737/- towa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itting the appeal on 04.12.2009 had framed the following substantial questions of law: "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining validity of notice dated 10.12.1998 under section 158BC of the Act, and assessment order passed by the Assessing Officer dated 28.01.2000 irrespective of the fact that a notice under Section 158BC of the Act, does not fulfill requirement of the law, wherein time granted by the Assessing Officer was within 15 days for filing of the return from the service of the notice and not allowed minimum 15 days time as required by the law? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in sustaining an addition of Rs. 55915/- made by the Assessing Officer on account of unexplained cash found during the course of search to the income of the appellant in the block assessment, irrespective of the fact that the appellant has already disclosed undisclosed debtors of Rs. 625000/- and cash found is out of realization from the debtors?" 3. Counsel for the appellant has contended that the issues are squarely covered by the decision of this Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case of Hukumchand Mills Ltd. v. State of Madhya Pradesh (1964) 52 ITR 583 (SC); AIR 1964 SC 1329, the apex court has ruled that mere mistake in the opening part of the notification in reciting the wrong source of power does not affect the validity of the amendments made. In the case of State Bank of Patiala v. S.K. Sharma (1996) 3 SCC 364, the apex court ruled that in the case of a procedural provision which is not of a mandatory character, the complaint of violation has to be examined from the standpoint of substantial compliance. The order passed in violation of such provision can be set aside only where such violation has occasioned prejudice to the subject. It further went on to observe that even a mandatory requirement can be waived by the person concerned, if such mandatory provision of law is conceived in his interest and not in the public interest. The conduct of the subject must be borne in mind while examining a complaint of non-observance of procedural rules governing such enquiries. As a rule, all such procedural rules are designed to afford a full and proper opportunity to the subject to defend himself. In the case of Dove Investments P. Ltd. v. G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etter produces manifest injustice, for frequently equitable and humane considerations, and other considerations of a closely related nature, would seem to be of a sufficient calibre to execute or justify a technical violation of the law.' "In the case of Balchand v. ITO (1969) 72 ITR 197, the apex court ruled that merely because of a defect in service of notice, the assessment order does not become invalid. Similarly, the apex court in the case of Jai Prakash Singh (1996) 219 ITR 737 went on to hold that non-service of notice under section 143(2) of the Incometax Act, 1961 to 9 out of 10 representatives of the deceased did not invalidate the order of the Assessing Officer relating to the assessment year in question. "2. Venad Properties Private Limited v. Commissioner of Income-tax (2012) 340 ITR 463 (Delhi), particularly, paragraph Nos. 11, 12 and 18 which are reproduced as under: "11. In Sardar Amarjit Singh Kalra v. Smt. Pramod Gupta (2003) 3 SCC 272, a Constitution Bench of the Supreme Court has held: `26. Laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the person concerned to defend himself." 3. Commissioner of Income-tax v. Jagat Novel Exhibitors P. Ltd. (2013) 356 ITR 559 where at paragraph Nos. 41 and 45, it was observed as follows: "41. The aforesaid observations are significant. In the present case, the Tribunal has not held that the jurisdictional preconditions were missing or not satisfied. Reasons to believe have been recorded. Notice has also been issued within the limitation period. The question whether the notice was addressed to the correct person has been examined and dealt with by us above. Service of notice is not the jurisdictional precondition but a matter pertaining to making of the order of assessment. Before an assessment order is passed, the notice must beserved. As noticed above, on February 21, 2002, Vijay Narain Seth, director of the respondent company appeared before the Assessing Officer. The respondent had also filed some details before the Assessing Officer who passed the assessment order." "45. We may note, the observations of the Supreme Court in Balchand v. ITO (1969) 72 ITR 197 (SC) wherein it was held that in construing a statutory notice, extraneous evidence may be loo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ention the provision in the notice was not a circumstance which could be said to vitiate the ultimate order. The said decision relates to the assessment made consequent on the search conducted in assessee's place and notice was issued thereon to eight firms and to the wife of the assessee. Referring to Section 158BD, this court held that non mentioning of the purpose for which the notice was issued or the source of the authority of the Officer issuing the notice per se would not defeat the aspect of the persons against whom the notice issued were fully aware of the purpose of issuing notice." "17. In the light of the above said decision of this court as well as in view of the Bombay High Court cited supra, we reject the contention of the assessee that the non mentioning of the block period would defeat the very assessment. Quite apart from this, the assessee participated in the inquiry conducted under section 131 of the Incometax Act and had also made a statement confirming the purchase of the land. Subsequent thereto, the assessee had participated in the enquiry and on 15.5.2002, in response to the notice under section 142(1) the assessee expressed his inability to file t....