PAI VINOD Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) All these four appeals are taken up for consideration together as it pertains to the same assessee and regarding the same dispute. It relates to the block assessment years 1988-89 to 1998-99. After conclusion of the search and seizure, the assessee filed a return on May 4, 1999. The Assessing Officer repudiated the said return filed under section 158BC(a) and wanted to hold an enquiry. Therefore he issued a notice under section 143(2) of the Income-tax Act, 1961 (for short hereinafter referred to as "the Act") on July 3, 2000. The period stipulated for issue of notice is one year from the date of filing of the return. The said period expired on May 31, 2000. Therefore, admittedly, the notice issued on July 3, 2000; was beyond the period of limitation. Therefore, the assessee contended that the assessing authority has no jurisdiction to pass any assessment orders for the block period. However, overruling the said objection and holding those provisions are not applicable to the block assessment proceedings he has passed an order on the merits and levied tax under section 133 of the Act. Aggrieved by the same, the assessee preferred an appeal to the Appellate Commissioner who partly allowed the appeal and granted partial relief to the assessee. Aggrieved by the said order both the assessee as well as the Revenue preferred appeals to the Tribunal. The Tribunal on the merits granted relief to the assessee. Aggrieved by the same, the Revenue has preferred I.T.A. No. 905 of 2006 and I.T.A. No. 904 of 2006 herein as before the Tribunal there were two appeals. The assessee filed miscellaneous application bringing it to the notice of the Tribunal that the notice was issued beyond one year period and, therefore, the entire proceedings is void ab initio. Following the judgment of the Special Bench the Tribunal held that those mandatory provisions are not applicable to block assessment proceedings. The said application was rejected. In the said application two grounds were urged one is regarding limitation. The second ground is that the satisfaction required under law did not exist. On the ground of limitation the contention of the assessee was rejected. In so far as the ground of non-satisfaction is concerned the matter was remanded to the assessing authority. Against that portion of the order remanding the matter to the assessing authority the Revenue has preferred an I.T.A. No. 314 of 2007 herein. Challenging the order passed by the Tribunal on the ground that it was not barred by time, the assessee has preferred I.T.A. No. 818 of 2006 herein. That is how all these four appeals arising out of the very same proceedings are before us and they are taken up for consideration together. The question of limitation is a jurisdictional limitation. If the proceedings are initiated beyond the period of limitation, initiation of proceedings would be without jurisdiction. Then the order of assessment passed by the assessing authority also would be a nullity and non est in the eye of law. In this regard, the assessee relies on the judgment of the apex court in the case of Asst. CIT v. Hotel Blue Moon, 2010 321 ITR 362 where an identical issue regarding limitation, mandatory nature of the provision under section 143(2) being applicable to block assessment proceedings arose for consideration. The first question which was formulated in the aforesaid judgment reads as under (page 367):

(2.) In the facts and circumstances of the case, the issuance of notice under section 143(2) of the Income-tax Act, 1961, within the prescribed time limited for the purpose of making assessment under section 143(3) of the Income-tax Act, 1961, is mandatory.

(3.) The said question was answered by the apex court in the following manner (page 369):