RAJAN GUPTA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is an appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as =the said Act') and it arises out of the order dated 30.01.2009 passed by the Income-tax Appellate Tribunal in ITA 385/Del/05 in respect of the block period 01.04.1990 to 18.01.2001. The following substantial questions of law arise for consideration in this appeal:-

(2.) To appreciate the pleas taken by the parties, it would be necessary to set down the factual position. A search was conducted on 18.01.2001 and it was said to have been completed in March 2001. The notice under Section 158BC of the said Act was served on the assessee on 03.12.2001 and the assessee filed the return on 31.12.2002. According to the learned counsel for the assessee / appellant, the notice under Section 143(2) of the said Act read with the provisions of Section 158BC(b) could have been issued by 31.12.2003, i.e., within the period of twelve months from the end of the month in which the return was filed. The return having been filed on 31.12.2002, according to the learned counsel for the appellant, the notice under Section 143(2) ought to have been issued by 31.12.2003. The learned counsel further submitted that the notice under Section 143(2) was, in fact, issued much later, i.e., on 05.07.2004. The block assessment order under Section 158BC (c) was also passed later, on 30.07.2004, when, in fact, according to the provisions of Section 158BE, the order should have been passed by 31.01.2003.

(3.) The learned counsel for the appellant / assessee referred to a decision of this court in the case of Commissioner of Income-tax v. Pawan Gupta,318 ITR 322 and submitted that the issuance of a notice under Section 143(2) was mandatory even in respect of the proceedings under Section 158BC. He also referred to the recent decision of the Supreme Court in the case of Assistant Commissioner of Income-tax and Anr. v. Hotel Blue Moon, 2010 321 ITR 362 which held that the notice under Section 143(2) of the said Act was a mandatory requirement in case the Assessing Officer disagreed with the return filed by the assessee pursuant to the notice under Section 158BC. The Supreme Court also held that it was not merely a procedural requirement, but it was mandatory that the notice under Section 143(2) ought to be issued within the period of limitation. In case it is not so done, then the assessment following such notice would be bad in law. The learned counsel for the appellant / assessee, therefore, contended that since the notice under Section 143(2) had been issued beyond the time prescribed under the said Act, the block assessment order dated 30.07.2004 was bad in law. He also submitted that, in any event, the block assessment order was beyond time in itself inasmuch as the last date for framing the assessment under Section 158BC(c) was 31.03.2003 in view of the provisions of Section 158BE