M NATARAJAN Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The assessee is on appeal as against the order of the Income Tax Appellate Tribunal raising the following substantial questions of law relating to the Block Assessment covering the assessment years 1987-88 to 1997-98 (Upto 2.9.1996).

(2.) The assessee is a proprietor of a publication, which publishes two magazines, one a weekly and the other a fortnightly. On 24.9.1996, there was a search in the business premises as well as in the residence of the assessee leading to recovery of certain documents. A notice under Section 158BC was issued to the assessee on 4.11.1996 and the same was served on 19.11.1996. Subsequently, a notice dated 28.2.1997 was issued under Section 142(1) by the Income Tax Officer calling for certain particulars. In the meantime, on 2.7.1997 the case was transferred to another Assessing Officer, viz., the Assistant Commissioner of Income Tax, Central Circle II (4), Chennai. Again, a notice under Section 142(1) was issued calling for certain particulars, the details for which were enclosed along with the notice. Admittedly, the assessee was granted permission to take copies of the seized materials. Finally on 5.9.1997, the assessee filed his return of income under Section 158BC, wherein the assessee had admitted the total undisclosed income of Rs.3,80,000/-. The assessment proceedings were initiated by issuance of notice under Section 143(2) on 9.9.1997 fixing the date of hearing on 12.9.1997. The assessee received the notice on 11.9.1997. Since there was no representation on 12.9.1997, the case was reposted to 3.10.1997 and on the said date, a Chartered Accountant appeared as assessee's representative. Admittedly, the said Chartered Accountant appeared on various subsequent dates before the Assessing Officer. In the meantime, considering the complexity of the accounts, the Revenue decided to refer the case to a special audit for the assessments years 1993-94 to 1997-98(upto 24.9.1996), which covers the block assessment period. An order under Section 142(2A) dated 11.9.1997 was passed appointing the Special Auditor for carrying out the special audit . The issues specifically referred to the Special Auditor for his comments were as under:-

(3.) The Special Auditor conducted the audit and forwarded his report to the assessee on 23.2.1998. The assessee in turn submitted the report to the Assessing Officer on 24.2.1998. It is seen from the narration in the preamble portion of the assessment order as well as in the text of the assessment order that the notice of assessment was issued to the assessee on 13.2.1998 which was received by the assessee served on 19.2.1998. The assessment order records the dates of hearing as under: