Surjeet Bahadur Khurania v. Commissioner Of Income Tax, Karnal

ITA No.346 of 2009 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA|AT CHANDIGARH Sr. No.316 ITA No.346 of 2009 (O&M)Date of decision: 22.09.2016 Surjeet Bahadur Khurania ....Appellant VerSus Commissioner of Income Tax, Karnal....Respondent CORAM:HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICEHON'BLE MR. JUSTICE DEEPAK SIBAL RRS Present:-Mr. S.K. Mukhi, Advocatefor the appellant. Mr. Yogesh Putney, Advocatefor the respondent. RRS S.J. VAZIFDAR, CHIEF JUSTICE (QRAL) This is an appeal against the order of the Tribunal confirmingthe order of the Commissioner of Income Tax (Appeals), Patiala (forshort-'CIT Appeals’). The CIT (Appeals), in turn, had substantiallyconfirmed the order of the Assessing Officer. The appeal is in respect of theblock period from 01.04.1987 to 06.06.1997. The matter arises on account of an order passed by theAssessing Officer under Section 158BC(c) read with Sections 158(BB) (b)and Section 143(3) of the Income Tax Act, 1961 (for short the ‘Act'). ?DThe appellant/assessee contends that the following substantialquestions of law arise in this appeal:- ITA No.346 of 2009 (O&M) That the ITAT is not justified in non-consideration of legalobjections and not deciding the Grounds of Appeal legally taken bythe appellant though reproduced in its order under Statutory appealindicate non-application of mind by the ITAT while deciding theappeal and thus deserve indulgence of this Hon'ble Court in settingaside the orders of ITAT and the Authorities below.objections and not deciding the Grounds of Appeal legally taken bythe appellant though reproduced in its order under Statutory appealindicate non-application of mind by the ITAT while deciding theappeal and thus deserve indulgence of this Hon'ble Court in settingaside the orders of ITAT and the Authorities below. 11)That the ITAT is not justified in concurring with the findings ofCIT (A) without considering the arguments, explanations andjudicial decisions and also without passing any speaking order onthe legal issue of reference to special auditors u/s 142(2A)of theIncome Tax Act, 1961 and that too having so done withoutalfording any opportunity of being heard to the appellant being abasic and legal requirement of such reference.CIT (A) without considering the arguments, explanations andjudicial decisions and also without passing any speaking order onthe legal issue of reference to special auditors u/s 142(2A)of theIncome Tax Act, 1961 and that too having so done withoutalfording any opportunity of being heard to the appellant being abasic and legal requirement of such reference. 111)That the ITAT is not justified in concurring with the findings ofCIT(A) without considering the arguments, explanations andjudicial decisions and also without passing any speaking order onthe legal issue pertaining to “Dumb Document” giving noindication to prove having any connection any enquiry qua the saiddocument and also not appreciating the legal principle that thoughany document found at the place of the assessee is presumed to bebelonging to him but this presumption is rebuttable and havingduly rebutted by the appellant the resultant addition ofRs.32,72,595/- in the hands of appellant is bad in law.CIT(A) without considering the arguments, explanations andjudicial decisions and also without passing any speaking order onthe legal issue pertaining to “Dumb Document” giving noindication to prove having any connection any enquiry qua the saiddocument and also not appreciating the legal principle that thoughany document found at the place of the assessee is presumed to bebelonging to him but this presumption is rebuttable and havingduly rebutted by the appellant the resultant addition ofRs.32,72,595/- in the hands of appellant is bad in law. iv)That the ITAT has erred in concurring with the findings of the CIT(A) in confirming the additions to the extent of Rs.50,000/-,60,000/- and Rs.70,000/- in the A.Y. 1991-92, 1992-93 and 1993-94 respectively on the basis of estimation of undisclosed incomefrom the alleged sale and purchase of land on the basis of thealleged dumb document as so referred in item No.(H) (spura)which does not belong to the appellant at all nor anymaterial/evidence has been brought on record by the AO to proveany nexus wherein the appellant relies upon the basis as adopted initem H (supra).(A) in confirming the additions to the extent of Rs.50,000/-,60,000/- and Rs.70,000/- in the A.Y. 1991-92, 1992-93 and 1993-94 respectively on the basis of estimation of undisclosed incomefrom the alleged sale and purchase of land on the basis of thealleged dumb document as so referred in item No.(H) (spura)which does not belong to the appellant at all nor anymaterial/evidence has been brought on record by the AO to proveany nexus wherein the appellant relies upon the basis as adopted initem H (supra). v)That the ITAT has erred in concurring with the findings of the CIT(A) in confirming the additions to the extent of Rs.40,000/-, in theA.Y. 1998-99, on the basis of estimation of undisclosed incomefrom the alleged profit on sale of EO Plot and that of Bajaj Plot onthe basis of the alleged dumb document copy at Annexure A-8 asso referred in item No.(H)(supra) which does not belong to theappellant at all nor any material/evidence has been brought on(A) in confirming the additions to the extent of Rs.40,000/-, in theA.Y. 1998-99, on the basis of estimation of undisclosed incomefrom the alleged profit on sale of EO Plot and that of Bajaj Plot onthe basis of the alleged dumb document copy at Annexure A-8 asso referred in item No.(H)(supra) which does not belong to theappellant at all nor any material/evidence has been brought on record by the AO to prove any nexus wherein the appellant reliesupon the basis as adopted in item H (supra). V1)That the ITAT has erred in concurring with the findings of the CIT(A) in confirming the additions to the extent of Rs.12,00,000/- onaccount of alleged loans given, in the A.Y. 1998-99, and Rs.15,000/- on the basis of loans raised as undisclosed income on thebasis of the alleged dumb document copy at Annexure A-9 as soreferred in item No.(H)(supra) which does not belong to theappellant at all nor any material/evidence has been brought onrecord by the AO to prove any nexus wherein the appellant reliesupon the basis as adopted in item H (supra).(A) in confirming the additions to the extent of Rs.12,00,000/- onaccount of alleged loans given, in the A.Y. 1998-99, and Rs.15,000/- on the basis of loans raised as undisclosed income on thebasis of the alleged dumb document copy at Annexure A-9 as soreferred in item No.(H)(supra) which does not belong to theappellant at all nor any material/evidence has been brought onrecord by the AO to prove any nexus wherein the appellant reliesupon the basis as adopted in item H (supra). V11)That the ITAT has erred in concurring with the findings of the CIT(A) in confirming the additions to the extent of Rs.6,000/- andRs.20,000/- on account of alleged loans on 06.05.1997 and30.05.1997 respectively by referring to some dumb documentNo.13 at page 48 on the basis of loans raised as undisclosedincome on the basis of the alleged dumb document copy atAnnexure A-10 as so referred in item No.(H) (supra) which doesnot belong to the appellant at all nor any material/evidence hasbeen brought on record by the AO to prove any nexus wherein theappellant relies upon the basis as adopted in item H (supra).(A) in confirming the additions to the extent of Rs.6,000/- andRs.20,000/- on account of alleged loans on 06.05.1997 and30.05.1997 respectively by referring to some dumb documentNo.13 at page 48 on the basis of loans raised as undisclosedincome on the basis of the alleged dumb document copy atAnnexure A-10 as so referred in item No.(H) (supra) which doesnot belong to the appellant at all nor any material/evidence hasbeen brought on record by the AO to prove any nexus wherein theappellant relies upon the basis as adopted in item H (supra). Vill)That the ITAT has erred in concurring with the findings of the CIT(A) in confirming the additions to the extent of Rs.22,43,258/- bywrongly presuming it to be cash found during the course of searchas per para 3.8 of its order which factually incorrect as there was nosuch cash found during the search nor it was so held either by theAO or by the CIT(A) and thus ITAT without application of itsmind concurred with the findings of AO,(A) in confirming the additions to the extent of Rs.22,43,258/- bywrongly presuming it to be cash found during the course of searchas per para 3.8 of its order which factually incorrect as there was nosuch cash found during the search nor it was so held either by theAO or by the CIT(A) and thus ITAT without application of itsmind concurred with the findings of AO, ix)That the order of the Tribunal is legally unsustainable & bad in lawand perverse.and perverse. 3The appeal stands admitted only in respect of question No.(1). In our view, the other questions do not raise any substantial question of law. 4This appeal was directed to be heard alongwith ITA No.121 of2010, which is not on board today. In that appeal, another counsel isappearing on behalf of the respondent/assessee. However, learned counselappearing on behalf of the department states that the appellant therein will2010, which is not on board today. In that appeal, another counsel isappearing on behalf of the respondent/assessee. However, learned counselappearing on behalf of the department states that the appellant therein will ITA No.346 of 2009 (O&M) be withdrawing that appeal as the tax effect therein is less than thatprescribed in circular dated 10.12.2015 issued by the CBDT. Re: Question No.(i) and question in CM No.17939 of 2014. 5 If the appellant succeeds on this issue, the rest of the issuesmust also be decided in his favour. onThe appellant contended that the notice issued under Section1L58BC 1snon-eStand void and therefore, the entire proceedings relating tothe block assessment are illegal. The contention is as follows: Section158BC requires the notice to stipulate that the return should be filed in notless than 15 days. The notice issued to the appellant under Section 158BC,however, required him to file the return “within 15 days”. The expression“within 15 days” is less than 15 days. The notice according to the assesseeis, therefore, voidab initio Re: Question No.(i) and question in CM No.17939 of 2014. 5 If the appellant succeeds on this issue, the rest of the issuesmust also be decided in his favour. onThe appellant contended that the notice issued under Section1L58BC 1snon-eStand void and therefore, the entire proceedings relating tothe block assessment are illegal. The contention is as follows: Section158BC requires the notice to stipulate that the return should be filed in notless than 15 days. The notice issued to the appellant under Section 158BC,however, required him to file the return “within 15 days”. The expression“within 15 days” is less than 15 days. The notice according to the assesseeis, therefore, voidab initio vaWe will presume that this point was raised before the AssessingOfficer, CIT (Appeals) and the Income Tax Appellate Tribunal. However,from the orders passed by these three Authorities, it is apparent that thispoint was not pressed. After the decision of the Tribunal, dismissing theassessee's appeal, the assessee raised the issue before the Tribunal by filinga Miscellaneous Application No.381/DEL/2009 contending that it is a purequestion of law. The Tribunal having rejected the application, thesequestions have been sought to be raised in CM No.17939 of 2014 filed inthis appeal. The questions are as follows:-. aIt is contended that the learned CIT (Appeals) has erred in notdeciding as to whether the Assessing Officer had the jurisdiction tofrom a block assessment order u/s 1LbS8BC of the LT. Act 1961 ithe facts and circumstances of the case of appellant.deciding as to whether the Assessing Officer had the jurisdiction tofrom a block assessment order u/s 1LbS8BC of the LT. Act 1961 ithe facts and circumstances of the case of appellant. b|It is contended that the learned CIT(Appeals) has erred in holdingthat the notice issue u/s 158BC on dated 21.09.98 is a valid andthat the notice issue u/s 158BC on dated 21.09.98 is a valid and legal notice. CcIt is contended that the learned CIT (Appeals) has erred in factsand law in not appreciating the contention of the appellant that theissue of notice u/s 158BC without providing all the photocopies ofthe seized material renders the same as nullity and henceproceeding culminating out of such a notice are bad in law”. Mr. Putney, the learned counsel appearing on behalf of therespondent-revenue contended that the appellant ought not to be permittedto raise this issue as it had not been pressed earlier before the Authorities.We have, however, permitted the appellant to raise the issue. 8.Mr. Mukhi, the learned counsel appearing on behalf of theappellant-assessee contends that block assessment proceedings are null andvoid, based on the following facts, On June 06, 1997, a search and seizure operation wasconducted under Section 132(1) of the Act in the premises of the assesseeand other members of his family and group concerns viz. M/s Muni RollerFlour Mills Private Limited and M/s Durga Trading Company, which is asole propriety concern of the assessee. Documents were seized together withthe regular books of accounts pertaining to the block period. The assesseefiled the return on 12.05.1999 declaring his income to be “nil”. During thesearch at the assessee's residence, several documents including ledgers,journals, cash books and stock register were seized. Q Initially, the department served a notice dated 19.11.1997 uponthe assessee. At the head of the notice, it is stated to be under Section 142(1) of the Income Tax Act, 1961. This was an inadvertent error. The body ofthe notice makes it clear that it was in fact a notice under Section 158 BC,The notice states that it is in connection with the assessment for which the ITA No.346 of 2009 (O&M) -6- respect of which he was assessable. The notice further stated that the returnshould be in the application Form 2B, as is prescribed in Rule 12(1A) of theIncome Tax Rules, 1962. The return was directed to be delivered to theAssessing Officer on or before 24.12.1997, which was more than 15 daysfrom the date ofthe said notice i.e. 19.11.1997. Q Initially, the department served a notice dated 19.11.1997 uponthe assessee. At the head of the notice, it is stated to be under Section 142(1) of the Income Tax Act, 1961. This was an inadvertent error. The body ofthe notice makes it clear that it was in fact a notice under Section 158 BC,The notice states that it is in connection with the assessment for which the ITA No.346 of 2009 (O&M) -6- respect of which he was assessable. The notice further stated that the returnshould be in the application Form 2B, as is prescribed in Rule 12(1A) of theIncome Tax Rules, 1962. The return was directed to be delivered to theAssessing Officer on or before 24.12.1997, which was more than 15 daysfrom the date ofthe said notice i.e. 19.11.1997. 10,This notice, it is contended, is also void for it is stated to beunder Section 142(1) and not under Section 158BC. ll.The contention is not well-founded. The reference to Section142(1) was an obvious inadvertent error. This is clear from the fact that thenotice itself states that the return should be in Form 2B as prescribed inRule 12(1A). Rule 12(1A), as it stood at the relevant time, read as under:- 912. Return of income:- 12(1A)- The return setting forth the total incomeincluding the undisclosed income for the blockperiod required to be furnished under clause (a) ofSection 158BC shall be in Form No2BIand beverified in the manner indicated therein.” (emphasis supplied). Further, Rule 12(1) refers to all returns including regularreturns under Section 139. It is important to note that Rule 12(1A)specifically requires the return with respect to the block period. Rule 12(1A)specifically refers to Section 158BC and to Form No.2B. The heading of Form No.2B read as under:- “HORM No2B Return of income for block assessment[See rule 12(1A) of Income-tax Rules, 1962]| ITA No.346 of 2009 (O&M) It is, therefore, clear that the assessee could not possibly haveconsidered the notice to be under Section 142(1). 12.Even the facts and circumstances of the case do not indicatethat the assessee could have been under the misapprehension that the noticewas under Section 142(1) and not under Section 158BC. The assessee wasadmittedly aware of the search and seizure operation. He had already filedthe return under Section 139. He must have known, therefore, that the noticewas not to file a regular return which he had already filed.13,It was then contended that the notice does not specify the block period.14.At least, in the facts and circumstances of this case, that wouldnot render the notice void. It is not the assessee's case that there was anyother search and seizure operation other than the one conducted on06.06.1997. That being the case, the block period also was obvious. It wasas Stipulated in Section 158B(a) which as it stood at the relevant timeprovided that unless otherwise required block period means the periodcomprising previous years relevant to the 10 assessment years preceding theprevious year in which the search was conducted under Section 132, 15,In any event, this would be a mere technicality. The assessee|was not prejudiced in any manner whatsoever. The assessee has notestablished that he was prejudiced on account of the notice not furnishingthe block period or on account of it stating to be under Section 142(1),section 292B is a complete answer to this contention. Section 292B reads asunder:- 9Return of income, etc., not to be invalid on certain grounds. 2OIB.No return of income, assessment, notice summons or other proceeding, furnished or made or issued taken or purported to havebeen furnished or made or issued or taken in pursuance of any otthe provisions of this Act shall be invalid or shall be deemed to beinvalid merely by reason of any mistake, defect or omission in suchreturn of income, assessment, notice, summons or other proceedingif such return of income, assessment, notice, summons or otherproceeding is in substance and effect in conformity with oraccording to the intent and purpose of this Act.” 9Return of income, etc., not to be invalid on certain grounds. 2OIB.No return of income, assessment, notice summons or other proceeding, furnished or made or issued taken or purported to havebeen furnished or made or issued or taken in pursuance of any otthe provisions of this Act shall be invalid or shall be deemed to beinvalid merely by reason of any mistake, defect or omission in suchreturn of income, assessment, notice, summons or other proceedingif such return of income, assessment, notice, summons or otherproceeding is in substance and effect in conformity with oraccording to the intent and purpose of this Act.” 16.The reference to Section 142(1) and the absence of the blockperiod being specified in the notice were mere mistakes, detects oromissions and the notice in substance and effect is in conformity with and/or according to the intent and purpose of this Act. The intent and purpose ofthe Act is to be carried out in respect of the block assessment. 17.This question, therefore, must be answered against the assesseeon the basis of the notice dated 19.11.1997 itself. 18.There is yet another aspect on this question. The AssessingOfficer probably out of abundant caution issued a further notice dated21.08.1998, which has been annexed to the said CM No.17939 of 2014. 19,This notice is expressly under Section 158BC. The block periodis specified as the financial year 1987-88 to 1996-97 and 01.04.1997 to06.06.1997. The only infirmity that is pointed out in respect of this notice isthat the return should be delivered “within 15 days of the service of thisnotice’. Mr. Mukhi, contended that the expression “within 15 days”indicates a period less than 15 days. In support of this submission, he reliedupon a judgment of the Supreme Court in‘Commissioner ofIncome-Tax vs.Braithwaite and Co. Ltd.', [1993] 201 ITR 343 (SC)We will assume that tobe so. In other words, we will assume that words “within 15 days” indicate aperiod of time less than 15 days. ITA No.346 of 2009 (O&M) 2()We are, however, unable to agree with Mr. Mukhi on the maincontention, namely, that on account of the notice dated 21.08.1998 requiringthe assessee to file the return in less than 15 days, the entire blockassessment is without jurisdiction and void ab initioSection L58BC readsas under:- 9Procedure for block assessment. 158BC. Where any search has been conducted undersection-56or books of account, other documents or assets are requisitioned undersection 132A, 1n the case of any person, then,— (a) the Assessing Officer shall— (1) in respect of search initiated or books of account or otherdocuments or any assets requisitioned aiter the 30th day of June, 1995, butbefore the Ist day of January, 1997, serve a notice to such personrequiring him to furnish within such time not being less than fifteen days; (11) in respect of search initiated or books of account orother documents or any assets requisitioned on or after the Ist day ofJanuary, 1997, serve a notice to such person requiring him to furnish!Within such time not being less than fifteen days but not more than fortytive daysSas may be specified in the notice a return in the prescribed form!and verified in the same manner as a return under clause (i) of sub-section(1) ofsection 142, setting forth his total income including the undisclosedincome for the block period ; Providedthat no notice under|section 148is required to be issued for thepurpose of proceeding under this Chapter : Provided furtherthat a person who has furnished a return under thisclause shall not be entitled to file a revised return; (b) the Assessing Officer shall proceed to determine the undisclosedincome of the block period in the manner laid down insection L58BBandthe provisions ofsection 142, sub-sections (2) and (3) of.section 143>section 144and.section 145shall, so far as may be, apply; Providedthat no notice under|section 148is required to be issued for thepurpose of proceeding under this Chapter : Provided furtherthat a person who has furnished a return under thisclause shall not be entitled to file a revised return; (b) the Assessing Officer shall proceed to determine the undisclosedincome of the block period in the manner laid down insection L58BBandthe provisions ofsection 142, sub-sections (2) and (3) of.section 143>section 144and.section 145shall, so far as may be, apply; (c) the Assessing Officer, on determination of the undisclosed income ofthe block period in accordance with this Chapter, shall pass an order ofassessment and determine the tax payable by him on the basis of suchassessment; (d) the assets seized undersection |32or requisitioned undersection 132AShall be dealt with in accordance with the provisions ofsection 132B» ITA No.346 of 2009 (O&M) 21|section 158BC mandates that the Assessing Officer is to servea notice to such person requiring him to furnish a return in the prescribedform and verified in the manner stipulated. The Assessing Officer must,therefore, serve such a notice, without which an assessee would not beliable to file a return in respect of a block assessment. The assessee is alsoentitled, as a matter of right, to a period not less than 15 days to file such areturn. The Assessing Officer does not have the power to curtail this period,Thus, even if a notice under Section 158BC(a) specifies a period less than15 days, it would not affect an assessee's right to file a return after a periodof 15 days. The present case falls under Section 158BC(a)(ii). In such acase, an assessee would be entitled to file the return within the outer limitprescribed in Section 158BC(a)(i1) namely 45 days. Thus, while it ismandatory for the Assessing Officer to serve a notice requiring the assesseeto file a return under Section 158BC and the assessee is entitled to not lessthan 15 days to file the return, the section does not indicate that if the noticeinadvertently prescribes a period less than 15 days, it is void. Much lessdoes the section indicate that the entire block proceedings relating to theblock assessment would be void on account thereogT. 22.This is, in fact, the view taken by a Division Bench of thisCourt 1n‘Commissioner of Income-Tax vs. Naveen Verma’, [2012/346 ITR100 (P&H).The questions before the Division Bench were as follows:- “G)Whether the hon'ble Income-Tax Appellate Tribunal wasright in holding that the notice under Section 1583BD becomedefective merely because the Assessing Officer has allowed lessthan 15 days time to file the return?right in holding that the notice under Section 1583BD becomedefective merely because the Assessing Officer has allowed lessthan 15 days time to file the return? (41)Whether the hon'ble Income-Tax Appellate Tribunal,having held the notice under Section 158BD to be defective, erredin holding that the defect was not curable under Section 292B ofhaving held the notice under Section 158BD to be defective, erredin holding that the defect was not curable under Section 292B of the Act?” The Tribunal allowed the assessee's appeal only on the groundthat the assessment proceedings were vitiated on account of the assesseehaving not been given a clear period of 15 days for filing the return underSection 158BC. The Division bench held as under:- (41)Whether the hon'ble Income-Tax Appellate Tribunal,having held the notice under Section 158BD to be defective, erredin holding that the defect was not curable under Section 292B ofhaving held the notice under Section 158BD to be defective, erredin holding that the defect was not curable under Section 292B of the Act?” The Tribunal allowed the assessee's appeal only on the groundthat the assessment proceedings were vitiated on account of the assesseehaving not been given a clear period of 15 days for filing the return underSection 158BC. The Division bench held as under:- “8. The above provisions are statutory recognition of the principlesof natural justice which are applicable to assessment proceedings under theAct. The affected party is entitled to the fair opportunity and fairprocedure. Since the period of 15 days has been specified statutorily, itmay not be fair to expect filing of return in shorter period. At the sametime, the effect of violation of the principles of natural justice is not toalways nullify the exercise of jurisdiction unless prejudice is caused,Where period specified in the notice is less than the statutory period, noprejudice is caused if return filed is taken into account. The noticespecifying lesser period can be read as specifying the statutory period. Theprinciple is duly recognised under section 292B of the Act.” In State Bank of Patiala v. S. K. Sharma [1996] 3 SCC 364, after considering thecase law on the point. The Division Bench answered the questions in favour of theRevenue. [t was held as under: 33. We may summarise the principles emerging from theabove discussion. (These are by no means intended to beexhaustive and are evolved keeping in view the context ofdisciplinary enquiries and orders of punishment imposed byan employer upon the employee):.. | (3) In the case of violation of a procedural provision, theposition is this : procedural provisions are generally meantfor affording a reasonable and adequate opportunity to thedelinquent officer/employee. They are, generally speaking,conceived in his interest. Violation of any and everyprocedural provision cannot be said to automatically vitiatethe enquiry held or order passed. Except cases falling under— 'no notice’, 'no opportunity’ and ‘no hearing’ categoriesthe complaint of violation of procedural provision should beexamined from the point of view of prejudice, viz., whethersuch violation has prejudiced the — delinqueofficer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced,appropriate orders have to be made to repair and remedy theprejudice including setting aside the enquiry and/or theorder of punishment. If no prejudice is established to haveresulted therefrom, it is obvious, no interference is calledfor. In this connection, it may be remembered that there maybe certain procedural provisions which are of a fundamentalcharacter, whose violation is by itself proof of prejudice,The court may not insist on proof of prejudice in such cases.As explained in the body of the judgment, take a case wherethere is a provision expressly providing that after theevidence of the employer/ Government is over, theemployee shall be given an opportunity to lead defence inhis evidence, and in a given case, the enquiry officer doesnot give that opportunity in spite of the delinquent oftficeremployee asking for it. The prejudice is self-evident. Noproot of prejudice as such need be called for in such a case.To repeat, the test is one of prejudice, i.e., whether theperson has received a fair hearing considering all things,Now, this very aspect can also be looked at from the pointof view of directory and mandatory provisions, if one is soinclined. The principle stated under (4) hereinbelow is onlyanother way of looking at the same aspect as is dealt withherein and not a different or distinct principle." Ll.We are of the view that the Tribunal erred in concluding that failure to}give notice of 15 days will vitiate the assessment itself without consideringthe prejudice to the assessee. Total absence of notice may be on a differentfooting but if notice is duly served, the assessee can either avail of thestatutory time for filing of the return irrespective of shorter periodmentioned in the notice or can be given fresh opportunity if it is held thatthe assessee suffered prejudice on account of shorter period mentioned inthe notice. In any situation, it is not permissible to quash the assessmentproceedings merely on the ground that the period mentioned in the noticewas lesser than the statutory period specified under section 158BC(a)= (emphasis supplied) ITA No.346 of 2009 (O&M) There is no doubt that the judgment squarely covers the caseagainst the appellant. Mr. Mukhi, however, submitted that we ought not tobe bound by the judgment as the respondent did not appear before the Courtin that case. We are unable to agree. The doctrine of precedent applies evenif one of the parties remains unrepresented. This was an appeal underSection 260-A of the Income Tax Act, 1961. The Court was not bound toallow the appeal merely because the respondent did not appear. The judgment is, therefore, binding on us. We are in any evententirely in agreement with the judgment. 23.The question of law is, therefore, answered in favour of therespondent/revenue and against the appellant. D4.Mr. Mukhi, however, relied upon the judgment of the SupremeCourt 1n‘Assistant Commissioner ofIncome-Tax and another vs. Hotel BlueMoon, [2010] 321 ITR 562The questions that fell for consideration beforethe Supreme Court were as follows:- “(1) Whether on the facts and in circumstances of the case theissuance of notice under Section 143(2) of the Income-Tax Acct1961 within the prescribed time limit for the purpose of making theassessment under Section 143(3) of the Income-Tax Act, 1961 ismandatory? (2) Whether, on the facts and in the circumstances of the case andin view of the undisputed findings arrived at by the Commissionerof Income-Tax (Appeals), the additions made under Section 68 ofthe Income-tax Act, 1961 should be deleted or set aside?” 25|The question that fell for consideration, therefore, was notunder Section LbSBC. Mr. Mukhi, however, also relies upon the _ followi observations of the Supreme Court:- “13. Section 158BC stipulates that the Chaper would have application where search has been effected under Section 132 or onrequisition of books of account, other documents or assets underSection 132A. By making the notice issued under this Sectionmandatory, it makes such notice the very foundation ofjurisdiction.Such notice under the section is required to be served on the personwho is found to be having undisclosed income. The section itselfprescribes the time limit of 15 days for compliance. In respect ofsearches on or after January 1, 1997, the time limit may be given upto 45 days instead of 15 days for compliance. Such notice isprescribed under rule 12(1A)which in turn prescribes Form 2B forblock return. 14.Section 158BC(b) is a procedural provision formakin a regular assessment applicable block assessment as well.Section 158BC(b) would require the Assessing Officer to computethe income as well as tax on completion of the proceedings to bemade. Section BC(d) would authorise the Assessing Officer toapply the assets seized in the same manner as are applied underSection 132B.” 14.Section 158BC(b) is a procedural provision formakin a regular assessment applicable block assessment as well.Section 158BC(b) would require the Assessing Officer to computethe income as well as tax on completion of the proceedings to bemade. Section BC(d) would authorise the Assessing Officer toapply the assets seized in the same manner as are applied underSection 132B.” Indeed, the Supreme Court held the issuance of the noticeunder Section 158 BC to be mandatory. It is in that context that the SupremeCourt held that such a notice is the very foundation for adjudication. It alsoheld that the Section prescribed the time limit of 15 days for compliance.The Supreme Court, however, did not hold that if there is an inadvertenterror such as the one in the present case, the notice would be void. Muchless, is it held that the entire block assessment proceedings are void onaccount thereof. The issue that falls for our consideration was neither raisedbefore, nor decided by the Supreme Court. The judgment, therefore, is of noassistance to the appellant. 26|Mr. Mukhi then relied upon the judgment of the Karnataka High Court in-‘Commissioner of Income-Tax and another vs. Micro LabsLtd.’, [2012] 348 ITR 75, wherein it was held as under:- “The proceeding under Chapter XIV-B and the provisions of Section 139 are different. A return filed under Section 139 is a voluntaryreturn, A return under Chapter XIV-B cannot be filed voluntarily, it is onlywhen a notice under Section 158BC is validly issued, only then a returncould be filed. It is not in every case that a notice under Section 158 BCwould be issued by the Revenue. However, as and when validly issued, itis only then that a return could be filed. When any search has beenconducted under Section 132 or books of account, other document orassets are requisitioned under Section 132A, it is only then, the AssessingOfficer shall proceed to assess the undisclosed income. Therefore, section158BA provides for jurisdiction to the Assessing Officer to assess theundisclosed income in accordance with Chapter XIV-B. Section 158BA(2)is a charging section. Section 158BB provides for computation ofundisclosed income for the block period and section 158BC provides forprocedure for block assessment. Therefore, a notice under Section 158 BCcannot be equated with that of notice under Section 148. A notice underSection 158BC provides for a procedure to be adopted for blockassessment. Under this procedure envisaged, the Assessing Officer shallServe a notice requiring the assessee to furnish his return within such timenot being less than 15 days but not more than 45 days as specified in thenotice. Therefore, the time to be granted to the assessee in terms of Section158BC is a minimum of 15 days and a maximum of 45 days. If the saidperiod of time is not granted, the notice is invalid rendering the entireproceedings as without jurisdiction. Admittedly, in this case, the noticeunder Section I158BC called upon the assessee to submit its return oincome “within a period of 15 days”. Within a period of 15 days is lessthan 15 days. Therefore, the mandatory period of time as stipulated underSection 158BC has not been complied with. The notice, therefore, isinvalid. An invalid notice cannot confer any jurisdiction on the authority.Hence, the entire proceeding are bad in law. The notice ab initio void.” QT.The judgment does support the appellant. We are, however, forthe reasons already mentioned, with respect, unable to agree with thejudgment. In any event, we are bound by the judgment of this Court in‘Commissioner of Income-Tax vs. Naveen Verma’, |2012| 346 ITR 100(supra). DS|In any event, in the case before us, there was also an earlier notice dated 19.11.1997 which we have held js valid. ITA No.346 of 2009 (O&M) QT.The judgment does support the appellant. We are, however, forthe reasons already mentioned, with respect, unable to agree with thejudgment. In any event, we are bound by the judgment of this Court in‘Commissioner of Income-Tax vs. Naveen Verma’, |2012| 346 ITR 100(supra). DS|In any event, in the case before us, there was also an earlier notice dated 19.11.1997 which we have held js valid. ITA No.346 of 2009 (O&M) 29|Mr. Putney, has relied upon the fact that the assessee had filed areturn, pursuant to second notice dated 21.08.1998. He submitted that theassessee did not raise the objection. Had we come to the conclusion that theproceedings are void on account of the notice dated 21.08.1998 granting thepetitioner less than 15 days to file a return it may have been possible tocontend that the entire proceedings would have been vitiated and theappellant having filed a return may not have made a difference on theground that there can be no estoppel against statute, 30.The analogy sought to be drawn with Section 148 of the Act isnot well-founded. In answer, Mr. Putney, relied upon the judgment of aDivision Bench of the Bombay High Court in-"Shirish Madhukar Dalvi vs.Assistant Commissioner of Income-Tax', [2006] 287 ITR 242, where it washeld :- “49. Having said so, now it is necessary to consider onemore potent legal submission of Mr. Sathe that the provisions ofsections 148 and 158BC are synonymous and pari materia. Havingexamined the provisions of sections 148(1) and I58BC, side byside, it would be clear that section 148(1) opens with the words"Before making the assessment, reassessment or recomputationunder section 147, the Assessing Officer shall serve on the assesseea notice requiring him ... ". This very opening sentence,unequivocally, goes to suggest that in order to assume jurisdictionfor assessment under section 147, notice under section 148(1) is acondition precedent ; whereas the scheme of Chapter XIV-B of theAct suggests that section 158BA is a section which provides thatnotwithstanding anything contained in any other provisions of thisAct, where after June 30, 1995, a search is initiated under section132 or books of account, other documents or any assets arerequisitioned under section 132A in the case of any person, then,the Assessing Officer shall proceed to assess the undisclosedincome in accordance with the provisions of this Chapter. Areading of this provision suggests that this section 158BA is the provision which provides for jurisdiction in favour of the AssessingOfficer to assess undisclosed income in accordance with ChapterXIV-B. Whereas section 158BA(2) is a charging section ; section158BB provides tor computation of undisclosed income for theblock period ; whereas section 158BC provides procedure for blockassessment. Section 158BA bestows jurisdiction on the AssessingOfficer and not section 158BC as submitted by Mr. Sathe. Thus,notice under section 158BC(a) cannot be equated with that ofnotice under section 148. That notice under section 158BC(a) onlyprovides for procedure to be adopted for block assessment. It doesnot confer jurisdiction to assess in favour of the Assessing Officer.In these circumstances, the submission made by Mr. Sathe isdevoid of any substance. provision which provides for jurisdiction in favour of the AssessingOfficer to assess undisclosed income in accordance with ChapterXIV-B. Whereas section 158BA(2) is a charging section ; section158BB provides tor computation of undisclosed income for theblock period ; whereas section 158BC provides procedure for blockassessment. Section 158BA bestows jurisdiction on the AssessingOfficer and not section 158BC as submitted by Mr. Sathe. Thus,notice under section 158BC(a) cannot be equated with that ofnotice under section 148. That notice under section 158BC(a) onlyprovides for procedure to be adopted for block assessment. It doesnot confer jurisdiction to assess in favour of the Assessing Officer.In these circumstances, the submission made by Mr. Sathe isdevoid of any substance. 50. The judgment of the Calcutta High Court in the case of ShawWallace & Co. Ltd. v. Asst. CIT [1999]248 TTR 13relied upon byMr. Sathe is not at all applicable to the facts of the present case. Inthat case, the Calcutta High Court was dealing with the power ofthe Assessing Officer to make a regular assessment in respect of afinancial year which formed the subject matter of the block periodof assessment. While considering this question, the observationswere made by the Calcutta High Court to say that section 158BCsubstituted the procedure under section 148. The observationsmade in the judgment are required to be read in the context inwhich they are made. It is not permissible to read them in isolationor out of context. A stray sentence cannot be allowed to be put intoservice to draw a meaning which was never meant by the authorhimself. Thus, these observations by themselves do not mean thatthe rigour of section 148 stands substituted with that of section158BC. Section 148 is a substantive section whereas section158BC is a procedural section. Both sections definitely stand ondifferent footings. As already observed, a procedural requirementcan always be waived by the subject for which benefit they areenacted as such submission made by Mr. Sathe in this behalf doesnot hold water.” 31.In any event, as we have already held, though the notice undersection 158 BC is mandatory errors such as those in the present case which block assessment proceedings void. 3?|Question (i) and the questions raised in CM No.17939 of 2014are, therefore, answered in favour of the Revenue-respondent. 33)As we mentioned earlier during the search and seizureoperation several documents were seized. Many of them did not form part ofthe regular Books of Accounts including Ledger. Re: Question (11) 34.This appeal is not maintainable in respect of this question. Theappeal, is therefore, dismissed as regards question (11),Re: question (ii1) 35)The respondents referred to a document that was found duringthe search. This document comprises five pages. It is titled ‘Chitha’01.04.1993 to 31.12.1993. 'Chitha' translated means a balance-sheet. Thevery first entry refers to the assessee Sh. Surjit Bahadur. A sum ofRs.40,14,126.18 is shown against his name. The assessee contended that thereference is to another person as his first name is spelt “Surjeet” and not‘Surjit' as in the disputed document. 36.This is essentially a question of fact. The Assessing Officer,CIT and the Tribunal had dealt with this document and considered it indetail. Further, the last page of this document spelt the name correctly as“Surjeet Bahadur” and against his name were written the words: “RokarMein”, which translated mean “in cash”. Further, as Mr. Putney pointed out,the appellant himself, in the appeal before the CIT(A) spelt his name asSurjit (Annexre A-5). There is no warrant for interference with theimpugned order on this ground. ITA No.346 of 2009 (O&M) 36.This is essentially a question of fact. The Assessing Officer,CIT and the Tribunal had dealt with this document and considered it indetail. Further, the last page of this document spelt the name correctly as“Surjeet Bahadur” and against his name were written the words: “RokarMein”, which translated mean “in cash”. Further, as Mr. Putney pointed out,the appellant himself, in the appeal before the CIT(A) spelt his name asSurjit (Annexre A-5). There is no warrant for interference with theimpugned order on this ground. ITA No.346 of 2009 (O&M) 37|It is important to note that the Assessing Officer exercisedpower under Section 142(2A) directing the assessee to get the accountsaudited by an accountant, as defined in the explanation to Section 288(2),The special auditor analyzed this balance sheet and the other documents,that were seized, as well. Based on the same and based on the independentanalysis, the three Authorities had come to the conclusion that the saidamount of Rs.40 lacs was unexplained. The Assessing Officer added thesame to the appellant's income. 38.The assessee also disowned the documents. He stated that hehad nothing to do with the documents and was unaware how they werefound at his place and at his residence. The fact is that the document wereadmittedly found at his residence Apart from the statement that he wasunaware of the documents, there is no explanation for the same. Thereliance of the Authorities under Section 132 (4A) is well-founded. TheAuthorities, therefore, rightly drew the presumption, in these circumstances,that the documents pertained to the assessee and the contents thereof aretrue. In any event, this is a finding of fact which does not raise a substantialquestion of law. The nature of the entries in documents have been sufficientl