India: Whether Document Obtained Under Right To Information Act Can Be Accepted As Evidence, After A Lapse Of 18 Years…

While the above can be treated as a secondary question, one more question which arose before the Hon'ble High Court of Kerala in a recent case of R Romi Vs. Commissioner of Income Tax, Thiruvananthapuram reported in 2014- TOIL-424-HC-KERALA-IT was whether a block assessment can be completed without issuing a notice u/s 143[2] of the Indian Income Tax Act. Briefing down the facts of the case, pursuant to a search U/s 132 of the Income Tax Act, 1961, the assesse was assessed U/s 143(3) of Income Tax Act read with Section 158BC, for the block period of almost ten years commencing from 01.04.1985 to 15.09.1995. Notice under Section 158BC was issued to the Assessee on 25.06.1996. The Assessee filed a NIL return of income and subsequently the AO passed an order U/s 143(3) read with Section 158 BC determining the total undisclosed income at Rs. 9, 55, 380/- and demanding income tax of Rs. 5, 73, 228/-.

PROCEEDINGS BEFORE THE TRIBUNAL:

On appeal before the Tribunal it was contended by the Assessee that since no notice U/s 143(2) was issued, the entire assessment should have been set aside. However the Tribunal was of the view that the Assessee was subjected to search in the year 1995 and the appeal was being head afresh in 2013, therefore the possibility of misplacing the 143(2) notice cannot be ruled out in this span of almost 18 years. It was also observed that the Assessee did not urge this legal issue at the time of filing the appeal before the Tribunal, but urged for the first time before us after a lapse of considerable years. The Tribunal reduced the addition to a limited extent.

PROCEEDINGS BEFORE THE HIGH COURT OF KERALA:

Aggrieved with the order of the Tribunal, the Assessee had appealed with the Hon'ble High Court of Kerala wherein he produced a document based on the Right to Information Act, which suggests that no such notice was issued. The Hon'ble Court also requested the standing counsel of the Department to verify the correctness of the information received in the RTI to which the counsel fairly submitted that the information was correct and no notice was issued under Section 143(2).

The two main questions which arose are reiterated below:

1. Whether block assessment could have been completed without issuing notice under Section 143(2) of the Income Tax Act and whether such omission would be a procedural irregularity or is curable?

2. Whether document obtained under Right to Information Act for establishing the non issuance of notice u/s 143(2) can be accepted as evidence, although there has been a lapse of 18 years since the search was first conducted.

After going through the Section 143(2) of the Act and relying on the judgment of Assistant Commissioner of Income Tax & Anr. V, Hotel Blue Moon, reported in [2010] 321 ITR 362, the Court came to the conclusion that there was no dispute that in order to make an assessment under Section 143(3) read with Section 158 BC, notice should be issued U/s 143(2) and omission to issue such a notice is not a procedural irregularity and is not curable.

Further, as it was also accepted by the Department that no such notice was issued, the Hon'ble High Court allowed the appeal in favor of the Assessee and set aside the order of the Tribunal and the Assessing officer.

CONCLUSION:

Looking at the recent judgment above, the two queries raised above are solved in favor of the Assessee being, a block assessment cannot be completed without issuing a notice under Section 143(2) and further that the document obtained under Right to Information Act would be avail evidence even if there has been a lapse of 18 years since the first search was conducted.

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