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 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,
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
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
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  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.
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Singhania & Partners LLP, Solicitors and Advocates
Under the Arbitration and Conciliation (Amendment) Act, 2015. There are two avenues available for the enforcement of foreign awards in India, viz., the New York Convention and the Geneva Convention, as the case may be.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).