# Chandrabhan v. Commissioner of Income Tax -I,Agra

- **Citation:** (2019) 1 ILRA 1270
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-21
- **Case number:** INCOME TAX APPEAL No.2 of 2011
- **Bench:** Bharati Sapru, Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/chandrabhan-v-commissioner-of-income-tax-i-agra-44448
- **Pages:** 5

## Headnote

A. Income Tax Act, 1961: Sections 132,
132A, 143(2), 158BC, 260A. Issuance of
notice
under
Section
143(2)
is
mandatory for making assessment under
Section 158 BC.

The returns of income had been filed after
search. Income was held to be undisclosed
income and was included in the assessment of
undisclosed income for the block period.
Appeal dismissed by CIT (A). Tribunal partly
allowed the appeal but turned down the
ground raised on issuance of notice u/s
143(2). Allowing the present appeal, the High
Court. The issuance of notice under Section
143(2) is mandatory for making assessment
under Section 158 BC of the Income Tax Act
and non-service thereof is fatal (Para 11, 13).

Precedent followed: -

1.Assistant Commissioner of Income Tax and
another Vs. Hotel Blue Moon(Para 7, 11, 12, 13)

2.Virendra Dev Dixit Vs. Assistant Commissioner of
Income-Tax,(Para 8, 11) (E-4)

## Text

1270 INDIAN LAW REPORTS ALLAHABAD SERIES
subject matter of challenge in the present
petition. However, those who had signed the
aforesaid settlements and settled their dues
with the employer have survived with no
further claim.

100. In view of the above, no
interference is warranted in the impugned
orders of issuance of recovery passed by
the Labour Commissioner under Section
3(1) of the U.P. Industrial Peace (Timely
Payment of Wages) Act, 1978.

101. Both the writ petitions are,
accordingly, dismissed. There will be no
order as to costs.
-----------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.08.2019

BEFORE
THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE ROHIT RANJAN AGARWAL, J.

INCOME TAX APPEAL No.2 of 2011

Chandrabhan ...Appellant
Versus
Commissioner of Income Tax -I,Agra
 ...Respondent

Counsel for the Appellant:
Sri S.K. Garg, Sri Ashish Bansal.

Counsel for the Respondent:
C.S.C., / Income Tax, Sri Manu Ghildyal,
Sri R.K.Upadhyaya. Sri S. Chopra.

A. Income Tax Act, 1961: Sections 132,
132A, 143(2), 158BC, 260A. Issuance of
notice
under
Section
143(2)
is
mandatory for making assessment under
Section 158 BC.

The returns of income had been filed after
search. Income was held to be undisclosed
income and was included in the assessment of
undisclosed income for the block period.
Appeal dismissed by CIT (A). Tribunal partly
allowed the appeal but turned down the
ground raised on issuance of notice u/s
143(2). Allowing the present appeal, the High
Court. The issuance of notice under Section
143(2) is mandatory for making assessment
under Section 158 BC of the Income Tax Act
and non-service thereof is fatal (Para 11, 13).

Precedent followed: -

1.Assistant Commissioner of Income Tax and
another Vs. Hotel Blue Moon(Para 7, 11, 12, 13)

2.Virendra Dev Dixit Vs. Assistant Commissioner of
Income-Tax,(Para 8, 11) (E-4)

(Delivered by Hon'ble Rohit Ranjan Agarwal J.)

1. This appeal under Section 260-A
of the Income Tax Act has been filed by
the assessee challenging order dated
13.10.2005
passed
by
Income
Tax
Appellate Tribunal, Agra Bench, Agra
(hereinafter called as 'Tribunal').

2. This appeal was admitted on
11.01.2011 on the following question of
law:-

"(I) Whether on a true and
correct interpretation of the provisions of
section 143(2), the Tribunal was legally
correct in holding that non-issuance/ nonservice of notice thereunder, had no
bearing
on
the
validity
of
Block
assessment order dated 28.04.2000 as
had been passed by the Assessing Officer
under Section 158BC read with section
143(3) of the Act?

(ii) Whether the "Tribunal" was
legally correct in holding that the
provisions related to service of notice
under section 143(2) stood dispensed
with, after the assessee was given an
opportunity of being heard by issue of
1 All. Chandrabhan Vs. Commissioner of Income Tax-I , Agra
1271
notice under various other sections, from
time to time, which the assessee had
availed by his participation?"

3. Brief facts of the case are that
assessee was intercepted by police and
was found to be carrying silver jewellery
in a Maruti van weighing 242.507 kg. As
the assessee could not explain source of
acquisition of silver ornaments, warrant of
authorisation for requisition of the same
was issued under Section 132 A of the
Income Tax Act (hereinafter called as
'Act') on 29.04.1998 by Commissioner of
Income Tax, Agra. Assessing Officer
issued and served notice under Section
158BC on the assessee on 08.10.1998.
Assessee filed return in Form 2B for the
block period on 23.07.1999. During
course of block assessment proceedings,
assessee initially surrendered 54 kg of
silver ornament for taxation, the same was
revised to 75 kg and finally to 100 kg.
Assessing Officer treated 102.54 kg of
silver ornament as unexplained and the
balance as explained. The value of
unexplained silver jewellery ornaments
was determined at Rs.4,33,907/-. The said
amount was taxed in the assessment year
1999-2000.

4. Assessee had never filed return of
income till action under Section 132 A
was taken on 29.04.1998. Assessee,
thereafter, filed return of income on
18.05.1998 for assessment year 1994-95
to 1997-98, while return for assessment
year 1998-99 was filed on 31.10.1998.
The assessee in all these return had
disclosed income from business of silver
ornament on labour basis. As the returns
of income had been filed after the search,
Assessing Officer, therefore, held that this
income was undisclosed income of the
assessee and included the same in
assessment of undisclosed income for the
block period. Aggrieved by assessment
order, the assessee filed appeal which was
partly allowed by Commissioner Income
Tax (Appeals)- II, Agra on 11.12.2001.
The assessee challenged order of the CIT
(A) before Tribunal, which was partly
allowed on 13.10.2005 and the ground
raised by assessee that the Assessing
Officer not having issued any notice
under Section 143(2) of the Act in block
assessment which was mandatory, was
turned down, and thus, the present appeal.

5. Before proceeding, it would be
necessary to have a glance of provisions
of Section 143(2) and Section 158BC of
the Act.

"143. (1).....................

(2) Where a return has been
furnished under section 139, or in
response to a notice under sub-section (1)
of section 142, the Assessing Officer or
the prescribed income-tax authority, as
the case may be, if, considers it necessary
or expedient to ensure that the assessee
has not understated the income or has not
computed excessive loss or has not underpaid the tax in any manner, shall serve on
the assessee a notice requiring him, on a
date to be specified therein, either to
attend the office of the Assessing Officer
or to produce, or cause to be produced
before the Assessing Officer any evidence
on which the assessee may rely in support
of the return:

Provided that no notice under
this sub-section shall be served on the
assessee after the expiry of six months
from the end of the financial year in
which the return is furnished.]

(3)...........................

158BC. Where any search has
been conducted under section 132 or
1272 INDIAN LAW REPORTS ALLAHABAD SERIES
books of account, other documents or
assets are requisitioned under section
132A, in the case of any person, then,-

(a) the Assessing Officer shall-

(i) ..........

(ii) ............

(b) the Assessing Officer shall
proceed to determine the undisclosed
income of the block period in the manner
laid down in section 158BB and the
provisions of section 142, sub-sections (2)
and (3) of section 143, [section 144 and
section 145] shall, so far as may be,
apply;

(c) ............

(d) ............"

6.

Counsel
for
the
assessee
submitted that Tribunal had wrongly held
that full opportunity was afforded to
assessee to substantiate his claim, thus,
the want of issue of notice under Section
143(2) of the Act on the part of Assessing
Officer was only a procedural error to be
cured by suitable directions, and no
prejudice was caused to the assessee.

7. He further submitted that the
notice under Section 143(2) of the Act
was mandatory in block assessment
proceedings held under Section 158BC of
the Act and non-issuance of such notice
goes to root of the case. He relied upon a
decision of the Apex Court in Assistant
Commissioner
of
Income-Tax
and
another vs. Hotel Blue Moon, [2010] 321
ITR 362 (SC). Relevant portion relied
upon is extracted below:-

"We may now revert back to
section 158BC(b) which is the material
provision
which
requires
our
consideration. Section 158BC(b) provides
for enquiry and assessment. The said
provision reads "that the assessing officer
shall
proceed
to
determine
the
undisclosed income of the block period in
the manner laid down in Section 158BB
and the provisions of section 142, subsections (2) and (3) of section 143, section
144 and section 145 shall, so far as may
be, apply." An analysis of this sub-section
indicates that, after the return is filed, this
clause enables the Assessing Officer to
complete the assessment by following the
procedure like issue of notice under Sections
143(2)/142 and complete the assessment
under Section 143(3). This section does not
provide for accepting the return as provided
under Section 143(1)(a). The Assessing
Officer has to complete the assessment under
section 143(3) only. In case of default in not
filing the return or not complying with the
notice under Sections 143(2)/142, the
Assessing Officer is authorized to complete
the assessment ex parte under Section 144.
Clause (b) of Section 158BC by referring to
Section 143(2) and (3) would appear to
imply that the provisions of section 143(1)
are excluded. But Section 143(2) itself
becomes necessary only where it becomes
necessary to check the return, so that where
block return conforms to the undisclosed
income inferred by the authorities, there is
no reason, why the authorities should issue
notice under Section 143(2). However, if an
assessment is to be completed under Section
143(3) read with section 158BC, notice
under Section 143(2) should be issued within
one year from the date of filing of block
return. Omission on the part of the assessing
authority to issue notice under Section
143(2) cannot be a procedural irregularity
and the same is not curable and, therefore,
the requirement of notice under Section
143(2) cannot be dispensed with. The other
important feature that requires to be noticed
is that the Section 158BC(b) specifically
refers to some of the provisions of the Act
which requires to be followed by the
1 All. Chandrabhan Vs. Commissioner of Income Tax-I , Agra
1273
Assessing Officer while completing the block
assessments under Chapter XIV-B of the Act.
This legislation is by incorporation. This
section even speaks of sub-sections which
are to be followed by the Assessing Officer.
Had the intention of the Legislature been to
exclude the provisions of Chapter XIV of the
Act, the Legislature would have or could
have indicated that also. A reading of the
provision would clearly indicate, in our
opinion, if the Assessing Officer, if for any
reason, repudiates the return filed by the
assessee in response to notice under Section
158BC(a), the Assessing Officer must
necessarily issue notice under Section 143(2)
of the Act within the time prescribed in the
proviso to Section 143(2) of the Act. Where
the Legislature intended to exclude certain
provisions from the ambit of section
158BC(b) it has done so specifically. Thus,
when section 158BC(b) specifically refers to
applicability of the proviso thereto it cannot
be excluded. We may also notice here itself
that the clarification given by Central Board
of Direct Taxes in its circular No.717 dated
August 14, 1995, has a binding effect on the
Department, but not on the court. This
circular clarifies the requirement of law in
respect of service of notice under sub-section
(2) of section 143 of the Act. Accordingly, we
conclude that even for the purpose of
Chapter XIV-B of the Act, for the
determination of undisclosed income for a
block period under the provisions of section
158BC, the provisions of Section 142 and
sub-sections (2) and (3) of section 143 are
applicable and no assessment could be made
without issuing notice under Section 143(2)
of the Act."

8. He further relied upon a decision
of Division Bench of this Court in case of
Virendra
Dev
Dixit
vs.
Assistant
Commissioner of Income-Tax (2010) 41
DTR (All.) 43.

9. Per contra, counsel for the Revenue
submitted that in proceedings under Section
158BC, there is no requirement of a notice to
be issued under Section 143(2), as issuance of
notice in block assessment under Section
158BC is separately prescribed. He also
submitted that in case of search and seizure
under Section 132 and in case of requisition of
books of accounts under Section 132-A, the
Assessing Officer is left with no discretion but
to proceed with block assessment and
procedure has been prescribed in Chapter
XIV-B of the Act, while in ordinary
assessment proceedings as envisaged under
Chapter XIV of the Act, the notice under
Section 143(2) is essential for production of
material by the assessee.

10. We have heard Sri Ashish Bansal,
learned counsel for the appellant-assessee and
Sri Manu Ghildyal, learned counsel for the
Revenue and perused the material on record.

11. The question under consideration
is as to whether issuance of notice under
Section 143(2) is mandatory for making
assessment under Section 158BC. The
issue involved is no more res-integra and
is covered by the decision of Apex Court
in case of Assistant Commissioner of
Income-Tax and another vs. Hotel Blue
Moon (supra), which has been followed
by Division Bench of this Court in case of
Virendra Dev Dixit (supra).

12. Counsel for the Revenue very
fairly conceded that the matter stands
covered by the decision of Apex Court in
case of Hotel Blue Moon (supra).

13. After having considered the case
and perusal of record, we are of the view
that the case of the assessee is covered by
the decision of the Apex Court in case of
Assistant Commissioner of Income-Tax
1274 INDIAN LAW REPORTS ALLAHABAD SERIES
and another vs. Hotel Blue Moon
(supra), as Assessing Officer did not issue
notice as contemplated under Section
143(2) of the Act in block assessment
proceedings under Section 158BC, which
was mandatory and non service thereof is
fatal.

14. The order of the Tribunal dated
13.10.2005 as far as non-issuance of
notice under Section 143(2) of the Act is
set aside.

15. The appeal is allowed. The
question of law, therefore, is answered in
favour of the assessee and against the
Revenue.
---------
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 25.11.2017

BEFORE
THE HON'BLE BALA KRISHNA NARAYANA, J.
THE HON'BLE ARVIND KUMAR MISHRA-I, J.

Criminal Appeal No. 1964 OF 1983

Harish Chandra ...Appellant (In Jail)
Versus
State ...Respondent

Counsel for the Appellant:
Sri A.D. Giri, Sri Dharmendra Singhal, Sri
Pankaj Kr. Tyagi, Sri Pankaj Singh, Sri
R.S. Sengar.

Counsel for the Respondent:
D.G.A., Sri Vinai Singh.

A. Authenticity of the Delay Dying
Declaration
and
suspicion
(Dying
Declaration under Section 32 (1) Indian
Evidence Act.

In dying declaration was recorded by the
doctor
in
dying declaration deceased
indicate name of accused- appellant. But
unfortunately another report typed out
and
sent
to
the
police
station
by
registered post (Para 27). The dying
declaration was not recorded before the
Magistrate, although the deceased had
remained alive for about 10 days after
being shot and there was ample time for
doctor who claims to have recorded the
dying declaration of the deceased to have
called the Magistrate rather than recording
the same himself without there being any
evidence on record showing that the
deceased's
condition
at
the
time
of
recording of her alleged dying declaration
was so serious that there was no time to
call the Magistrate for recording her dying
declaration(Para 37). If the deceased had
actually identified accused-appellant she would
have certainly disclosed his name to informant.
(Para 39)

Criminal Appeal allowed. (E-2)

(Delivered by Hon'ble Bala Krishna
Narayana, J.
& Hon'ble Arvind Kumar Mishra-I, J.)

1. Heard Sri Pankaj Tyagi, learned
counsel for the appellant, Sri Anil Pathak,
A.G.A. 1st, assisted by Sri J.K. Upadhyay
and
Km.
Meena,
learned
A.G.As.
appearing on behalf of the State.

2. This appeal has been preferred by the
accused-appellant Harish Chandra against the
judgment dated 20.08.1983 and order dated
22.08.1983 passed by Shri S.K. Srivastava-II
Additional Sessions Judge, Muzaffarnagar in
Sessions Trial No. 330 of 1982 (State Vs.
Harish Chandra) arising out of Case Crime
No. 40 of 1982 at Police Station Thana
Bhawan, District Muzaffarnagar by which the
appellant has been convicted and sentenced to
imprisonment for life under Section 302 I.P.C.

3. The prosecution case as emerging
out from the material on record is as
follows
: