CIT vs. Mudra Nanavati (Bombay High Court)

DATE: (Date of pronouncement)
DATE: September 11, 2009 (Date of publication)

Click here to download the judgement (mudra_nanavati_high_court_supreme_appar_158BC.pdf)

Non / belated issue of s. 143 (2) notice renders block assmt order void

S. 158BC provides that in determining the undisclosed income, the provisions of s. 143 (2) shall apply “so far as may be”. S. 143 (2) provides that a notice shall not be issued after the expiry of 12 months from the end of the month in which the return is furnished. The question arose whether the non-issue or belated issue of s. 143 (2) notice renders the block assessment order ab initio void. In Mudra Nanavati, the Tribunal held that the issue of the s. 143 (2) notice within the stipulated period was mandatory and that failure to do so renders the block assessment order void. This decision has been approved by the High Court following Scindia HUF where it was held that non-issue of s. 16 (2) notice of the W. T. Act rendered the s. 17 order invalid.

See Also: The decision of the Tribunal in Supreme Appar (included in the file) & Jayprakash Mangtani 22 DTR 320 (Ahd.)
Note: The Special Bench has taken a contrary view in Nawal Kishore & Sons 87 ITD 407 (Lucknow) (SB) which was not followed after discussion in Aurangabad Holiday Resorts 118 ITD 1 (Pune)
See Also: Kuber Tobacco Products 18 DTR 1 (Del.) (SB): S. 292BB inserted by the F. A 2008, w.e.f. 1.4.2008 has no retrospective operation