Anupama Chand Vs DCIT (Telangana High Court)
Core Issues : The principal controversy before the Telangana High Court in this batch of appeals was whether block assessment proceedings initiated under Section 158BD of the Income Tax Act, 1961 could survive when the notice under Section 143(2), though issued within the prescribed period, was admittedly served on the assessees beyond the statutory limitation. Ancillary issues relating to the validity of proceedings under Section 158BD, requirement of satisfaction, and limitation for completion of block assessment also arose, though the Court ultimately confined itself to the core jurisdictional defect concerning Section 143(2).
Facts of the Case The assessees were individual taxpayers deriving income primarily from house property and other sources. A search and seizure operation under Section 132 was conducted on 04 August 2000 in the case of certain business entities, namely M/s Urvasi Enterprises, M/s Urvasi Builders, and related concerns. No search warrant was issued in the names of the present assessees, nor was any search conducted at their premises. However, based on material allegedly found during the search, proceedings were initiated against the assessees under Section 158BD by issuing notice dated 19 December 2000.
The block period covered ten assessment years from 1991-92 to 2000-01 along with the broken period from 01 April 2000 to 04 August 2000. The assessees filed block returns in Form 2B on 09 January 2001 declaring nil undisclosed income. Subsequently, notice under Section 143(2) was issued by the Assessing Officer on 29 January 2002, but the same was admittedly served on the assessees only on 04 February 2002. The assessments were completed on 31 December 2002 under Section 158BD read with Sections 158BC and 143(3), determining undisclosed income for the block period.
