Issue of S.143(2) notice is mandatory for block assessment proceedings. Disclosed items cannot be assessed in block assessment. Circulars are binding on the revenue

Chapter XIV-B provides that where a search u/s 132 is conducted, the AO shall determine the undisclosed income for the block period. S. 158 BC(b) provides that in making the block assessment the provisions of s. 143 (2) shall “so far as may be, apply”. The Supreme Court had to consider whether a block assessment order passed without service of notice on the assessee u/s 143(2) within the prescribed period of time was valid. HELD, deciding in favour of the assessee: (i) While notice u/s 143 (2) is not necessary if the AO accepts the return as filed, the notice within the prescribed time is ...