Income Tax Appellate Tribunal - Ahmedabad
Rakesh S. Mardia vs Dy. Cit on 24 October, 2000
Equivalent citations: (2002)74TTJ(AHD)836
ORDER
R.K. Bali, A.M. These three appeals by the assessees who are real brothers and directors in various companies of Mardia Group involve common points and are, therefore, disposed of by a common order for the sake of convenience.
2. All the three brothers viz. Rakesh S. Mardia, Rajeev S. Mardia and RasikIal S. Mardia who are Directors in Mardia group of companies derive income from salary, share from partnership firm, dividend, interest, etc. There was a search and seizure operation at the residential premises of all the assessees on 9-1-1997, when certain papers, jewellery, etc., were seized. Subsequently, the assessees were served with notices under section 158BC of the Income Tax Act, 1961, which required them to file returns of total income including undisclosed income for the block period comprising of earlier ten previous years and part of the year from 1-4-1996 to 9-1-1997. The assessees accordingly filed their returns for the block period as under :
Name of assessee Date of return filed Total income declared Rakesh S. Mardia 21-5-1997 Rs. 4,73,045 Rajeev S. Mardia 21-5-1997 Rs. 4,73,045 Rasik S. Mardia 21-5-1997 Rs. 8,33,325 2.1. Thereafter, the assessing officer issued notices under section 143(2) of the Act on 15-12-1998, for the first time requiring the assessees to attend the hearing on 18-12-1998, and on the basis of information gathered in the course of assessment proceedings for the block period, the assessing officer determined the total income of these three assessees by passing orders under section 158BC/143(3) on 29-1-1999 as under :
Rakesh S. Mardia Rs. 4,23,01,589 Rajeev S. Mardia Rs. 6,63,41,603 Rasik S. Marda Rs. 3,58,86,901 Which inter alia included various additions which were challenged in appeals by the assessees before the learned Commissioner (Appeals). One of the grounds taken by the assessees before the Commissioner (Appeals) was validity of the assessment framed by the assessing officer relating to the block assessment years which was challenged by the assessees by taking a specific ground as under :
"That the assessing officer has erred in making block assessment without having jurisdiction over the same, on account of issuance of notice under section 143(2) of the Act beyond the prescribed time-limit of one year provided in the proviso to section 143(2) of the Act."
2.2. Besides this, the assessees have also challenged various additions made by the assessing officer on account of undisclosed investments for the acquisition of jewellery, valuable items found at the time of search, interest not accounted for, etc. The learned Commissioner (Appeals) after considering the submissions of the assessees : dismissed the ground with regard to the validity of the assessments framed by the assessing officer under section 158BC read with section 143(3) for the reasons given in detail in the impugned orders but he allowed partial relief to the assessee in respect of various additions made under section 69A/69B/69C of the Act and other additions vide his separate orders dated 10-3-2000, 6-3-2000 and 3-3-2000 in the cases of Rakesh S. Mardia, Rajeev S. Mardia and RasikIal S. Mardia respectively.
3. Against the above separate orders of the Commissioner (Appeals), the assessee have filed these three appeals by taking the following substantial grounds :
IT(SS)A No. 30/Ahd/2000 in the case of Rakesh S. Mardia (1) The learned Commissioner (Appeals) erred in law and on facts in rejecting the assessee's contention founded on the ground that the notice under section 143(2) was invalid and without jurisdiction. He erroneously rejected the claim of the assessee that provisions of section 143(2) read with proviso appended thereto apply fully to the block assessment proceedings and as a corollary and consequence, notice under section 143(2) of the Act issued by the learned assessing officer beyond the period of one year must be held to the without jurisdiction. Accordingly, it was prayed that the block assessment proceedings may kindly be quashed.
(2) The Commissioner (Appeals) has erred in retaining an addition of Rs. 49,000 out of Rs. 66,350 made by the assessing officer on account of valuable items as undisclosed income for the assessment year 1997-98.
(3) The Commissioner (Appeals) has erred in not allowing rebate under section 88 of the Act.
(4) The Commissioner (Appeals) has erred in law and on facts in not quashing the initiation of penalty proceedings under section 158BFA(2)/158BFA(3).
IT(SS)A No. 31/Ahd/2000 in the case of Rajeev S. Mardia (1) The learned Commissioner (Appeals) erred in law and on facts in rejecting the assessee's contention founded on the ground that the notice under section 143(2) was invalid and without jurisdiction. He erroneously rejected the claim of the assessee that provisions of section 143(2) read with proviso appended thereto apply fully to the block assessment proceedings and as a corollary and consequence, notice under section 143(2) of the Act issued by the learned assessing officer beyond the period of one year must be held to be without jurisdiction. Accordingly, it was prayed that the block assessment proceedings may kindly be quashed.
(2) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 1,74,632 on account of expenditure of furnishing of the residential house.
(3) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 3, 11, 000 on account of diamond jewellery belonging to the assessee's wife by treating it as undisclosed income of the assessee.
(4) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 15,000 on account of furniture items treated as undisclosed income for assessment year 1997-98.
(5) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 1,16,000 out of Rs. 1,43,000 made by the assessing officer on account of valuable items as undisclosed income of the assessee for assessment year 1997-98.
(6) The Commissioner (Appeals) has erred in law and on facts in not allowing rebate of the Act.
(7) The Commissioner (Appeals) has erred in law and on facts in not quashing initiation of penalty proceedings under section 158BFA(2)/158BFA(3).
IT(SS)A No. 32/Ahd/2000 in the case of RasikIal S. Mardia (1) The learned Commissioner (Appeals) erred in law and on facts in rejecting the assessee's contention founded on the ground that the notice under section 143(2) was invalid and without jurisdiction. He erroneously rejected the claim of the assessee that provisions of section 143(2) read with proviso appended thereto apply fully to block assessment proceedings and as a corollary and consequent notice under section 143(2) of the Act issued by the learned assessing officer beyond the period of one year must be held to be without jurisdiction. Accordingly, it was prayed that the block assessment proceedings may kindly be quashed.
(2) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 59,229 on account of gold jewellery treating it as undisclosed income of the assessee.
(3) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 2,34,650 on account of silver utensils and other items of silver by treating as undisclosed income of the assessee.
(4) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 73,744 on account of diamond jewellery by treating it undisclosed income of the assessee.
(5) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 1,50,093 on account of interest income on primary issue loans as undisclosed income of the assessee for assessment year 1995-96.
(6) The Commissioner (Appeals) has erred in sustaining an addition of Rs. 74,000 or account of valuable items as undisclosed income of the assessee for assessment year 1997-98.
(7) The Commissioner (Appeals) has erred in law and on facts in not allowing rebate under section 88 of the Act.
(8) The Commissioner (Appeals) has erred in law and on facts in not-quashing initiation of penalty proceedings under section 158BFA(2)/158BFA(3).
4. Before us the learned authorised representative of the assessees while arguing ground of appeal No. (1) which is common in all the three appeal No. (1) that the assessments framed by the assessing officer under section 158BC read with section 143(3) for the block period is without jurisdiction and time-barred. In support of the ground taken, the learned authorised representative of the assessee submitted the following undisputed facts:
Date 9-1-1997 Date of search.
3-4-1997 Issue of notice under section 158BC requiring the assessees to file returns of income for the block period.
21-5-1997 Returns of income filed.
15-12-1998 Notice issued under section 143(2).
29-1-1999 Assessments framed.
4.1. It was pleaded that in view of the fact that the assessees have filed the returns for the block period on 21-5-1997, in response to notices under section 158BC dated 3-4-1997 and the assessing officer having issued first notice under section 43(2) on 15-12-1998 which is more than one year from the date of filing, the returns, which is not permitted in terms of proviso to section 143(2), the assessments made in consequence upon issue of such notice under section 143(2) must be held to be invalid and consequently without jurisdiction. Reliance was placed on the decisions of the Hon'ble Supreme Court in the cases of CIT v. Kurban Hussain Ibrahimji Mithiborwala (1971) 82 ITR 821 (SC) and Y. Narayana Chetty v. ITO (1959) 35 ITR 388 (SC) as well as CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC). It was submitted that the reliance of the assessing officer as well as Commissioner (Appeals) on the non obstante clause in section 158BA(1) does not lead to a conclusion that the proceedings of Chapter XIV-B are independent of the provisions of Chapter XIV inasmuch as till there is a conflict between the two sets of provisions so that they cannot coexist, the operation of Chapter XIV cannot be curtailed merely because of non obstante clause. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of R.S. Raghunath v. State of Karnataka AIR 1992 SC 81.
4.2. It was further submitted that the phrase "so far as may be" only means that if the context specifically excludes application of some rule/provision while interpreting another provision, the same may be excluded. But if the same can be read as an addition to the normal provision, the same must also be read while interpreting the other provision. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of R. Dalmia & Anr. v. CIT (1999) 236 ITR 480 (SC). Accordingly, it was pleaded that the usage of the phrase "so far as may be" in section 148(1) and section 158BH must receive the same interpretation being a part of the same statute. Accordingly, it was pleaded that the impugned assessments having been framed in pursuance of notice under section 143(2) which was admittedly issued beyond the period of one year from the date of filing the returns by the assessees, is without jurisdiction and is required to be quashed. Reliance was placed on the Board's Circular No. 717, dated 14-8-1995 reported in (1995) 215 ITR (St) 70 in para 39.3 (e) 'Procedure for making Block Assessment'it is mentioned that "The assessing officer shall proceed to determine the undisclosed income of the block period and provisions of section 142, sub-sections (2) and (3) of section 143 and section 144 shall apply accordingly". Reliance was also placed on the decision of the Ahmedabad Bench of the Tribunal in the case of Maxima Systems Ltd. v. Dy. CIT (1999) 106 Taxman 133 (Ahd-Trib) and the decision of the Cochin Bench of the Tribunal in the case of Sree Murugan Trading Co. v. Asstt. CIT (ITA No. 901/Coch/1992, dated 29-12-1997).
5. The learned Departmental Representative supported the orders of the Commissioner (Appeals) and pleaded that Chapter XIV-B prescribes a special procedure for the purpose of completion of block assessment and the non obstante clause with which section 158BA starts clearly indicates that Chapter XIV-B is a complete code in itself and sub-clause (b) of section 158BC clearly gives authority to an assessing officer to proceed to determine an undisclosed income of the block period in the manner laid down in section 158BB. Sections 158B, 158BA, 158BB and 158BC deal with the procedure to be followed for making the assessment. Section 158BC(b) merely states that the assessing officer shall proceed to determine an 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 and section 144 shall, so far as may be apply. Accordingly, it was submitted that the manner and procedure of block assessment has to be that of section 158BB and the reference to provisions of section 142, 143(2)/143(3) and section 144 are only secondary. It was submitted that this merely means that the assessee is required to be heard and given an opportunity to support the income declared by him. It was pleaded that there is no reference to section 158BC in section 143(2) and also the proviso appended to it. Accordingly, it was pleaded that the proviso to section 143(2) lays down time-limit for scrutinizing the return cannot be held applicable to a return filed under section 158BC.
5.1. It was further submitted that section 158BE(1)(a) lays down time-limit of one year for completion of assessment, therefore, insertion of clause (b) of section 158BE with effect from l-1-1997, and as such all the assessments were to be completed within one year, and this itself makes proviso to section 143(2) redundant. It was further submitted that in any case section 292B clearly lays down that an assessment cannot be vitiated and held bad in law merely on the ground of some technical defects in the notice. Accordingly, it was submitted that a reference to sub-section (2) of section 143 of the Act in clause (b) of section 158BC was only for the purpose of facilitating the determination of undisclosed income of the block period and as such only a part of the procedure to facilitate the assessment. It was submitted that the object behind insertion of proviso to section 143(2) has been given in para 5.13 of the Explanatory Notes on the provisions of Direct Tax Laws (Amendment) Act, 1987 in CBDT Circular No. 549, dated 31-10-1989 which reads as under :
"A proviso to sub-section (2) provides that a notice under the sub-section can be served on the assessee only during the financial year in which the return is furnished or within six months from the end of the month in which the return is furnished, whichever, is later. This means that the department must serve the said notice on the assessee within this period, if a case is picked up for scrutiny. It follows that if an assessee, after furnishing the return of income does not receive a notice under section 143(2) from the department within the aforesaid period, he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return."
5.2. Accordingly, it was pleaded that the contention of the learned authorised representative of the assessee that proviso to section 143(2) applies in the case of assessment proceedings under XIV-B is not in order and the decisions relied upon by the learned authorised representative of the assessees are not relevant to the assessee case as those have been given in the context of issue of a notice under, section 148 for reassessment proceedings where the courts have held that notice under section 148 cannot be regarded a mere procedural requirement. It was pleaded that the issue of notice under section 143(2) in the case of the assessees is only a part of the procedure for making assessment in search cases under Chapter XIV-B and as such there is no merit in the grounds raised by the assessees that the assessments framed by the assessing officer for the block period are required to be quashed. Accordingly, it was pleaded that the learned Commissioner (Appeals) was perfectly justified in the facts and circumstances of the case to hold that the assessments framed by the assessing officer were valid in law.
6. We have considered the rival submissions and have also gone through the orders passed by the assessing officer as well as Commissioner (Appeals). The relevant provisions of the Income Tax Act which have bearing on the specific ground with regard to the validity of assessments framed by the assessing officer are as under :
"Section 143(2)Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the assessing officer shall, if he 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, serve on the assessee is notice requiring him, on a date to be specified therein either to attend his office or to produce, or cause to be produced there, 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 twelve months from the end of the month in which the return is furnished.
Section 158BC(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 and section 144 shall, so far as may be, apply."
6.1. The crux of the matter which is required to be adjudicated is whether proviso to section 143(2) laying down limitation for issue of notice for assessments framed under section 158BC read with section 143(3) is applicable or not. In this context it will be useful to refer to the decision of the Hon'ble Supreme Court in the case of R. Dalmia & Anr. v. CIT (supra) on which reliance was placed on behalf of the assessees and where the expression "so far as may be" have been construed. In that case the assessee had submitted that the provisions of section 144B relating to the forwarding of draft assessment order to Inspecting Assistant Commissioner be confined only to assessment made under section 143 and not to reassessment made under section 147/148. The Hon'ble Supreme Court rejected the assessee's contention by observing as under : (Headnote p 480) "A notice having been issued under section 148, the procedure set out in the sections subsequent to section 139 has to be followed "so far may be". Section 144B is a procedural provision. It cannot be excluded by reason of the use of words "so far as may be". Nor is there any other good reason to exclude it from the procedure to be followed subsequent to a notice under section 148.
At p 486 it was further observed as under :
"Section 147 empowers an Income Tax Officer to assess or reassess income chargeable to tax that has escaped assessment in any assessment year. He may do so subject to the provisions of sections 148 to 153. Before making an assessment or reassessment under section 147, the Income Tax Officer must, by reason of the provisions of section 148, serve on the assessee a notice to file a return of his income 'and the provisions of the Act shall', so far as may be, apply accordingly as if the notice were a notice issued under section 139(2). Section 151 says that no notice under section 148 may be issued by the Income Tax Officer without the sanction of a higher authorities as stated therein.
After a notice to file a return has been issued under section 139 a return must be filed by the assessee signed in the manner prescribed by section 140. An inquiry must then be held as required by section 142 and an assessment be made under section 143 ........................
By reason of section 148, after a notice there under has been served on the assessee containing the requirements which must be included in a notice under section 139(2), 'the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section' What this implies is, in our view, clear. Even after a notice is issued under section 148, if the Income Tax Officer proposes to make a variation in the income returned pursuant to such notice which is prejudicial to the assessee and, the amount of such variation exceeds the amount fixed by the Board, the Income Tax Officer must forward a draft of the proposed order of assessment to the assessee ...........
If, therefore, the procedure that is prescribed by section 144B is to be applied even to assessments and reassessments under section 147 and, as we have stated, we think it must, having regard to the terms of the provisions of the Act hereinbefore referred to as also because the provisions of section 144B are intended to safeguard the interest of the assessee, the extended period of limitation prescribed by Explanation 1(iv) to section 153 must apply.
It was submitted on behalf of the assessee that the provisions of section 144B were not applicable to assessments and reassessment under section 147 because section 144B stated that it applied only to 'an assessment to be made under sub-section (3) of section 143'. The submission cannot be accepted because the words we have quoted from section 148 cannot be ignored. A notice having been issued under section 148, the procedure set out in the sections subsequent to section 139 has to be followed 'so far as may be'. Section 144B is a procedural provision. It fits into the procedural scheme as hereinbefore noted and, therefore, it cannot be excluded by reason of the use of the words 'so far as may be'. Nor is there any other good reason to exclude it from the procedure to be followed subsequent to notice under section 148.
..................... On a construction of the most pertinent provisions, therefore, we are of the view that section 144B applies to assessments and reassessments under section 147 and that, therefore, the extended period of limitation provided by Explanation 1(iv) of section 153 is available for making such assessments and reassessments. "
6.2. In view of the above it is clear that the legislature when enacts a new provision or introduces a new provision in the existing statute, it shall make provision for applicability of the existing or old provisions to the new sections either wholly or with modifications. Therefore, unless the provisions are modified specifically, the existing provisions as engrafted in the new provisions have got to be read as a whole and no part of the existing provisions can be ignored. Thus, when the legislature has used the words "so far as may be, apply" the entire provisions referred to have to be taken into consideration without any modifications while interpreting section 158BC(b) unless modifications are specifically mentioned in the new provisions. The above conclusion can be further supported by the following instances :
(A) In Explanation to section 158BB(1) it is inter alia mentioned that while aggregating the total income or loss for each previous year, no effect is required to be given to set off of brought forward loss under Chapter VI and unabsorbed depreciation under section 32(2). This would mean that the total income as computed in accordance with Chapter IV stands modified to the extent indicated in the said Explanation.
(B) In sub-section (2) of section 158BB it is mentioned thus :
"In computing the undisclosed income of the block period, the provisions of sections 68,69, 69A, 69B and 69C shall, so far as may be, apply and references to "financial year" in those sections shall be construed as references to the relevant previous year falling in the block period including the previous year ending with the date of search or of the requisition.
It would be clear from the reading of the above sub-section that after the words "shall, so far as may be, apply" there is modification which lays down that the expression "financial year as used in the said sections shall be construed as reference to the relevant previous year falling in the block period." In other words, the expression "financial year" stands modified for the purpose of invoking provisions of sections 68 to 69C for the purpose of block assessment. It is important to note that there is no corresponding amendment in sections 68 to 69C of the Act. Therefore, the objection raised by the learned assessing officer and the learned Departmental Representative that in absence of any mention of section 158BC in section 143(2) the proviso is not applicable, is not tenable.
(C) In section 24(11) of the Wealth Tax Act, there is reference to section 255 of the Income Tax Act. The relevant provisions read as follows :
"(11) The provisions of sub-sections (1), (4) and (5) of section 255 of the Income Tax Act shall apply to the Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Income Tax Act."
Now in this case while engrafting the provisions of section 255 of the Income Tax Act, the legislature has specifically excluded applicability of sub-section (2) which deals with constitution of Bench, namely, that a Bench shall consist of one J.M. and one AM. Now the requirement that the Bench shall be constituted by one J.M. and one A.M. is not predicated for hearing of appeal under the Wealth Tax Act. (ii) Under sub-section (3) of section 255 there is a provision for appointment of Single Member for hearing of cases below Rs. 5 lakhs and also constitution of Special Bench which requires appointment of at least one J.M. and one A.M. on such Special Benches. These provisions did not find place in the Wealth Tax Act relating to appeal before the Tribunal.
(D) Under section 55A of the Act there is a provision relating to reference to Valuation Officer. In this section a reference is made to sub-sections (1) to (6) of section 16A and other related sections of Wealth Tax Act and the relevant provisions read as follows :
"And where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth Tax Act, 1957 (27 of 1957) shall, with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the assessing officer under sub-section (1) of section 16A of that Act.
"Explanation.In this section, Valuation Officer has the same meaning as in clause (r) of section 2 of the Wealth Tax Act, 1957 (27 of 1957). "
It may be noticed that some of the sub-sections of Wealth Tax Act do not find place under section 55A.
(E) In section 40A(5) the expression "salary" was modified specifically in the following manner by virtue of Explanation 2 to the said section (as it stood then).
"Explanation2In this sub-section 'salary' has the meaning assigned to it in clause (1) read with clause (3) of section 17 subject to the following modifications, namely :
(1) in the said clause (1), the words "perquisites" occurring in sub-clause (iv) and the whole of sub-clause (vii) shall be omitted;
(2) in the said clause (3), the reference to 'assessee' shall be construed as references to 'employee or former employee' and the references to 'his employer or former employer' and 'an employer or former employer' shall be construed as references to 'the assessee'".
7. These illustrations make it very clear that the legislature engrafts or incorporates the existing provisions to the new provisions either wholly or with modifications. Now if we look the facts of the case before us, there is no such modifications relating to the non-applicability of proviso to section 143(2) which lays down the time-limit for issuing notice. Therefore, the proviso to section 143(2) has got to be read along with section 143(2) and ignoring the proviso which lays down the period of limitation is not predicated. Accordingly, it has to be held that the assessments as made by the assessing officer is barred by limitation.
8. It is seen that the learned assessing officer has inter alia stated that proviso to section 143(2) of the Act has been rendered redundant and unless in view of the time-limit laid down under section 158BE(1)(a) of the Act. Now the expression "so far as may be, apply" has been interpreted by the Hon'ble Supreme Court in the case of R. Dalmia & Anr. v. CIT (supra). The Hon'ble Supreme Court in an earlier decision in the case of Banarsi Debi & Anr. v. ITO (1964) 53 ITR 100 (SC) at page 101 inter alia held as follows :
"It is a well-established principle of construction of statutes that, where a word or phrase of doubtful meaning has received a clear judicial interpretation, a subsequent statute which incorporates the same word or the same phrase in a similar context must be construed so that the word or phrase is interpreted according to the meaning that has previously been assigned to it."
8.1. Therefore, in the absence of any specific provision restricting the scope of section 143(2), the said section has to be applied along with proviso and the case of assessing officer for non-applicability of proviso will not survive. Further we may point out that it is not open to the authority acting under the provisions of the statute to state that proviso to section 143(2) is redundant. The authorities working under the provisions of the Act which may be the learned assessing officer, Commissioner (Appeals) on even the Tribunal are all creatures of the statute and they are not permitted to hold that any of the provisions of the Act are either ultra vires or redundant as per the ratio of the decision of the Supreme Court in the case of K.S. Venkataraman & Co. (P) Ltd. v. State of Madras (1966) 60 ITR 112 (SC).
9. As regards the reliance of the learned Departmental Representative on the provisions of section 292B is concerned which deals with the ignoring of technical defects, we may observe that omission to consider statutory provisions laying down the period of limitation cannot be equated with technical defects in the notice. In the present case in the contention raised by the learned authorised representative of the assessees is not that the notice is defective but a glaring omission of the assessing officer in ignoring or omitting to consider the statutory provisions viz. proviso to section 143(2) which lays down limit of one year for commencement of proceedings for the purpose of block assessment. Since the statutory notice as required under section 143(2) was not issued within the period of one year, as laid down in the proviso, the entire assessments as made by the assessing officer have been rendered barred by limitation. Therefore, taking into consideration the totality of the facts and circumstances of the case, we are of the opinion that as the assessing officer having failed to initiate assessment proceedings within the time-limit prescribed under proviso to section 143(2), the entire block assessments as made by the assessing officer must be held to be without jurisdiction and the assessments have to be quashed. We accordingly quash the assessments framed by the assessing officer in all the three cases.
10. Since we have quashed the assessment framed by the assessing officer on the legal ground, it is not considered fair and proper to adjudicate on various other grounds raised by the assessees in their respective appeals as it will be only of an academic nature and also will not be proper in view of the decision of the Nagpur Bench of the Tribunal in the case of Rahul Kumar Bajaj v. ITO (1999) 69 ITD 1 (Nag-Trib) (SB).
11. Before parting, we may point out that Chapter XIV and Chapter XIV-B operate in different planes relating to the assessments of undisclosed income. If on the basis of material found during the course of search it is gathered that the assessees have concealed the income by furnishing inaccurate particulars or by claiming fictitious expenditure in the regular books of account, then the proceedings can be reopened and assessments framed under Chapter XIV as per the provisions contained in that Chapter if the facts and circumstances of the case so justify in view of the decision of the Gujarat High Court in the case of N.R. Paper & Board Ltd. & Ors. v. Dy. CIT (1998) 234 ITR 733 (Guj).
12. In the result, all the three appeals are allowed.