Actual service of notice under Section 143(2) must occur within the statutory timeframe; mere issuance is insufficient for legal compliance, thus invalidating assessment proceedings.

JUDGMENT:

Suddala Chalapathi Rao, J.

1. The present batch of (18) appeals is filed against the common order dt.15.02.2008 passed by the Income Tax Appellate Tribunal (hereinafter referred to as “the ITAT”) in respective appeals.

2. The details of the eighteen (18) appeals, the orders impugned, the assessment years involved, names of the appellants and the respondents, for convenience, are reproduced hereunder:

3. As all these eighteen appeals are similar in nature, arising out of identical factual circumstances and involving common questions of law emanating from eighteen separate assessment orders, which were carried in appeal before the Commissioner of Income Tax (Appeals) (for short ‘the CIT(A)’) and disposed of by separate orders, and since, notwithstanding minor variations in reasoning, the parties and the issues for consideration remained common and identical in all the cases, all the appeals have been heard analogously treating ITTA No.252 of 2008 as the lead case and are being disposed of by this common order.

Brief facts:

4. The brief facts of the case are that the appellants are individuals assessees deriving income from house property and such other sources of income. Further, on 04.08.2000, the Income Tax Department conducted search and seizure operations under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) in the business premises of M/s Urvasi Enterprises (a partnership firm), M/s Urvasi Builders(an association of persons), M/s Sheeshamahal Enterprises Pvt. Ltd. (a company) and M/s The Commercial and Industrial Finance (P) Ltd. (a Company). Though no search warrant was issued and no search was conducted in the name of the respective appellants, however, the Assessing Officer initiated action on the appellants basing on the incriminating material alleged to have found in the search by issuing a notice under Section 158-BD of the Act on 19.12.2000 and assessed the undisclosed income pertaining to the block period of 10½ years i.e., from 01.04.1992 to 04.08.2000 (the date of search).

5. Thus, the block period consisted of assessment period of 10 assessment years from 1991-92 to 2000-01 and also for the broken period from 01.04.2000 to 04.08.2000. Consequent upon search, the respective appellants filed return in the prescribed form in Form No.2B on 09.01.2001 for the block period admitting ‘NIL’ undisclosed income under Section 158-B(b) of the Act. The Assessing Authority after issuance of notice under Sections 143(2) and 142(1) of the Act, taking into account all the relevant evidence, determined the undisclosed income for the block period as Rs.1,11,120/- (minor variations of amounts in other appeals) under Section 158-BC(c) r/w Section 143(3) and determined tax thereupon including surcharge and the assessment orders in the respective batch of appeals passing orders under Section 158-BD r/w 158-BC on 31.12.2002.

6. Aggrieved thereupon, all the assessees have filed appeals before the CIT(A) and the all the said appeals were dismissed by the CIT(A) on 21.10.2003, but however, the CIT(A) enhanced the undisclosed income and directed the Assessing Authority to take the said undisclosed income and collect the tax thereupon. Subsequently, all the assessees challenged the said appellate orders passed by the CIT(A) before the learned ITAT.

7. The brief contentions of the assessee before the Tribunal were that the CIT(A) has no jurisdiction to enhance the assessed