INCOME TAX ACT, 1961

--Search and seizure--Validity of block assessment orderNon-issuance of notice under section 143(2)--Assessee challenged the validity of block assessment order on the ground that no notice under section 143(2) was served upon him and his case was covered by judgment in Asstt. CIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC) : 2010 TaxPub(DT) 1434 (SC). Revenue argued that issuance of notice under section 143(2) was not mandatory and non-issuance and non-service of such notice would not affect the validity of block assessment oder. Further, it was argued on behalf of revenue that section 292BB, a deeming provision to validate the notice in certain circumstances was not considered in the Asstt. CIT v. Hotel Blue Moon (supra). Held: The Supreme Court in Hotel Blue Moon (supra) held that the issue of notice under section 143(2) is mandatory, section 158BC, dealing with block assessments, makes such notice the very foundation for jurisdiction. Such notice is required to be served on the person, who is found to have undisclosed income. The requirement of notice under section 143(2) cannot be dispensed with. In the present case, the Tribunal had returned the findings that the notice under section 143(2) was admittedly not issued. The assessing authority thus did not have jurisdiction to proceed further and make assessment. [Para 7] Further, non-consideration of section 292BB, which is rule of evidence and a deeming provision to validate the notice in certain circumstances, will not have any effect. On the judgment in Hotel Blue Moon (supra). Therefore, block assessment order passed, without notice under section 143(2) was invalid. [Para 8]