MANDADA HEMALATHA,HYDERABAD vs. DCIT., CENTRAL CIRCLE-1(3), HYDERABAD

आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT: This appeal is by the Assessee is directed against the Order dated 06.03.2026 of learned CIT(A)-11, Hyderabad, for the assessment year 2022-2023.

4.1. The learned Authorised Representative of the Assessee has referred to the Judgment of Hon’ble Karnataka High Court in the case of CIT vs. Micro Labs Limited [2012] 348 ITR 75 (Karnataka) and submitted that the Hon’ble High Court has held that notice issued by the Assessing Officer u/sec.158BC of the Act calling upon the assessee to submit its return of income ‘within a period of 15 days’ is in violation of mandatory period of time as stipulated u/sec.158BC of the Act which provides a minimum period of 15 days and maximum period of 45 days for filing the return of income is invalid and would not confer any jurisdiction or authority. The Hon’ble High Court has also observed that consent or waiver does not confer jurisdiction, but the Jurisdiction is conferred by statute and an authority cannot assume jurisdiction only because the same has been consented to or the lack of jurisdiction has been waived by the assessee. He has further submitted that the Hon’ble High Court has also negated the contention of the Revenue that notice issued u/sec.158BC of the Act cannot be treated as invalid in view of provisions of sec.292B of the Act. He then referred to the Judgment of Hon’ble Gujarat High Court in the case of CIT vs. Amit K. Jain [2017] 79 taxmann.com 430 (Gujarat) and submitted that the Hon’ble High Court has also held that a notice issued by the Assessing Officer u/sec.158BC of the Act not giving clear 15 days which is the requirement under law is invalid. Thus, the learned Authorised Representative of the Assessee has submitted that the time to be granted in the notice as per the provisions of the Act is a mandatory condition and failure of the Assessing Officer to comply with the same renders the notice issued by the Assessing Officer as invalid and liable to be quashed. He has then relied upon the Judgment of Hon’ble Bombay High Court in the case of CIT vs. Ramsukh Motilal [1955] 27 ITR 54 (Bom.) and submitted that the Hon’ble High Court while considering the validity of the notice issued u/sec.34 of the Income Tax Act, 1922 corresponding to Sec.148 of the Income Tax Act, 1961 held that the notice must provide period not less than 30 days for filing the return and the notice issued by the Assessing Officer giving only 06 days to the assessee to make the return u/sec.34 of I.T. Act, 1922 corresponding to Sec.148 of the Income Tax Act, 1961, is bad in law. He has then relied upon the Judgment of Hon’ble Kerala High Court in the case of Cochin Plantations Ltd. vs. Inspection Assistant Commissioner [1994] 210 ITR 91 (Ker.) and submitted that the Hon’ble High Court has held that notice issued by the Assessing Officer u/sec.35 of Agriculture Income Tax and Sales Tax 1950 Act Kerala providing only 06 days’ time to file the return is invalid and unsustainable in law. He has then relied upon the Judgment of Hon’ble Karnataka High Court in the case of Sunil Kumar Sharma vs. DCIT [2022] 448 ITR 485 (Karnataka) and submitted that the Hon’ble High Court has reiterated its view by holding that the notice issued by the Assessing Officer u/sec.153C of the Act to the assessee who is a searched person is not maintainable. Thus, the learned Authorised Representative of the Assessee has submitted that the notice issued by the Assessing Officer u/sec.148 of the Act dated 12.03.2024 is invalid and liable to be quashed and consequently, the re-assessment order passed by the Assessing Officer is also liable to be set aside.

6.1. Thus, the assessee has raised the issue of validity of reopening of the assessment however, the learned CIT(A) has not given any specific finding on the issue and just given the reasons that despite issuing various notices, the assessee failed to submit any information to substantiate the grounds of appeal with evidence. The Assessing Officer has issued notice u/sec.148 of the Act dated 12.03.2024 in pursuance to search and seizure action in the case of M/s. Excel Rubber Group which reads as under:

6.2. Thus, in Para-2 of the said notice, the Assessing Officer asked the assessee to furnish the return of income within 30 days from the service of the notice. The time period allowed by the Assessing Officer for filing the return of income within 30 days from the service of notice is contrary to the provisions of sec.148 of the Act as exist at the relevant point which reads as under:

“148. Before making the assessment, reassessment or re- computation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within [a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee], a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice:

Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section: Provided also that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139.

Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—

(i) any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; or (ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or

(iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or

(iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or

(v) any information which requires action in consequence of the order of a Tribunal or a Court Explanation 2.—For the purposes of this section, where,—

(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or

(ii) a survey is conducted under section 133A, other than under sub-section (2A) [***] of that section, on or after the 1st day of April, 2021, in the case of the assessee; or

(iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee.”

6.3. Thus, it is statutory requirement under the provisions of sec.148 that assessee be given a period of 03 months from the end of the month in which notice is issued to furnish the return of income or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee. Though there is a subsequent amendment in the provisions of sec.148 of the Act by Finance Act, 2024 w.e.f. 01.09.2024 however, the notice under consideration was issued on 12.03.2024 therefore, the subsequent amendment by Finance Act, 2024 is not applicable. There is a clear specified period of 03 months to be allowed to the assessee for furnishing the return of income and that period of 03 months to be reckoned from the end of the month in which notice is issued whereas the Assessing Officer has allowed only 30 days from the service of the notice which is in gross contravention and violation of the provisions of sec.148 of the Act. Once the statute contemplates a specific condition for initiating the proceedings then, the Assessing Officer ought to have proceeded in the manner as provided by the statute and any diversion or contravention from the statutory conditions would render the proceedings initiated by the Assessing Officer as void abinitio and unsustainable in law.

“14. The proceedings under Chapter XIV-B and the provisions of section 139 are different. A return filed under e section 139 is a voluntary return. A return under Chapter XIV-B cannot be filed voluntarily. It is only when a notice under section 158BC is validly issued, only then a return could be filed. It is not in every case that a notice under section 158BC would be issued by the revenue. However, as and when validly issued, it is only then that a return could be filed. When any search has been conducted under Section 132 or books of account, other document or assets are requisitioned under section 132A, it is only then, the Assessing Officer shall proceed to assess the undisclosed income. Therefore, section 158 BA provides for jurisdiction to the Assessing C Officer to assess the undisclosed income in accordance with Chapter XIV-B. Section 158BA(2) is a charging section, 158BB provides for computation of undisclosed income for the block period and 158BC provides for procedure for block assessment. Therefore, a notice under section 158BC cannot be equated with that of notice. under section 148. A notice under section 158BC provides for a procedure to be adopted for block assessment. Under this procedure envisaged, the Assessing Officer shall serve a notice requiring the assessee to furnish his return within such time not being less than 15 days but not more than 45 days as specified in the notice. Therefore, the time to be granted to the assessee in terms of section 158BC is a minimum of 15 days and a maximum of 45 days. If the said period of time is not granted, the notice is invalid rendering the entire proceedings as without jurisdiction. Admittedly in this case, the notice under section 158BC calls upon the assessee to submit its return of income "within a period of 15 days". Within a period of 15 days is less than 15 days. Therefore, the mandatory period of time as stipulated under section 158 BC has not been complied with. The notice therefore is invalid. An invalid notice cannot confer any jurisdiction on the authority. Hence, the entire proceedings are bad in law. The notice is ab initio void.

"292B No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act."

7.1. Thus, the Hon’ble High Court has held that notice issued by the Assessing Officer u/sec.158BC providing less than 15 days for filing the return of income as against the statutory requirement of providing not less than 15 days but not more tan 45 days is invalid rendering the entire proceedings as without jurisdiction. The Hon’ble High Court has further submitted that the consent or waiver does not confer the jurisdiction on the Assessing Officer to proceed but the jurisdiction is conferred by the statute. Further, this invalidity is not a mistake, defect or omission covered u/sec.292B of the Act but it is violation of law which cannot be rectified.

“6. We have heard learned counsel for the parties. We are aware of the decision of the apex court which has been referred to by the Bombay High Court. None the less, while block assessment is to be made, the Assessing Officer is having knowledge about the statutory provision and while issuing notice he should have mentioned in it about his source of power and should have referred to the time which is required to be given for the purpose of filing of return under section 158BC of the Act. The words mentioned in the notice are "within fifteen days" whereas the provision mandates the time of "not less than fifteen days". In view of the decisions of the Supreme Court referred to more particularly New India Industries Ltd. (supra), we are of the opinion, fifteen days means, clear fifteen days which is the requirement under law. In that view of the matter, we are of the view that the notice which was issued by the authority asking the assessee to file the return within fifteen days is not in accordance with the provisions of the Income-tax Act and therefore it is invalid. In our view, the authority who is issuing the notice must be aware of the Act and must construe the provision strictly. The words "not less than fifteen days" have to be interpreted correctly. In that view of the matter, since the Assessing Officer asked the assessee to file the return within fifteen days of the service of the notice, the notice issued by the Assessing Officer is invalid. We are, therefore, of the opinion that the Tribunal has rightly cancelled the order of the Assessing Officer. The questions referred to us are, therefore, answered in favour of the assessee and against the Revenue.”

8.1. Thus, in the said case the notice issued by the Assessing Officer u/sec.158BC of the Act asking the assessee to file the return of income within 15 days was held as invalid, as, as per the provisions, the time limit ought to have been allowed as not less than 15 days and therefore, there should be a clear 15 days which is required under law. The Hon’ble High Court consequently held the notice issued by the Assessing Officer u/sec.158BC of the Act as invalid.

“Now, there is a very important, and in our opinion a fundamental distinction between a notice issued under section 22(2) and a notice issued under section 34. A notice under section 22(2) is not obligatory and it is not a condition precedent to the assumption of jurisdiction by the Income-tax Officer. A public notice under section 22(1) is obligatory and without issuing any notice under section 22(2) if a return is made by an assessee pursuant to the public notice, the Income-tax Officer would have jurisdiction to assess. Nay, even if no public notice was issued and a voluntary return was made by an assessee, it cannot be disputed that the Income- tax Officer would have jurisdiction to assess. In that sense section 34 is entirely different from section 22(2). As we have already pointed out, the very scheme of that section is that the Income-tax Officer has no jurisdiction to assess under section 34 without giving the notice referred to in that section. Therefore, whereas it will be perfectly true to say, as the Federal Court said, that section 22(2) is a procedural section and the failure to give notice or a defect in a notice is a procedural defect, in the case of section 34 it is not a procedural defect but it is a failure to comply with a condition precedent to the assumption of jurisdiction. It is true that the observations of the Federal Court, with respect, are rather wide and it may seem as if they apply to all notices under the Income- tax Act. But the decision is given in respect of section 22(2) and again, with respect, the decision must be confined to the facts of that case. It is clear that Mr. Justice Kania was thinking of the special incidents of the notice given under section 22(2) because it is pointed out at page 308 [1947] 15 ITR 302 by the learned Judge:

"Suppose a person, even before a notice is published in the papers under section 22(1), or before he receives a notice under section 22(2) of the Income-tax Act, gets a form of return from the Income-tax Office and submits his return, it will be futile to contend that the Income-tax Officer is not entitled to assess the party or that the party is not liable to pay any tax because a notice had not been issued to him."

We have then a direct decision of the Calcutta High Court with regard to a notice under section 34, reported in Commissioner of Agricultural Income-tax v. Sultan Ali [1951] 20 ITR 432. The Court there was considering the Bengal Agricultural Income-tax Act, 1944, which substantially corresponds with the Indian Income-tax Act. In that case no notice was given under section 34 but a notice was given under section 22(2) and in compliance with that notice a return was made. But the Income-tax Officer proceeded to assess under section 34, and the question arose whether the assessment was a valid assessment, and the Calcutta High Court held that the assessment was bad. The learned Chief Justice refers to the Federal Court judgment and distinguishes it, and at page 449 the learned Chief Justice say's: "Besides it may be that when any particular notice is in fact issued a defect in it or an irregularity concerning it will not affect the validity of the assessment. But the question in the present case is not so much the invalidity of the notice under section 24(2) (which corresponds with section 22(2) of the Income-tax Act), as the validity of the proceedings which were commenced without complying with the statutory requirement of a notice under section 38 (which corresponds with section 34 of the Income-tax Act). The decision of the Federal Court does not cover an omission of a step which the statute regards as a condition precedent to the commencement of proceedings in exercise of jurisdiction."

Therefore, it is clear that the learned Chief Justice in that case takes the view that a notice under section 34 is a condition precedent to the commencement of proceedings in exercise of jurisdiction. But having held that a proper notice under section 34 is a condition precedent to the assumption of jurisdiction the learned Chief Justice goes on to consider the question of waiver and on the facts of the case he holds there is no waiver. With very great respect to the learned Chief Justice, it is difficult to understand how there can be a waiver of the condition precedent, compliance with which alone can confer jurisdiction upon an authority or a tribunal. It is well settled that no consent can confer jurisdiction upon a Court if the Court has no jurisdiction, and if we take the view that the Income-tax Officer can have jurisdiction only provided he complies with the conditions laid down in section 34, then no consent by the assessee or no waiver on his part can confer jurisdiction upon the Income-tax Officer. Therefore, while agreeing with the Calcutta High Court that the notice provided for in section 34 is a condition precedent to the assumption of jurisdiction, with respect we are unable to accept the view that a defect in a notice given under section 34 or a failure to give notice under section 34 can be waived by the assessee.”

10.1. The Hon’ble High Court has held that defect in the notice issued u/sec.34 of Income Tax Act, 1922 [corresponding to sec.148 of Income Tax Act, 1961] is not a procedural defect but it is a failure to comply with the conditions precedent to the assumption of jurisdiction and therefore, the said failure to give the notice u/sec.34 cannot be waived by the assessee.

“12. Narayana Chetty's case [1959] 35 ITR 388 (SC), was a case of non-issue of notice to the assessee under Section 34 but the case of Ramsukh Motilal [1955] 27 ITR 54 (Bom), approved therein, was one in which precisely the same question, as in this case, arose for consideration. The time allowed for filing the return in the notice under Section 34 was less than the period of thirty days prescribed in Section 22(2) which corresponds to Section 17(2) of the 1950 Act and Section 35(2) of the 1991 Act. Chagla C. J., speaking for the court, declared the law as under (at page 59):

"Each of the three requirements mentioned in Section 22(2) is qualified by the Legislature providing that the notice must give time to the assessee to comply with that requirement within a period which cannot be shorter than 30 days. The requirement is not merely to make a return or to verify or to give particulars. The requirement is in each case that the return must be made, the verification must be made, or the particulars must be given, within a period of not less than 30 days. Therefore, it is clear that if a notice under Section 34 embodies any of the requirements under Section 22(2), it must at the same time permit the assessee to comply with that requirement within a period which is not less than 30 days. If the period is shorter than 30 days, then the requirement is not the requirement as set out in Section 22(2). In this case, the notice gave only six days to the assessee to make a return under Section 34. Therefore the requirement was different from the requirement under Section 22(2) and the notice was clearly bad."

Therefore, it is clearly invalid and not sufficient to sustain the proceedings under Section 35. The order, exhibit P-7, is, therefore, unsustainable in law.”

11.1. The Hon’ble High Court after referring to the Judgment of Hon’ble Bombay High Court in the case of Narayana Chetty (supra) has held that the notice issued by the Assessing Officer giving only 06 days time to file the return is clearly invalid and not sufficient to sustain the proceedings u/sec.35 of Agriculture Income Tax Act, 1950 (Kerala).

Order pronounced in the open court on 04.11.2026

Sd/- Sd/- MANJUNATHA G. VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 04th day of November, 2026 VBP Copy to: MANDADA HEMALATHA, D. NO. 7-82, REDDY 1 COLONY, CHEVELLA, RANGA REDDY-501503, TELANGANA DCIT., CENTRAL CIRCLE-1(3), AAYAKAR BHAWAN, OPPOSITE LB STADIUM, 2 BASHEER BAGH, HYDERABAD-500004, TELANGANA 3 THE PCIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD A-BENCH, HYDERABAD. 5 GUARD FILE TRUE COPY VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.11.04 ASSISTANT REGISTRAR / RAO 17:15:47 +05'30' I.T.A.T., HYDERABAD