HC pulls up tax dept. for issuing unlawful block assessment notice; imposed costs on dept.

Facts:

This Petition challenges a notice issued by the AO under Section 158BC calling upon the Petitioner to file his return of income within a period of 15 days of service of the notice.

The High Court held as under:

1) It was clear that no incriminating documents were found during the course of search. In any case the appraisal report would indicate that no notice under Section 158BC of the Act could be issued to the Petitioner as the condition precedent to issue such notice (viz, undisclosed income found during the search proceedings) was not satisfied.

2) This action on the part of the Respondents-revenue to issue the impugned notice ignoring the appraisal report was highly deplorable. We live in a Country governed by laws. The Officers of the Income Tax Department are obliged to proceed in accordance with the statutory provisions and not on their whim and fancy.

3) The Officers hold power in trust and must ensure that no citizen is harassed by sending him notices, when on the basis on its own record, such notices are not sustainable. We trust that the Income Tax Department would adopt a standard operating procedure which would provide for appropriate safeguards before issuing notices under Chapter XIVB of the Act. This alone would ensure that Officers of the Revenue act in terms of the mandate provided in the Act.

4) Thus, the Respondent-revenue was directed to pay the costs of Rs. 20,000 to the Petitioner within four weeks from today. - [2016] 74 taxmann.com 128 (Bombay)