S.C. TIWARI, A.M. EDITORIAL COMMENTS Attention is invited to following Editorial Comments made while reporting decision in case ofVindo Kumar & Ors. vs. Asstt. CIT (2005) 98 TTJ (Agra) 7 6 9: "Conflicting views have been expressed by different Benches of Tribunal on question of validity of notice under s. 158BC vis-a-vis s. 292B. In case ofGorakhpur Petro Oils Ltd. vs. Addl. CIT (2005) 95 TTJ (All)(TM) 489, i t was held that AO can assume jurisdiction to complete block assessment only after valid service of legal and valid notice on assessee. In absence of any authorisation issued by assessee-company in favour of advocate who had received notice u/s. 158BC on behalf of company, notice cannot be taken as served on assessee-company even though assessee had filed return and also participated in assessment proceedings and consequently, block assessment is liable to be quashed. However, Amritsar Special Bench in case ofSmt. Mahesh Kumari Batra (2005) 95 TTJ (Asr)(SB) 4 6 1has held that provisions of s. 158BC are procedural in nature; any defect in notice or with regard to its issue cannot render block assessment proceedings to be null and void as such errors are rectifiable u/s. 292B. Mistake in mentioning block period in notice u/s. 158BC or service of such notice on advocate who was probably not engaged for block assessment proceedings but was otherwise representing assessee s cases were rectifiable errors u/s. 292B and could not render block assessment proceedings void." This appeal has been filed by assessee on 19th Feb., 2002 against order of learned CIT(A)-II, Agra, dt. 11th Dec., 2001 in case of assessee in relation to order under s. 158BC for block period 1st April, 1 98 8 to 29th April, 19 98 . 2. first ground in this appeal is general and is covered by subsequent grounds of appeal. grounds of appeal Nos. 2 and 3 are directed against validity of notice under s. 158BC and ground of appeal No. 4 is directed against AO completing assessment under s. 158BC without issue of notice under s. 143(2) of Act. Besides, by way of grounds of appeal No. 6 , assessee has disputed legality of search itself. 3 . During course of hearing before us, learned counsel for assessee stated that assessee was not interested in disputing ground of appeal No. 6 in view of Tribunal Special Bench decision in95 TTJ (Del)(SB)25 [sic-it should bePromain Ltd. vs. Dy. CIT (2005) 95 TTJ (Del)(SB) 825 Ed.].We, therefore, reject assessee s ground of appeal No. 6 as withdrawn. 4 . We shall refer to assessee s ground of appeal Nos. 2, 3 and 4, which are based on technical points little later. On merits, only ground taken by assessee in this appeal is ground of appeal No. 5, whereby assessee has disputed addition of following amounts as undisclosed income of assessee for block period : Amount Assessment year (Rs.) 1994-95 35,000 1995-9 6 42,000 199 6 -97 1,3 6 ,840 1997- 98 6 ,530 19 98 -99 8,411 Total 2,82,781 5 . facts of case relating to this dispute, briefly, are that assessee was carrying silver jewellery in Maruti van and was intercepted by police. He was found to be in possession of silver jewellery weighing 242.507 kgs. As assessee could not properly explain source of acquisition of silver ornaments, warrant of authorization for requisition of same was issued under s. 132A on 29th April, 19 98 and subsequently, silver ornaments were seized. Thereafter, learned AO issued notice under s. 158BC and served it on assessee on 8th Oct., 19 98 . assessee filed return in Form 2B for block period on 23rd July, 1999. During course of block assessment proceedings, assessee initially surrendered 54 kgs. of silver ornaments for taxation. aforesaid surrender was revised to 75 kgs. and finally to 100 kgs. AO treated 102.42 kgs. of silver ornaments as unexplained and balance as explained. value of unexplained silver ornaments was determined at Rs. 4,33,907. In this appeal, assessee has not disputed assessment of this amount of Rs. 4,33,904. 6 . assessee had never filed any returns of income till action under s. 132A, as abovementioned, was taken on 29th April, 19 98 . Thereafter, assessee filed on 18th May, 19 98 returns of income for asst. yrs. 1994-95 to 1997- 98 . For asst. yr. 19 98 -99, return of income was filed on 31st Oct., 19 98 . In these returns, assessee disclosed income from business of silver ornaments on labour basis. He also declared income from salary and rent. It was stated that return for asst. yr. 1993-94 and earlier years were not filed as assessee s income was below taxable limit. AO treated income as per return of income filed by assessee on 18th May, 19 98 for asst. yrs. 1994-95 to 1997- 98 as representing assessee s undisclosed income for block period. returns of income had been filed by assessee after search. learned AO, therefore, held that this income was undisclosed income of assessee and included same in assessment of undisclosed income for block period. Besides, assessee disclosed certain cash loans during financial year 1995-9 6 . During course of block assessment proceedings, assessee surrendered four loans of Rs. 19,000 each for assessment as assessee s undisclosed income. learned AO treated sum of Rs. 7 6 ,000 also as representing assessee s undisclosed income under s. 158BC for asst. yr. 199 6 -97. Besides, learned AO disallowed certain amounts from out of depreciation, vehicle expenditure and interest paid, claimed by assessee. amount thus disallowed was also treated as undisclosed income of block period. 7 . During course of hearing before us, learned Authorised Representative of assessee argued that insofar as amounts disputed by assessee s ground of appeal No. 5 are concerned, same are required to assessee s ground of appeal No. 5 are concerned, same are required to be deleted, as they do not pertain to block assessment proceedings at all. He argued that it was settled position that only income detected during course of search or as result of search can be assessed as undisclosed income of assessee in block assessment proceedings under s. 158BC. Other income of assessee, whether disclosed by assessee himself or found out as result of enquiries, etc. made by AO, are required to be assessed by way of regular assessment under s. 143(3). In support of these contentions, learned Authorised Representative of assessee has placed reliance on decision of Tribunal, Mumbai Bench B-in case ofMorarjee Goculdas Spg. & Wvg. Co. Ltd. vs. Dy. CIT (2005) 98 TTJ (Mumbai)(TM) 201 : (2005) 95 ITD 1 (Mumbai)(TM). 8 . learned Departmental Representative argued that this aspect had been duly considered by learned CIT(A) in para 4.3 of impugned order. I n case of assessee, there were no proceedings under s. 143(3) for finalization of regular assessment as at time of search. As matter of fact till date of requisition under s. 132A, no return of income had been filed by assessee. It was only after proceedings under s. 132A that assessee had filed return of income for first time for various years. Therefore, even income as shown in returns belatedly filed by assessee, was required to be treated as undisclosed income for purpose of block assessment under s. 158BC. 9. We have carefully considered rival submissions. legal position is now well-settled. While making order under s. 158BC, AO does not have same jurisdiction that he has while assessing income of assessee under general provisions of Act. Under provisions of s. 158BC, AO can bring to assessment only that undisclosed income, which has nexus with evidence found as result of search or requisition of such other materials or information as are available with AO and relatable to such evidence. In regular assessment under s. 143(3), AO is empowered to bring to assessment any income chargeable to tax under provisions of Act. meaning of "such other materials" appearing in s. 158BB(1) has been considered at length in decision of Tribunal, Mumbai and Hon ble Bench held that legislature has used words "such other materials". Hence, "such other materials" means materials found as result of search or requisition. same view has been taken by Hon ble Allahabad High Court in case ofCIT vs. Smt. Usha Tripathi (2001) 1 66 CTR (All) 77 : (2001) 249 ITR 4 (All). There are large number of judgments supporting this view and reference may be made toCIT vs. Shambhulal C. Bachkaniwala (2000) 1 6 2 CTR (Guj) 435 : (2000) 245 ITR 488 (Guj);CIT vs. Vinod Danchand Ghodawat (2000) 1 6 3 CTR (Bom) 432 : (2001) 247 ITR 448 (Bom);CIT vs. Rajendra Prasad Gupta (2001) 1 66 CTR (Raj) 83 : (2001) 248 ITR 350 (Raj); Bhagwati Prasad Kedia vs. CIT (2001) 1 6 7 CTR (Cal) 33 6 : (2001) 248 ITR 5 6 2 (Cal);CIT vs. Ravi Kant Jain (2001) 1 6 7 CTR (Del) 5 66 : (2001) 250 ITR 141 (Del);CIT vs. Dr. M.K.E. Memon (2001) 1 6 8 CTR (Bom) 184 : (2001) 248 ITR 310 (Bom)and so on. Examined from this point of view, we find that it is not case of learned AO and/or CIT(A) that income returned by assessee in belated returns had already been unearthed or detected during course of requisition under s. 132A. Even amount of cash credits surrendered by assessee, particularly of four loans were found not as result of search but as result of subsequent enquiries made by AO after search. We are, therefore, satisfied that amounts mentioned in ground No. 5 are required to be excluded from block assessment proceedings for short reason that they do not belong to block assessment proceedings in first instance. As already mentioned, in case of person searched, there has to be block assessment as well as regular assessment and income pertaining to regular assessment alone cannot be included in block assessment proceedings. For that purpose, it makes little difference whether or not assessee had filed return of income as on date of search or requisition. We, therefore, direct deletion of assessment of undisclosed amounts as mentioned in ground No. 5 for purpose of block assessment proceedings. 10. We now come to assessee s grounds of appeal relating to validity of block assessment order made by AO. During course of hearing before us, learned Authorised Representative of assessee filed copy of notice under s. 158BC issued by AO. He pointed out that in notice under s. 158BC issued by AO on 9th Sept., 19 98 , learned AO had not denoted whether return of income was required from assessee s individual/HUF/firm/company/AOP/BOI/local authority. learned AO had not selected any of these for notice under s. 158BC nor had he scored out other items. Notice under s. 158BC was, therefore, bad in law. Secondly, in notice, block period was mentioned as 1st April, 1 98 7 to 29th April, 19 98 whereas correct block period was 1st April, 1 98 8 to 29th April, 19 98 . learned Authorised Representative of assessee argued that for this reason, order under s. 158BC made by AO was voidab initioand liable to be struck down. In support of these contentions, learned Authorised Representative of assessee placed reliance on decision of Tribunal, Agra Bench SMC Agra, dt. 30th June, 2004 in case ofVinod Kumar & Ors. vs. Asstt. CITbearing IT(SS)A Nos. 1, 2, 3, 4/Agra/2003 [reported at(2005) 98 TTJ (Agra) 7 6 9 Ed.]. learned counsel for assessee further argued that in this case after assessee had filed return of income for block period under s. 158BC, learned AO never issued notices under s. 143(2). Issue of such notice was mandatory as held by Tribunal, Lucknow, Special Bench in case ofNawal Kishore & Sons Jewellers vs. Dy. CIT (2003) 81 TTJ (Lucknow)(SB) 3 6 2 : (2003) 87 ITD 407 (Lucknow)(SB). To our pointed query as to whether by raising these grounds of appeal, assessee was seeking any fresh opportunity by way of fresh notice under s. 158BC/143(2), learned counsel for assessee replied that during course of block assessment proceedings, assessee had been given sufficient opportunity to present its case and block assessment order had been made in relation to correct period and in correct status. assessee, therefore, did not have any grievance on this score in respect of order under s. 158BC as made by learned AO on 29th April, 19 98 . However, these were technical issues of substance and, therefore, assessee s prayer was that order under s. 158BC as made by AO may be annulled as beingab initiovoid. learned counsel of assessee categorically submitted that if we find these defects pointed out by him to be curable defects, same may be treated to have already been cured in order under s. 158BC made by AO and assessee was not interested in having fresh order under s. 158BC, being made in this case. 11. learned Departmental Representative argued that in this case, assessee had been raising technical objections all way. First assessee challenged legality of requisition under s. 132A before Hon ble Allahabad High Court without success. objections now raised in relation to notice under s. 158BC were also with sole objectives of not paying amount of tax legitimately due from him on one pretext or other. On receipt of notice under s. 158BC, assessee filed return of income without any objection for correct status and for correct period. It was case of assessee himself that order under s. 158BC made by learned AO is correct both in respect of status as well as block period. It was admitted case of assessee that no prejudice, whatsoever, was caused to assessee on account of so-called defects in notice under s. 158BC made by AO. Even in relation to notice under s. 143(2), assessee admitted that he was fully heard and there was no requirement of any further opportunity of being heard in matter. On these facts, no further relief was called for to assessee on these counts. 12. We have carefully considered rival submissions. assessee has disputed correctness of notice under s. 158BC on twin grounds of status of assessee not having been mentioned therein and block period having been wrongly mentioned. contention of assessee before us on basis of these defects is that consequent order under s. 158BC made by AO may be annulled as voidab initio.The assessee, however, does not want any curative steps in relation to alleged defects in notice under s. 158BC and he admits that order under s. 158BC has been made in correct status and for correct block period. assessee has placed heavy reliance on decision of Tribunal, SMC Bench, Agra in case ofVinod Kumar & Ors.(supra). On consideration of that decision, we find that proposition that non-mention of status in notice under s. 158BC would render it void has been too broadly stated. In case ofMulchand Rampuria vs. ITO (2002) 172 CTR (Cal) 45 : (2001) 252 ITR 758 (Cal), Hon ble Calcutta High Court have held that mistake in description of assessee would not invalidate notice under s. 148. In case ofChooharmal Wadhuram vs. CIT (19 6 8) 6 9 ITR 88 (Guj), it is held that where proceedings are initiated against correct person, mis- description of his status in notice is not material. In case ofGopaldas Parshottamdas vs. CIT (1941) 9 ITR 130 (All), mistake in notice of not scoring out any of four capacities printed therein was held to be not material because assessee had been assessed in previous years as HUF and had submitted return as HUF. Hence, arguments of assessee that he did not know exactly as to which capacity of his was under investigation and, therefore, notice was illegal, was not maintainable. 13. In our considered view, in all such matters, provisions of s. 292B have to be kept in mind and properly applied wherever necessary. provisions of s. 292B are as under : "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 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 intent and purpose of this Act." As to scope and applicability of provisions of s. 292B reference is invited to judgments reported in case ofCIT vs. R. Giridhar (1 98 4) 43 CTR (Kar) 253 : (1 98 4) 145 ITR 24 6 (Kar);CIT vs. K. Saraswathi Ammal (1 98 4) 39 CTR (Mad) 35 : (1 98 4) 14 6 ITR 48 6 (Mad);Swaran Kanta vs. CIT (1 98 9) 17 6 ITR 291 (P&H);I. Devarajan vs. Tamil Nadu Farmers Service Co- operative Federation (1979) 13 CTR (Mad) 280 : (1 98 1) 131 ITR 50 6 (Mad);Assam Carbon Products Ltd. vs. CIT (1997) 140 CTR (Gau) 30 : (1997) 224 ITR 57 (Gau);Vanaja Textiles Ltd. vs. CIT (2001) 1 66 CTR (Ker) 177 : (2001) 249 ITR 374 (Ker), etc. 14. Even prior to enactment of provisions of s. 292B, Courts have held that mistakes/mis-description that are not of fundamental nature would merely make notice or proceedings or assessment defective and notvoid ab initio.In case ofIsha Beevi & Ors. vs. TRO & Ors. 1975 CTR (SC) 300 : (1975) 101 ITR 449 (SC), Hon ble Supreme Court held that in order to substantiate right to obtain writ of prohibition, applicant has to demonstrate total absence of jurisdiction. If power to proceed is actually there, mere reference to wrong section for authority to act will not vitiate action taken. In case ofRaja Baldeodas Birla Santatikosh vs. CIT (1991) 190 ITR 578 (Cal), Hon ble Calcutta High Court observed : "... no hard and fast line can be drawn between nullity and irregularity; but this much is clear, that irregularity is deviation from rule of law which does not take away foundation or authority for proceeding, or apply to its whole operation, whereas nullity is proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated. Whether provision falls under one category or other is not easy of discernment but in ultimate analysis it depends upon nature, scope and object of particular provision. workable test has been laid down by Justice Coleridge inHolmes vs. Russell (1841) 9 Dowl 487which reads : It is difficult sometimes to distinguish between irregularity and nullity; but safest rule to determine what is irregularity and what is nullity is to see whether party can waive objection; if he can waive it, it amounts to irregularity; if he cannot, it is nullity ." 15. There can be different situation emerging where some error creeps in any statutory notice, proceedings or order. In first category of cases, error can be ignored if same have been waived. Ordinarily where party ignores error and responds as if there is no error, waiver can be assumed to have taken place. Only in matters relating to substantive law that goes to root of matter it can be held that there is nullity that cannot be validated by waiver. Second situation may be where although there is no waiver; defect or irregularity is curable and not fatal. This aspect has not been considered at all, we say so with respect, in decision in case ofVinod Kumar & Ors.(supra). 1 6 . In case ofEstate of Late Rangalal Jajodia vs. CIT (1971) 79 ITR 505 (SC), Hon ble Supreme Court has held that even absence of notice may be curable. Facts of that case are that Rangalal Jajodia filed IT returns for years 1942-43 and 1943-44 but before assessments could be made, Rangalal Jajodia died. Rangalal Jajodia was survived by Shankarlal Jajodia, son by predeceased wife, Aruna Devi, second wife, and children by second wife. Rangalal Jajodia had made will on 1 6 th April, 1945, whereby Aruna Devi and one Ram Kumar Bhuwalka were executrix and executor, respectively. Shankarlal Jajodia was disinherited under will. assessment orders were served on Shankarlal Jajodia who appealed to AAC contending that he was not legal representative. Pursuant to directions of AAC, Revenue Officer completed assessments on estate of late Rangalal Jajodia by executors, Mrs. Aruna Devi and another. executrix, Aruna Devi, appealed against assessments contending before AAC that assessments were barred by limitation and that previous AAC s direction to make assessments on her was invalid. It was also contended that reasonable opportunities were not given to Aruna Devi before assessments were made. AAC on 1 6 th April, 1955, held that assessments were validly made on valid direction by previous AAC. He however, set aside assessments directing Revenue Officer to complete them after giving executrix fresh opportunity to object to assessment. High Court, on reference under s. 66 (1) of Act, held that second proviso to s. 34(3) applied to save reassessment from bar of limitation but that in present appeals, first assessments which were made on Shankarlal Jajodia were set aside on appeal because these were not on real legal representatives of deceased and, therefore, no direction or finding could be made by Revenue authority in any such appeal as would remove bar of limitation on reassessment later made on executor who was to be regarded as entirely different assessee. High Court also held that direction or finding given by AAC for making assessment on executors was therefore, direction and findings outside scope of second proviso to s. 34(3) of Act. Hon ble apex Court observed, "The lack of notice does not amount to Revenue authority having had no jurisdiction to assess, but that assessment was defective by reason of notice not having been given to her. assessment proceeding does not cease to be proceeding under Act merely by reason of want of notice. It will be proceeding liable to be challenged and corrected. Similarly, if there is mistake as to name or there is misdescription of name, proceeding will be liable to be challenged and corrected by giving notice to assessee subject to such just exceptions as assessee can take under law. direction given by AAC was to make fresh assessment on Aruna Devi in accordance with provisions of Act". 17. In instant case, apart from innocuous mistakes no prejudice has been caused to assessee. assessee has, therefore, rightly argued before us that in event, impugned orders not being found to be voidab initio, no further curative steps may be taken. Had there been prejudice caused to assessee in any manner, law laid down by Hon ble Supreme Court in case ofEstate of Late Rangalal Jajodia(supra) is quite clear that assessment proceeding cannot cease to be proceeding under Act merely by reason of want of notice. It will be proceeding liable to be challenged and corrected. However, on facts of case before us there being no prejudice, impugned order under s. 158BC can be treated as having been made in lawful manner within meaning of s. 292B of Act. assessee also desires so. We, therefore, reject assessee s grounds of appeal Nos. 2 and 3 against validity of order under s. 158BC. 18. assessee s ground of appeal No. 4 is directed against AO not having issued any notice under s. 143(2). Here again, we find order under s. 158BC as having been validated by provisions of s. 292B of Act. To begin with, learned AO himself gives caption, "158BC r/w s. 143(3) of IT Act". On perusal of assessment order, it is seen that assessee appeared before learned AO through his Authorized Representative from time-to-time and various aspects of case were discussed. assessee was accorded full opportunity to produce or cause to be produced any evidence on which assessee would rely in support of return under s. 158BC. assessee was given full opportunity to substantiate all his claims. Thus, want of issue of notice under s. 143(2) on part of AO, if there is indeed any such lapse, is only procedural error to be cured by suitable directions to learned AO. In instant case, there is no prejudice to assessee and assessee has himself requested that no curative steps be taken. Hence, no further action appears to be necessary. We, therefore, reject assessee s ground of appeal No. 4 also. 19. In result, this appeal is partly allowed. *** CHANDRA BHAN v. ASSISTANT COMMISSIONER OF INCOME TAX