BANGALORE B BENCH DEPUTY N.R. SUDHIR v. COMMISSIONER OF INCOME TAX (INV.) April 17, 2006 JUDGMENT DeepakR. Shah, Accountant Member. - This appeal by assessee is directed againstthe order of Assessing Officer under section 158BC of Income-tax Act, 1961(the Act) dated 23-2-2001. 2.The Assessing Officer assessed income by way of share of appellant indistribution of film 'Indian' and certain cash credits as appearing in cashbook of assessee. income was assessed as offered by assessee in hisreturn of income. 2.1Learned counsel for assessee Shri Raghavendra Rao explaining fact submittedthat this assessment is originated because of search under section 132 on11-10-1996 in case of one Sri K.R. Prabhu, Film Distributor. blockassessment order of Sri K.R. Prabhu is made on 31-12-1997 under section 158BCfor block period 1-4-1986 to 11-10-196. In said assessment order thereis no finding anywhere as to whether department found any incriminatingmaterial/document during course of search indicating undisclosed income ofSri N.R. Sudhir. Thenotice under section 158BD dated 8-2-2000 was served on appellant on14-2-2000 requiring him to file return for block period from 1987-88 to1996-97 (it may be noted that block period was noted assessment yearwiseignoring in toto remaining part of block period from 1-4- 1996till date of search on 11-10-1996). Thus, there is prima faciedefect in issuing notice. Hence notice is invalid to extent statedabove as it covered only part of block period. It has been held in SukhdeoPrasad v. Asstt. CIT [2004] 87TTJ (All.) 604 that omission to specify block period properly is asignificant lapse affecting validity of entire proceedings. Theissue of notice under section 158BD dated 8-2-2000 is also barred bylimitation. reason is that for proceedings under section 158BD, theincriminating material indicating undisclosed income of appellant shouldhave been found as result of search in premises of Sri K.R. Prabhu on11-10-1996. At time of scrutiny of search material found during courseof raid, Assessing Officer of person searched should have satisfactionof existence of undisclosed income in search materials. However, as per theassessment order and other records, no such material was found to givesatisfaction. seized material in search on 11-10-1996 in case of K.R. Prabhu has been returned to him after assessment under section 158BC on31-12-1997. So if at all any 'satisfaction' of existence of undisclosed incomewas there by Assessing Officer, it should have been between 11-10-1996 to31-12-1997 i.e., at any time before completion of assessment andreturn of materials seized in case of main search under section 132. The158BD notice should have been reasonably issued at latest before 31-12-1997but no such notice was issued. It took unreasonably longer time to issue noticeunder section 158BD i.e., notice under section 158BD dated 8-2-2000was issued more than 4 years 3 months after search under section 132 andmore than 3 years after assessment in case of search under section12 was completed and records returned. There is no explanation for this unduedelay. Hence block assessment proceedings initiated beyond reasonable timeis barred by limitation. Furtherpage 1/2, line-2 of assessment order reads as follows:- "Informationrelating to undisclosed income in case of Sri Sudhir also surfaced duringthe course of search in case of Sri K. R. Prabhu". Thestatement is very vague and confusing and it does not specify any materialfound indicating undisclosed income as defined under section 158B(G) foundduring course of search. It has been held in various judicialpronouncements that for assessment under Chapter XIV-B, existence ofincriminating material found as result of search representing undisclosedincome is very vital. Similarly, based on such material, recording satisfactionunder section 158BD of existence of undisclosed income is essential. vaguestatement that undisclosed income surfaced, without pinpointing theincriminating material found as result of search indicating undisclosedincome - only shows that there is no basis/material for invoking Chapter XIV-Bexcept suspicion and surmise. Without proper evidence for satisfaction or asatisfaction note under section 158BD there cannot be valid block assessment.It has been so held in following cases: (i) NitinP. Shah v. Dy. CIT [2005] 276 ITR 411 (Guj.) page No. 424 1st parawhich - among other things - refers to following question of law consideredby High Court in appeal. "(iii)Whether Appellate Tribunal was rightin law and on facts in upholding directions of Commissioner ofIncome-tax (Appeals) that provisions of section 158BD of Income-tax Actwere not applicable in this case with regard to bringing to tax amount ofRs. 67.75 lakhs?" Whereinthe court observed in page 433 para 45 as follows: "Ona plain reading before section (158BD) comes into play, followingconditions are required to be satisfied: (i)The Assessing Officer who is assessing theperson searched has to be satisfied that any undisclosed income belongs to aperson other than person searched; (ii)Secondly, books of account, other documentsor assets seized shall be handed over to Assessing Officer havingjurisdiction over such other person. Thus,the satisfaction has to be of Assessing Officer having jurisdiction overthe person searched, ... said Assessing Officer having jurisdiction overthe person searched is thereafter required to hand over books of account,other documents or seized assets to Assessing Officer having jurisdictionover other person. In other words, Assessing Officer of L.T. Shroffgroup (Assessee searched) is required to record satisfaction that anundisclosed income, which comes to light on examination of books of accountor other documents or seized assets, belongs to assessee, and afterrecording such satisfaction hands over such books of account, etc., as may berelevant to Assessing Officer having jurisdiction over assessee." Theabove clear mandate and procedure to be followed in initiating section158BD action was not preceded 158BD assessment in instant case. TheBombay High Court in case of CIT v. Vinod Danchand Ghodawat [2001]247 ITR 448 and Delhi High Court in case of CIT v. Ravi Kant Jain[2001] 250 ITR 141 has expressed opinion that where there is noincriminating material found in course of search there could not besatisfaction of existence of undisclosed income in accordance with section158BD of Income-tax Act. Ithas been held in case of Janki Exports International v. Union ofIndia [2005] (Delhi) as follows: "Section158BD is somewhat analogous to section 147 insofar as procedure that isrequired to be followed. Section 147 contemplates that, if AssessingOfficer has reasons to believe that there is escapement of income, then noticecan be issued under section 148. So far as section 158BD is concerned, theAssessing Officer has to be satisfied that there is undisclosed income. Uponsuch satisfaction, Assessing Officer is required to forward relevantdocuments, person in respect of whom undisclosed income has beendiscovered. Once this is done, person who is to be proceeded with undersection 158BD and then section 158BC must be informed about satisfaction ofthe Assessing Officer which has been recorded and he must be given reasonableopportunity to object to same. Satisfaction can be arrived on somematerial. That material would provide reasonable satisfaction." TheSpecial Bench of ITAT, Bangalore in Y. Subbaraju & Co. v.Asstt. CIT [2004] has held as follows: "Satisfactionof Assessing Officer that undisclosed income belongs to other person isjustifiable and when called in question, authorities cannot escape todemonstrate material that led to satisfaction that undisclosed incomeof other person has been detected by Department as result of search. Inthese cases, absolutely there is no iota of material from proceedings ofsearch that there was undisclosed income. When such is case, thesatisfaction that undisclosed income belongs to such other person is wanting.When that is case, entire proceedings framed with issuance ofnotice under section 158BD will have to go. In other words, if basis fornotice is not there, notice itself is wrongly issued making further assessmenton such other person is wholly outside purview of scheme. Satisfactionin very nature precedes issue of notice and it would not be correct toequate satisfaction of ITO with actual issuance of notice. Issuance ofnotice by itself is not display or record of satisfaction which is thebasic requirement under section 158BD.... basic ingredient of section 158BDis existence of some material. If there is no material, question ofAssessing Officer's satisfaction does not simply arise. If there is material,then of course, it would be better if Assessing Officer demonstrates thathe is satisfied about there being some undisclosed income belonging to personwho was not searched.... Thus in present case examination of therecords does not show existence of any material for satisfaction andconsequently issuance of notice under section 158BD is not justified - CIT v.G. M. Mittal Stainless Steel (P.) Ltd. [2003] 263 ITR 255 (SC) reliedon." Inthe instant case it is also seen from copies of letters addressed byand to Assessing Officer namely Dy. CIT (Inv.), Circle-5(1), Bangalore(enclosed as page Nos. 121 and 122) that even after 8 months of issue of thenotice there was no material with Assessing Officer which was found as aresult of search indicating undisclosed income. In fact letter indicatethat there is no records or evidence with him to make any block assessment ofundisclosed income. issue of notice under section 158BD without anyincriminating records found as result of search which gives satisfaction ofexistence of undisclosed income is void ab initio. followingdocuments/letters issued by Assessing Officer indicate absence of anymaterial found as result of search which prompts action under section 158BD: 1.Letter dated 9-11-2000 issued by Dy. Commissioner ofIncome-tax (Inv.), Circle-5(1), Bangalore to Sri B. C. Parthasarathy & Co. 2.Letter dated 9-11-2000 issued by Dy. Commissioner ofIncome-tax (Inv.), Circle-5(1), Bangalore to Sri K. R. Prabhu. 3.Summons under section 131 issued to Sri K. R. Prabhudated 6-9-2000. 4.Survey Report dated 28-8-1997. Thesedocuments are at pages 123 and 124 of paper book. Therefore, in instantcase, entire proceedings under section 158BD/BC becomes null and void asthere was no incriminating document found as result of search. Inpage 2, 1st Para of assessment order reads as follows:' "Surveyunder section 133A was carried out in business premises of assessee on11-10-1996". Itis true that survey was conducted on 11-10-1996. (i.e. same day when action under section 132 wastaken in case of Sri K. R. Prabhu). Following survey notice undersection 131 dated 11-10-1996 was issued and all regular account books andrecords of appellant impounded. It is submitted that when survey isconducted and regular books are impounded, impounding of regular books ofaccount is not same as finding of material as result of search undersection 132 and material impounded in survey/or regular books impoundedis wholly subject matter of regular assessment only. Inthe above cases, it has been held undisclosed income should come only out ofcases made under section 132 or proceedings under section 132A and not on theinformation obtained in action under section 133A. action under section133A is not within purview of section 158BA and to be considered only aspart of regular assessment. Inthe instant case undisclosed income assessed are from sources from share inthe 'Indian' film and alleged cash credits which are accounted in theregular books of account impounded in action under section 133A. returnin respect of these income was due only after date of survey (i.e.11- 10-1996) or even financial year was not ended. Therefore, incomeassessed under above heads is not includible in block assessment asthey are not undisclosed income within meaning section 158B(b)of Income-tax Act. These are part of income of regular assessmentaccounted in regular books of account impounded covered in surveyreport and also covered by advance tax paid, incomes found in regularbooks of account and not from any incriminating material ceased as result ofany search cannot be assessed under Chapter XIV-B of Income-tax Act as heldin following decisions:- (i) Smt.Hemlatha D. Shah v. Dy. CIT [2003] (Bang.) (Mag.), (ii) VishwanathPrasad v. Asstt. CIT [2003] (All.), (iii) BabrosMachinery Mfrs. (P.) Ltd. v. Dy. CIT [2003] (Ahd.)(TM), (iv) CITv. Nitin Munje [2003] 264 ITR 628 (M.P.), (v) SunderAgencies v. Dy. CIT [1997] (Mum.). 2.2On merits of addition, Sri Rao further submitted that first item ofincome relates to film 'Indian' information which is said to have beenfound in case of Sri K. R. Prabhu and other joint venture partnernamely assessee and Sri B. C. Parthasarathy. computation of this incomeis not made on basis of any undisclosed income found from materialobtained as result of search but only on basis of some otherassessment/estimation, suspicion and surmise. Here again 40 per cent shareof undisclosed income from 'Indian' film of K. R. Prabhu - where search undersection 132 took place - was estimated and assessed at Rs. 7.20 lakhs, but whenit came to assessee his 30 per cent share of undisclosed income from samebusiness of 'Indian' film was estimated and assessed at Rs. 23 lakhs. Thisclearly indicates that undisclosed income assessed is only on basis ofwild suspicion and without any evidence. Nextitem of income assessed in block assessment order in page 2/3, para 3 ofthe assessment order is in respect of loans/borrowings from filmfinanciers. information for this addition is obtained from regularbooks of account impounded during course of survey under section 133A andnot found in any search and as such this cannot be subject matter of blockassessment. Thus,it can be seen from above that income has been estimated and includedin block assessment following information only from regular booksof account which cannot be said "undisclosed income" in accordancewith section 158BA(3) of Income-tax Act. Theinformation regarding loan creditors and financiers was obtained from theassessee during course of survey proceedings from impounded regular booksof account and hence it cannot be part of block assessment. Inpara 5 of assessment order, allegation that similar credits has beenadded in income for assessment year 1994-95 and 1995-96 and when surveywas conducted during November, 1995. It is submitted that pastassessment records and survey cannot be basis of blockassessment/undisclosed income within meaning of section 158B(b). 2.3.Shri Rao further submitted that Assessing Officer has levied interest undersection 158BFA amounting to Rs. 11,95,200. provision of section 158BFA isnot at all applicable as said provision is in force only with effect from1-1-1997. Hence same is not applicable for search made prior to that datei.e., in instant case search was on 11-10-1996. Hence, levyis without any legal authority and is liable to be cancelled. assessmentorder further states that tax has been paid to tune of Rs. 14,50,000.It is submitted that this tax is not paid on filing Form-2B but it was advancetax paid for year 1996-97. As payment of advance tax is for disclosedincome, such income covered by payment of this advance tax cannot be part ofthe undisclosed income for block assessment and as such block assessmentmade on such regular income covered by advance tax is not sustainable in law.It was so held in: (i) Dr.Alaka Goswami v. CIT [2004] 268 ITR 178 (Gauhati) (ii) CITv. Kumkum Kohli [2005] 276 ITR 589 (Delhi). Inthe circumstances, block assessment is not sustainable in law for thefollowing reasons: (i)Belated initiation of action under section 158BD (ii)Non-issue of notice calling for objection fromthe assessee on satisfaction (under section 158BD) of existence of theundisclosed income. (iii)Defective notice under section 158BC (withoutprescribing block period correctly) (iv)Total absence of material indicating existenceof undisclosed income found as result of search under section 132 as requiredunder section 158BA(1) read with section 158B(b ); and absence of satisfaction note recorded as required undersection 158BD, hence no jurisdiction for any action under Chapter XIV-B. (v)The natural presumption that belated attemptis made in garb of block assessment to give new life to lapsed re-openedassessment under section 148. (vi)The assessment is made on basis of incomewhich is based on information collected in survey under section 133A andas such is only part of regular assessment. (vii)All income assessed in block assessmentare only on basis of regular books of accounts for which due date forfiling return was not over or financial year has not ended. (viii)The undisclosed income for block assessmentshould be computed from incriminating material found as result of searchunder section 158BB and it cannot be blindly based on return filedindicating that same is filed under duress. (ix)The presumption that assessment order wasnot made on date said to have been made because of inordinate delay incommunicating assessment order as assessment is not complete untilserved/communicated and when served was barred by limitation. (x)Levy of interest under section 158BFA when infact provision was not in existence/force on date of allegedsearch. (xi)As income assessed is deemed to be coveredby advance tax payment - hence part of regular assessment. (xii)As assessment order has not been approvedby prescribed competent authority prescribed under section 158BG asundisclosed income assessment which is taxed at highest rate requires theapproval/consent of experience and materials of authority of aCommissioner. 3.Learned DR Ms. H. Vijayalakshmi raised preliminary objection toentertaining appeal. She submitted that assessee has filed returndeclaring income of Rs. 83 lakhs. assessee has not paid self- assessment taxon such income returned. In view of provisions of section 249(4), no appealunder this Chapter shall be admitted, unless at time of filing of theappeal the, amount of tax due on income returned, has been paid. Theprovision refers to appeal under this Chapter i.e., Chapter XX as awhole and not sub-chapters within Chapter XX. Secondly, appeal is delayed.Since assessment pertains to search conducted prior to 1-1-1997, appealshould have been filed against assessment order directly to Tribunal.The assessee filed appeal before learned CIT(A) who has dismissed sameas he is not competent to dispose of appeal. Thereafter, assessee hasfiled appeal before Tribunal. delay in filing cannot be condoned.As regards merits of appeal, she relied upon assessment order. Shesubmitted that though material found during search in case of Mr. K. R. Prabhuwas returned to Mr. K. R. Prabhu, it still included information relating to theassessee and hence same was called back from Mr. K. R. Prabhu impounded andused in assessment proceedings for block period. Every defects like incorrectmentioning of block period or granting shorter time to file return of incomeare technical defects and because of same, assessment cannot beannulled. assessment being made only on basis of income declared in thereturn, cannot be annulled. 4.Adverting to preliminary objection raised by learned DR, Shri Rao submittedthat provisions of section 249(4) applies to appeal filed before Commissioner(Appeals) and not before Tribunal. Similar view has been adopted infollowing cases:- u PawanKumar Ladha v. Asstt. CIT [2003] (Indore). u V.N.Sudhakaran v. Asstt. CIT [2002] (Chennai) u AnilSanghi v. Asstt. CIT [2003] (Delhi) (SB). Asregards delay, Shri Rao submitted that when assessment order was servedalong with demand notice, demand notice mentioned to file appeal beforeCIT(A)-IV, Bangalore. Accordingly, appeal was filed within limitationperiod as advised by Assessing Officer himself. appeal was held 'notmaintainable' by learned CIT(A) by order dated 21-2-2002. Accordingly, on thecorrect advice by learned CIT(A), appeal was filed before Tribunal on15-3-2002. When Assessing Officer himself has advised wrongly, he cannottake benefit of his own wrong to deny justice due to appellant. Asregards declaring income in return, income was declared underduress and harassment. Thus, income was not declared voluntarily andassessee can still challenge income so assessed, if same are notlegally chargeable to tax. 5.We have considered relevant facts, arguments advanced and decisions cited. Asregards applicability of provision of section 249(4), we find that theissue is squarely covered in favour of assessee by decision of SpecialBench of Tribunal in case of Anil Sanghi (supra) wherein theSpecial Bench of Tribunal held as under: "Thevarious parts of Chapter XX are independent by themselves as they operate indifferent spheres. There cannot be any overlapping of one into other sincethese deal with appeals at different forums i.e., CIT(A), theTribunal, High Court and thereafter Supreme Court and lastly, there isthe part pertaining to revisions before CIT. Consequent to theinsertion of Chapter XIV-B with effect from 1-7-1995, there was consciousconsequential amendment in section 2253(3) whereby proviso was inserted tothe effect that first appeal to Tribunal in respect of blockassessment would have to be filed within period of 30 days of date onwhich order was communicated to assessee and it must be stated incontra-distinction that other appeals to Tribunal contain time-limit of60 days. In case Legislature so desired it could have brought theprovisions of section 249(4) to Part B of Chapter XX in respect of such firstappeals, but this was not done. distinction was to be kept between theregular assessment proceedings and block assessment proceedings since inthe latter availability with Department of seized assets in form ofmovables and immovables was likely to be k and in fact certainty andunder such circumstances it would be improper and in certain circumstancesneigh impossible for assessee to pay taxes on returned income pertainingto undisclosed income for block period. Therefore, provisions ofsection 249(4) are not applicable in respect of first appeals filed to theTribunal against block assessment - Nalin Doshi v. Asstt. CIT [1997] 59 TTJ (Ahd.) 298, .VN. Sudhakaran v. Asstt. CIT [2002] 77 TTJ (Chennai) 751; (2002)(Ind.) and Malwa Texturising (P.) Ltd. v Asstt. CIT [2002] 77 TTJ(Ind.) 995 approved;". Followingthe decision of Special Bench Anil Sanghi's case (supra), wehold that appeal is maintainable. 6.As regards delay in filing appeal, we find that delay is not attributableto action of assessee but because of improper advice by AssessingOfficer himself. demand notice which prescribes Forum where appeal lieswas mentioned as 'CIT(A)'. Accordingly assessee filed appeal beforeCIT(A). After CIT(A) dismissed appeal as not maintainable, assesseepromptly filed appeal before Tribunal within 30 days period. Thus, thedelay being accidental and not without reasonable cause, is required to becondoned. 7.On ground of validity of assessment pursuant to issue of invalid notice,the issue is covered in favour of assessee by decision of Tribunal inthe case of Microlabs Ltd. [IT(SS)A No. 22 (Bang.) of 2002, dated14-2-2005] wherein Tribunal held thus: "Wehave carefully considered relevant facts, arguments advanced and decisionscited. Chapter XIV-B was specifically introduced for completion of assessmentof search cases. If any search is conducted after 1-7-1995 and if evidencefound as result of search reveals undisclosed income, same has to bebrought to tax under Chapter XIV-B. proviso to section 158BC(a)provides that no notice under section 148 is required for purpose ofproceeding under this chapter. Thus that income which could not be assessedunder regular assessment and which is found, to have escaped assessment, as aresult of search are brought to tax under section 158BC(c). However, theprocedure for assessment starts with issue of notice under section 158BC(a).Therefore it can be concluded that just as for assessment of income which hasescaped assessment, assessment can be made under section 147 by issue of noticeunder section 148, similarly for completing assessment under section 158BC(c ) in respect of undisclosed income found as aresult of search assessment is made under section 158BC(c) by issueof notice under section 158BC(a). Both these sections, 158BC(a)and 148(1) are reproduced simultaneously to have easy comparison thereof. Section 158BC(a)( ii) Section 148(1) (Prior to amendment by Finance (No.2) Act, 1996 w.e.f. 1-4-1989) "Where any search has "Before making been conducted under section assessment, reassessment or or books of account, other recomputation under section documents or assets are 147, Assessing Officer requisitioned under section shall serve on assessee 132A, in case of any notice requiring him to person, then,' furnish within such period (a) Assessing Officer [not being less than thirty shall days] as may be specified in notice, return of his (i) in respect of search income or income of any initiated or books of account or other person in respect of other documents or any assets which he is assessable under requisitioned after 1st day this Act during previous of January, 1997, serve year corresponding to notice to such person relevant assessment year,..." requiring him to furnish within (bracketed words, omitted such time not being less than w.e.f. 1-4-1989) fifteen days... ." Thecomparison of above provisions reveal that jurisdiction for bringing totax escaped income starts with notice. Hon'ble Karnataka High Court whileinterpreting unamended section 148(1) held that when provision of Actrequires notice 'not being less than 30 days' and when actual noticeissued directed assessee to file return "within 30 days", thesame do not confirm to requirement: of provision of Act.Admittedly, this decision has been accepted and to overcome difficulty, theprovision of section 148 has been amended with retrospective effect. Since inthe present case provision of Act requires to grant time not less than 15days, we find that notice is not valid in eye of law. Hon'ble KarnatakaHigh Court in case of Winter Care (P.) Ltd. v. Dy. CIT [W.P.No. 33832 of 1992 dated 15-2- 1993] held thus: "Thepetitioner is aggrieved by notice issued under section 148 of theIncome-tax Act, 1961 on 29-11-1990 proposing to reassess income for theassessment year 1989-90 in terms of section 147 of said Act. petitionerhas been asked to file its objections within period of 30 days from dateof service of notice, whereas provisions of Act require notice to begiven to concerned party and call upon him to file objections within suchperiod as may be mentioned in notice, but not less than 30 days from thedate of receipt of notice. In present case, language used by theauthority concerned is that reply to notice should be filed within 30days from date of service of notice which does not conform with therequirements of provisions of Act. Inthe circumstances, impugned notice Annexure E dated 29-11-1990 shall standquashed. However, this order does not come in way of authority if it isopen to him to initiate fresh proceedings." Hon'bleSupreme Court in case of CIT v. Kurban Hussain IbrahimjiMithiborwala [1971] held as under: "Itis well-settled that Income-tax Officer's jurisdiction to reopen anassessment under section 34 of Income-tax Act, 1922, depends upon theissuance of valid notice. If notice issued by him is invalid for anyreason entire proceedings taken by him would become void for want ofjurisdiction." Weaccordingly hold that any assessment made pursuant to invalid notice isrequired to be annulled. Other decisions relied by Shri Parthasarathi alsosupports our above view. Similar view has been adopted by this Tribunal in thecase of Shri M. Pratap Chittiappa v. Dy. CIT in IT(SS)A No.31/Bang/04, dated 25-10-2004. We accordingly confirm order of LearnedCIT(A) annulling assessment. Itis contention of learned D.R. that assessee has filed return muchlater and he is not aggrieved. In our opinion this argument is not tenable inlaw. It is settled principle that there cannot be waiver against law.Hon'ble Gujarat High Court in case of P.V. Doshi (supra) heldthus: "Therecould never be waiver of mandatory provision for simple reason that insuch cases jurisdiction could not be conferred on authority by mereconsent, but only on conditions precedent for exercise of jurisdictionbeing fulfilled. If jurisdiction cannot be conferred by consent, there would beno question of waiver, acquiescence or estoppel or bar of res judicatabeing attracted because order in such cases would lack inherentjurisdiction and would be void order or nullity. If original order iswithout jurisdiction it would be nullity confirmed in further appeals. Theappellate order of Tribunal thereon would also be nullity and theTribunal cannot confer any jurisdiction on Income-tax Officer by making aremand order. Thisis also not curable defect under section 292B. We accordingly annul theassessment. " Inthe present case, notice under section 158BD dated 8-2-2000 required theassessee to file return "within 15 days of service of notice".Applying above ratio, we hold that assessment is invalid as theassessment is pursuant to invalid notice issued. defect is not curableunder provisions of section 292B of Act. Similar view has been adoptedby ITAT, Agra Bench in case of Vinod Kumar v. Asstt. CIT[2006] (Mag.) We accordingly cancel assessment made. 8.As regards assessment of undisclosed income, we find that no material was foundduring search conducted at premises of Mr. K. R. Prabhu which relates tothe assessee. When search was conducted at premises of K. R. Prabhu, asurvey under section 133A was conducted at premises of assessee. reportof survey is appearing at page 126 to 128 of paper book. In saidsurvey, entire material relating to income from film "Indian"as well as appearance of cash credits in books of account were found. Anorder under section 158BC can be passed in accordance with provision ofChapter XIV-B where search is initiated under section 132 or books ofaccounts, other documents or assets ore requisitioned under section 132A.Similarly, under section 158BD, where Assessing Officer is satisfied thatundisclosed income belongs to person other than person with respect towhom search was made under section 132, books of accounts, other documentsor assets seized are to be handed over to Assessing Officer havingjurisdiction over such other person and Assessing Officer shall proceedagainst such other person as per provision of Chapter XIV-B. Thus, in both thecases, no order under section 158BC can be passed unless search is conductedunder section 132 in respect of assessee or material is found relatingto assessee during course of search in case of any other person. Whenthe material was found during survey under section 133A in case of assesseehimself and such material is to be used against assessee to computeundisclosed income, in our opinion, Assessing Officer cannot resort toprovision of section 158BC but should have taken recourse to regularassessment. survey under section 133A cannot be equated with search undersection 132. Reading assessment order as well as argument on behalf ofthe appellant, it is seen that no material was found during search at thepremises of K. R. Prabhu which relates to assessee, which can form basisfor assessment of undisclosed income under Chapter XIVB. We accordingly setaside order under section 158BC. 9.As regards merits of addition, we find that account of film"Indian" is maintained in regular course. same was availablewhen survey was conducted under section 133A. income if any pertains toassessment year 1996-97 for which due date to file return of income has notexpired on date when search was conducted at premises of K. R. Prabhuon 11-10-1996. assessee has also paid advance tax. As held in case of Dr.(Mrs.) Alka Goswami (supra) and in case of Kumkum Kohli (supra),the income attributable to extent of advance tax paid cannot be consideredas undisclosed income. Accordingly, income from film "Indian"cannot be brought to tax as undisclosed income. 9.1As regards addition of unexplained cash credit, we find that such cashcredits were appearing in regular books of account maintained by assessee.No material is found during search, which suggests that such cash credits areeither ingenuine or bogus. Since no material is found, accordingly such cashcredits cannot be considered as undisclosed income as per provisions of section158B(b). We accordingly delete addition in respect of unexplainedcash credits also. Inthe result, assessment order is set aside and appeal is allowed. *** N.R. Sudhir v. Deputy Commissioner of Income-tax (Inv.)