- (1.) Since the registry has not been able to send the files on account of fire in the court premises, learned counsel for the Revenue has furnished paper books which are taken on record. We proceed to decide the matter after hearing learned counsel for the Revenue. Both the above appeals are inter-connected as I. T. A. No. 558 of 2006 is on the issue of quantum while I. T. A. No. 342 of 2009 is on the issue of penalty.
(2.) I. T. A. No. 558 of 2006 has been filed by the Revenue under section 260A of the Income-tax Act, 1961 (in short "the Act") against the order dated February 28, 2006, passed by the Income-tax Appellate Tribunal, Delhi Bench "B", New Delhi, in I. T. A. No. 8/Del/2005 for the block period from April 1, 1988, to April 16, 1999 (since reported as Navin Verma v. Asst. CIT,2006 283 ITR 83. Learned counsel for the Revenue fairly states that even though three questions were initially claimed, this court admitted the appeal only on the following two questions declining the third question at the time of admission on March 2/2007; (i) Whether the hon'ble Income-tax Appellate Tribunal was right in holding that the notice under section 158BD becomes defective merely because the Assessing Officer has allowed less than 15 days time to file the return ? (ii) Whether the hon'ble Income-tax Appellate Tribunal, having held the notice under section 158BD to be defective, erred in holding that the defect was not curable under section 292B of the Act ?
(3.) A search and seizure operation was carried on at the residence of Sh. Subhash Verma and Krishna Verma and on the basis of the material found, notice under section 158BD was issued to the assessee. The assessee did not file any return. The Assessing Officer on the basis of material found, made assessment under section 158BD read with section 158BC(c)/144 assessing the undisclosed income to be Rs. 1,20,14,405. The addition was partly upheld by the Commissioner of Income-tax (Appeals) against which cross-appeals were filed before the Tribunal by the assessee as well as the Revenue. The Tribunal allowed the appeal of the assessee only on the ground that the assessment proceedings were vitiated on account of the assessee having not been given clear period of 15 days for filing the return.;