Asstt.Commr.Of Income Tax & Anr vs M/S Hotel Blue Moon

The Supreme Court held that the issuance of notice under Section 143(2) of the Income Tax Act, 1961 is mandatory for block assessments under Chapter XIV-B when assessing undisclosed income detected during a search under Section 132. The Court disagreed with the Appellate Tribunal's view that non-issuance of such notice is merely a procedural irregularity. The High Court's ruling was affirmed, establishing that the provisions of Section 142 and subsections (2) and (3) of Section 143 must be adhered to in block assessments, thereby upholding the necessity of timely notice issuance.