TMI Blog2018 (6) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... e : Shri Devendra H. Jain For The Department : Ms. Pooja Swaroop ORDER PER C.N. PRASAD 1. This appeal and cross objection are filed by the assessee and Revenue respectfully against the order of the Ld. Commissioner of Income-tax (Appeals)-41 Mumbai dated 08.03.2016 for the Assessment Year 2011-12. 2. In its appeal the assessee challenged the order of the Ld.CIT(A) in holding that the Assessment Order passed by the Assessing Officer is valid though the notice u/s. 143(2) was not issued to the assessee which is a mandatory requirement. 3. Briefly stated the facts are that, the assessee filed return of income on 30.09.2011 declaring income of ₹.80,701/-. Subsequently, assessment was reopened by issue of notice u/s. 148 of the Act and re-assessment was completed on 28.03.2014 u/s. 143(3) read with 147 of the Act determining the income at ₹.1,90,85,290/-by making addition of ₹.1,90,04,592/- as unexplained expenditure u/s. 69C of the Act with respect to certain purchases made by the assessee treating them as non-genuine. Assessee preferred appeal before the Ld.CIT(A) and by way of additional ground assessee questioned the validity of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in the case of Raj Files Stationers P. Ltd. v. ITO in ITA.No. 7553/Mum/2016 dated 05.07.2017 wherein the Tribunal following the decision of the Hon'ble Bombay High Court in the case of ACIT v. Geno Pharmaceuticals Ltd., (supra) quashed the assessment framed in the absence of notice u/s. 143(2) of the Act. 5. Ld. DR vehemently supported the orders of the authorities below. 6. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. The preliminary issue to be decided is, as to whether the assessment is valid in the absence of issue and service of notice u/s. 143(2) of the Act. The Hon'ble Jurisdictional High Court in the case of ACIT v. Geno Pharmaceuticals Ltd., (supra) held as under: - 4. So far as Tax Appeals No.77/2012 and 78/2012 are concerned, in both these appeals, the ITAT has held that the issuance of notice after reopening of the case was mandatory and this order is under challenge. It is contended that the said order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01.04.2008, in which it is stated that in a case where an assessee has appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 143(2) by the revenue, would, therefore, inure to the benefit of the assessee, even though as noticed above, the contention of assessee that it was not aware of the proceedings under section 143 for the assessment year 2009-10 cannot be accepted. However, when the statute makes it imperative that notice under section 143(2) is to be issued, the omission or failure would then hit at the root of the jurisdiction. 'The extended question then is whether even if the assessee is deemed to have participated in the proceedings under section 143, even without the Assessing Officer having issued the mandatory notice, would the revenue be entitled to the benefit provided under section 292BB of the Act. Section 292BB creates an estoppel against the assessee in claiming that no notice has been served on him, if he has participated in the proceedings. However, the said section does not in any manner grant any privilege to the Assessing Officer in dispensing with the issuance of a notice under section 143(2) of the Act. Since the jurisdiction under section 143 is founded on the issuance of a notice under section 143(2), the Assessing Officer could have assumed juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the jurisdiction u/s. 143(3) of the Act would be invalid. While coming to such conclusion the Hon'ble Allahabad High Court also considered the decision of the ACIT v. M/s. Hotel blue Moon [321 ITR 362] and held as under: - Under clause (ii) of sub-section (2) of Section 143, the Assessing Officer is required to serve, on the assessee, a notice requiring him to attend the office or to produce evidence on which the assessee may rely in support of the return, if the Assessing Officer considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner. Under the proviso to clause (ii), it has been specified that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. Service on the assessee of a notice within the period prescribed by the proviso presupposes the issuance of a notice for, it is only when a notice is issued, that it can be served. Thereafter, the provisions of sub-section (3) of Section 143 of the Act stipulate that on the date specified in the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply where the assessee has raised such objection before the completion of such assessment or reassessment. Section 292 BB of the Act was inserted by the Finance Act, 2008 with effect from 1 April 2008. Section 292 BB of the Act provides a deeming fiction. The deeming fiction is to the effect that once the assessee has appeared in any proceeding or cooperated in any enquiry relating to an assessment or reassessment, it shall be deemed that any notice under the provisions of the Act, which is required to be served on the assessee, has been duly served upon him in time in accordance with the provisions of the Act. The assessee is precluded from taking any objection in any proceeding or enquiry that the notice was (i) not served upon him; or (ii) not served upon him in time; or (iii) served upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to Section 292 BB of the Act, however, carves out an exception to the effect that the Section shall not apply where the assessee has raised an object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and obviates a challenge that the notice was either not served or that it was not served in time or that it was served in an improper manner, where the assessee has appeared in a proceeding or cooperated in an enquiry without raising an objection. Section 292 BB of the Act cannot come to the aid of the revenue in a situation where the issuance of a notice itself was not within the prescribed period, in which event the question of whether it was served correctly or otherwise, would be of no relevance whatsoever. Failure to issue a notice within the prescribed period would result in the Assessing Officer assuming jurisdiction contrary to law. 7. In the case on hand we see that the notice u/s. 143(2) itself is dated 19.01.2015 which is beyond the date prescribed for issue of notice i.e. 30.09.2012. In such circumstances the Assessing Officer could not have issued any notice prior to 30.09.2012. Therefore, admittedly in this case as the notice u/s. 143(2) was issued beyond 30.09.2012 and in view of the decision of the Hon'ble Allahabad High Court the Assessing Officer could not have assumed jurisdiction in the absence of valid issue of notice u/s. 143(2) of the Act. Thus, r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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