TMI Blog2003 (8) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... ard with regard to admission of ground No. 11. We have also directed the ld. D.R. to produce the assessment records. During the course of hearing, the ld. D.R. produced the assessment record, which was perused by us. We found that the order sheet dated 22-9-1999 was not signed by the Assessing Officer and the next order sheet dated 8-6-2002 was also not signed by the Assessing Officer. We also found from assessment record that even copy of the notice under section 143(2) dated 22-9-1999 was also not available. The assessment record was returned to the ld. D.R. and the ld. D.R. was directed to clarify the above position on the date of hearing adjourned to 24-4-2003. On 24-4-2003, the ld. D.R. filed the Written Submissions but did not comply with our directions issued on 2-4-2003. After hearing both the parties at length, we have rejected the objections of the ld. D.R. and ground No. 11 (additional ground) mentioned above was accordingly admitted for hearing vide our order dated 5-5-2003. The appeal was adjourned for hearing for 23-5-2003 on this ground being stay granted matter. Accordingly, the appeal was refixed for hearing. 3. We have heard Sri S.K. Garg, Advocate for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemplate such situation if notice under section 143(2) is not served. He has further argued that penal consequences are provided in proviso to section 143(2) of the Income-tax Act, 1961. He has further argued that even if no notice is served, the assessment order will not be nullity or non est . He has further argued that it may be an irregularity which is curable. He has further argued that section 153(2A) and section 275 of the I.T. Act show that in particular situation, no assessment order or penalty order could be passed but nothing is provided in section 143(2) that no assessment order may be passed. He has further argued that the provisions contained under section 143(2) are directory in nature and are not mandatory. He has relied upon the judgment of Hon ble Supreme Court in State of U.P. v. Harendra Arora [2001] 6 SCC 392, Topline Shoes Ltd. v. Corporation Bank [2002] 6 SCC 33, T.V. Usman v. Food Inspector [1994] 1 SCC 754, P.V. Doshi v. CIT [1978] 113 ITR 22 (Guj.), Seth Badridas Daga v. CIT [1949] 17 ITR 209 (PC) and CIT v. Khemchand Ramdas [1938] 6 ITR 414 (PC). Mr. Chopra further argued that in this case the Assessing Officer issued notice unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. (3) On the day specified in the notice issued under sub-section (2), or as soon after wards as may be, after hearing such evidence as the assessee may produce and such other evidence as the Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment." 7. We find that proviso to section 143(2) was inserted by Direct Tax Laws (Second Amendment) Act, 1989 with effect from 1-4-1989 which was further substituted by Finance (No. 2) Act, 1991, with effect from 1-10-1991 by which period of twelve months was provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Allahabad High Court giving answer to this question held that the issue of such a valid notice was imperative and ultimately held that the notice under section 23(2) was an illegal notice. The ld. Counsel also relied upon the order of the I.T.A.T., Mumbai Bench in the matter of Uma Polymers (P.) Ltd. ( supra ) in which Mumbai Bench of I.T.A.T. held that no assessment under section 143(3) can be framed without a valid notice issued under section 143(2) of the Act. It was also held that the provisions of section 292B is to save the validity of the notice merely by reason of any mistake, defect or omission therein and would not apply to the cases where notice itself is never issued. It was also held that the notice under section 143(2) is not merely procedural in nature but is a mandatory provision and since no notice was issued under section 143(2) of the Act, therefore, assessment was held to be invalid. 8. The I.T.A.T., Allahabad Bench in the matter of Smt. Saraswati Devi ( supra ), considered the facts of the case in which the assessment was framed without service of valid notice under section 143(2) within the period of 12 months from the end of the month in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... void or inadmissible in nature. Those Rules were held to be directory and not mandatory as the accused was, in no way, was prejudiced on merits. 12. The Hon ble Supreme Court in the matter of Topline Shoes Ltd. ( supra ) while considering the provisions of Consumer Protection Act was of the view that the time limit comprising the initial period and the extended period prescribed in, for the filing of version of opposite party, was held to be directory and not mandatory. 13. Mr. Chopra also referred to the extract taken from page 114 of Bhavnagar University v. Palitana Sugar Mills (P.) Ltd. [2003] 2 SCC 111 1 in which on interpretation of Statute it was stated that "When statute requires a public functionary to do a thing within a specified time and also provides consequences for inaction, it must be held to be mandatory." 14. The ld. Standing Counsel for the department relied upon the judgment of Hon ble Gujarat High Court in the matter of P.V. Doshi ( supra ) in which it was held that the jurisdictional provision which was mandatory and enacted in public interest could never be waived and the want of jurisdiction was discovered by the Appellate Assistant Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 292B of the Income-tax Act is that no return of income, assessment, notice, summons or other proceeding 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 etc. is in substance and effect in conformity with or according to the intent and purpose of this Act. However, if no notice is issued, then there could not be any mistake or defect. The intention of the Legislature providing proviso to section 143(2) was that no notice under that sub-section would be served on the assessee after expiry of 12 months from the end of the month in which return is furnished. The intent and purpose of the Income-tax Act is defeated if the notice is served after the period of limitation as provided in the proviso to section 143(2) of the Act. Therefore, the contention of the ld. Standing Counsel is rejected. The contention of the ld. Standing Counsel is also liable to be rejected comparing the other provisions of law giving other situations and providing limitation as the same are not connected with the process or assessment as provided under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relevant to be reproduced here. However, it is necessary to mention the fourth reason - "Fourthly the assessment order passed in this case is a part of the record and that says that a notice under section 143(2) was issued within the period of time referred to in the proviso to section 143(2)." We find mention in the assessment order that notice under section 143(2) of the Act dated 22-9-1999 was issued by the predecessor of the Assessing Officer. However, none attended from the assessee s side. The requirement of proviso to section 143(2) shows that not only the notice under section 143(2) should be issued before 12 months from the end of the financial year in which return is furnished but shall also be served upon the assessee. The additional ground raised above related to the important point of jurisdiction and we do not find copy of the notice in the assessment record. The Assessing Officer has nowhere mentioned in the assessment order that notice under section 143(2) was served within the time upon the assessee. We have rejected the objection of the ld. D.R. and allowed the additional ground for the purpose of disposal of the appeal vide our order dated 5-5-2003 and we ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Dhansukhlal J. Gajjar ( supra ). We are afraid how this decision would be of any help to the contention of the ld. Standing Counsel with regard to non-signature of the Assessing Officer on the Order Sheet. In this case, wealth-tax references were sent to the Hon ble High Court on certain questions and one of the question No. 3 is relevant to be reproduced: "3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the assessment was not completed within the statutory time limit prescribed under section 17A of the Wealth-tax Act, 1957, notwithstanding the fact that the assessment order was made on March 28, 1979, and tax computation sheets (assessments/refund forms ITNS 150) were made on March 30, 1979." It was held by the Tribunal that there was no determination of tax payable as shown in the forms on March 30, 1979, and hence the time limit for making the assessments expired on March 31, 1979, and further that as determination of the wealth-tax payable took place on April 17, 1979, when the demand notice was signed by the Wealth-tax Officer. It is also mentioned that the Tribunal inspected the assessmen ..... 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