TMI Blog2012 (3) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer under section 143(2)(ii) is bad in law and we accordingly cancel the same. - - - - - Dated:- 30-3-2012 - Order The order of the Bench was delivered by R. S. Padvekar (Judicial Member).-In this appeal the assessee has challenged the impugned order of the learned Commissioner of Income tax (Appeals)-26, Mumbai dated October 19, 2010, for the assessment year 2007-08. The assessee has challenged the legality and validity of the assessment order on the issue of no service of notice under section 143(2) of the Act and this issue arising from grounds Nos. 2, 3 and 4, which read as under : "2. The assessment order passed is ab initio void, inasmuch as, no notice under section 143(2) of the Income-tax Act, 1961 was served upon the appellant within the statutory time-limit prescribed vide proviso to section 143(2) of the Income-tax Act, 1961. 3. The learned Commissioner of Income-tax (Appeals) has grossly erred in upholding the validity of assessment order even after finding that no notice under section 143(2) of the Income-tax Act, was served upon the appellant. Reasons assigned by him are wrong and contrary to the provisions of the Income-tax Act, read with judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "3.2 I have considered the contention of the learned authorised representative and perused the assessment order and copy of notices under reference. I find that learned authorised representative has wrongly twisted the facts of the case in written submission filed on October 18, 2010 because of the obvious fact that the very second line of the assessment order reveals the fact notice under section 143(2) was issued on August 4, 2009 and was served upon the appellant through recognised process. The argument that notice under section 143(2) dated August 4, 2009 was sent at the address of C/o. 13/15, Room No. 27, Anantwadi, 3rd floor, Bhuleshwar, Mumbai, Maharashtra which is not the address of the appellant but as per return of income filed on September 27, 2008 his address is 'Shri Ashok Bandmal Bafna, 1st floor, Room No. 7 and 87, Kika Street, Gulawadi, Mumbai, Maharashtra' and different from the address mentioned by the Assessing Officer in the notice and envelope through which such notice was sent, is not tenable because of the very important fact that this address of 13/15, Room No. 27, Anantwadi, 3rd floor, Bhuleshwar, Mumbai was the actual address appearing on permanent accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income and proceeding was duly participated by his authorised representative. Therefore, I do not see any substance or merit in such claim that notice under section 143(2) was not issued or served within the stipulated time. It is here pertinent to mention that by virtue of section 292BB of the Income-tax Act, 1961 applicable with effect from April 1, 2008 such objection is illegal. The provision of law is as under : 'Where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceedings or inquiry under this Act that the notice was (a) not served upon him ; or (b) not served upon him in time ; or (c) served upon him in an improper manner : Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.' 3.2.2 It is further important to note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 143(2) has to be issued within one year. Here in this case it is an admitted fact that notice under section 143(2) was issued on August 4, 2009 whereas the return of income was filed on September 27, 2008. Therefore, required notice was issued, as held by the hon'ble Supreme Court (supra), within one year after filing of return of income, therefore, the case law relied upon by the learned authorised representative goes against the appellant because of the fact that the learned Assessing Officer has issued this notice within one year and further it is also relevant to mention here that it was sent through Governmental agency, i.e., post office at the address given by the appellant in permanent account number form. 3.2.3 If the notice contains a small error which does not in any way mislead the assessee, the notice is not bad and an assessment made on default in compliance with is not necessarily illegal Rajmani Devi v. CIT [1937] 5 ITR 631 (All) ; Lachhman Das Babu Ram v. CIT [1930] 4 ITC 61 (All). For sales tax cases on the point see Gollapudi Pullayya Co v. State of Andhra [1958] 9 STC 24 (AP), Kondapalli Viraraju v. The State of Andhra [1958] 9 STC 42 (AP) ; Harmukh Rai J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment proceedings through his authorised representative Shri R. T. Jain, chartered accountant and who availed of full opportunity in the assessment proceedings and hence, the stand taken by the assessee that there was no opportunity to the assessee and there was violation of natural justice by the Assessing Officer has no basis. The learned Commissioner of Income-tax (Appeals) has also referred to the wrong address mentioned in the notice sent by the Assessing Officer under section 143(2) of the Act by stating that the notice was sent as per the address appearing on application for permanent account number in form 49A. Now, the assessee has raised the serious grievance against the findings of the learned Commissioner of Income-tax (Appeals). Learned counsel reiterated the argument made before the learned Commissioner of Income-tax (Appeals). Learned counsel takes us through the paper book where the copy of notice under section 143(2) dated August 4, 2009 is placed and submits that as per the copy of the acknowledgment of the return of income, which is placed in compilation, the address of the assessee was given as : "Room No. 7, 87, Kika Street, Gulalwadi, Mumbai, Maharas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty proceedings initiated by the Assessing Officer under section 271(1)(c) and also before the learned Commissioner of Income-tax (Appeals). As per the return of income filed on September 27, 2008, the following address was given : "Shri Ashok Bandmal Bafna Aman Impex, 1st floor, Room No. 7, 87, Kika Street, Gulalwadi, Mumbai, Maharashtra" There is no dispute about the facts that the notice sent by the Assessing Officer under section 143(2) was sent to a different address. It is true that the assessee made the appearance for the assessment proceedings through his chartered accountant and the assessment was completed after hearing the assessee. The justification of the Assessing Officer for sending the notice on the different address, i.e., 13/15, Room No. 27, Anantwadi, 3rd floor, Bhuleshwar, Mumbai is that the said address was given by the assessee in the application for permanent account number. Under this situation, can it be said that as the notice under section 143(2) was not served on the assessee, which is an undisputed fact, but as the assessee appeared in the assessment proceedings and hence, the assessment proceedings are not vitiated. So far as present issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provisions of section 143(1) are excluded. But section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under section 143(2). However, if an assessment is to be completed under section 143(3) read with section 158BC, notice under section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with. The other important feature that requires to be noticed is that section 158BC(b) specifically refers to some of the provisions of the Act which require to be followed by the Assessing Officer while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This section even speaks of sub-sections which are to be followed by the Assessing Officer. Had the intention of the Legislature been to exclude t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by this court in the case of Maganlal v. Jaiswal Industries [1989] 4 SCC 344, wherein this court while dealing with the scope and import of the expression 'as far as practicable' has stated 'without anything more the expression "as far as possible" will mean that the manner provided in the code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied.'" In the case of CWT v. HUF of H. H. Late J. M. Scindia [2008] 300 ITR 193 (Bom) the hon'ble High Court of Bombay has confirmed the order of the Tribunal following the decision in the case of G. N. Scindia (supra). In that case also the issue was whether it is mandatory to issue the notice under section 143(2) of the Act to the assessee even in the case of block assessment when the return filed by the assessee is selected for verification. In the case of CWT v. HUF of H. H. Late J. M. Scindia [2008] 300 ITR 193 (Bom) the issue was in respect of reassessment framed under section 17 of the Wealth-tax Act. The assessee contended that as per the provisions of section 17 of the Wealth-tax Act, it is mandatory on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age used in section 16(2). Parliament in the case of the Income-tax Act under section 148 noting the omission in the section which was likely to affect assessments done, pursuant to powers conferred under section 147, inserted the proviso to section 148 to protect the assessments already done. It is true that merely because Parliament has, as a matter of abundant caution, intervened and amended the provisions of section 148, it cannot be read to mean that there is a lacunae. Two High Courts, Madras and Gauhati, have taken a view that notice under section 143(2) is mandatory even in a case of reopening of assessment under section 148 of the Income-tax Act. In our opinion, the view taken by the two High Courts reflects the language of section 147. Therefore, even in a case of reopening of assessment under section 147, the Assessing Officer is bound to comply with the requirement of section 143(2) of the Income-tax Act. 10. Even independently, we have examined the scope and effect of sections 14 to 16 on the one hand and section 17 on the other. In our opinion, there is no escape from arriving at the conclusion that when the Assessing Officer invokes section 17, the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to rule of interpretation described above, section 292BB cannot be construed retrospectively. 40. According to the abovementioned principles laid down by the hon'ble Supreme Court, every litigant has a vested right in substantive law, but no litigant has such right in procedural law. No doubt, issue and service of notice though may relate to procedural law, but where procedural statute creates a new disability or obligation and imposes new duties in respect of transactions already accomplished, then the statute cannot be construed to have retrospective effect. 41. It has already been pointed out that issue and service of notice in the manner prescribed by the statute has played a vital role in determining the validity or otherwise of assessment/reassessment and other proceedings under the Act and where the courts have found defect either in the notice or in its proper service, the validity of assessment/ reassessment and other proceedings has been struck down by the courts subject, of course, to section 292B of the Act introduced with retrospective effect from October 1, 1975. Thus, to challenge the validity of a particular action of the Department of making assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that for the assessment year 1957-58 the company was assessed to agricultural income-tax under the Kerala Agricultural Income-tax Act, 1950 and in the assessment surcharge at 5 per cent. on the agricultural income-tax and super-tax was levied and collected from the assessee under the provisions of the Surcharge Act. The levy of surcharge was agitated by the assessee on the ground that the Surcharge Act came into force only from September 1, 1957 and, therefore, it does not have retrospective effect and surcharge could not be levied for the assessment year 1957-58. Such contention of the assessee was rejected by the Assessing Officer as well as by the first appellate authority. However, the Tribunal held that surcharge could not be levied as the Surcharge Act did not have retrospective operation unless there was a specific provision therein to that effect and the question of law was referred to the Kerala High Court to state that whether surcharge could be levied for the assessment year 1957-58. The hon'ble High Court decided the question in favour of the Revenue and, thus, the matter went to the hon'ble Supreme Court and their Lordships of the hon'ble Supreme Court have observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee for the assessment year 194647. The Tribunal upheld that decision and referred the question, whether the sum representing the difference between the original cost and the written down value was properly included in the assessee's total income computed for the assessment year 1946-47. It was argued that the fourth proviso to section 10(2)(vii) of the Income-tax Act (inserted by the Amendment Act of 1946 with effect from May 4, 1946) under which the inclusion of the amount was justified by the Department, had no application to the case. The learned judges held that as it was the Finance Act of 1946 that imposed the tax for the assessment year 1946-47, the total income had to be computed in accordance with the provisions of the Income-tax Act as on April 1, 1946 ; that as the amendments made by the Amendment Act of 1946 with effect from May 4, 1946, were not retrospective, they could not be taken into consideration merely because the assessee was assessed after that date and that the assessee was not liable to pay tax on the sum because the fourth proviso to section 10(2)(vii) of the Income-tax Act under which it was sought to be taxed was not in force in respect of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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