TMI Blog2015 (3) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... van, JM And Abraham P. George, AM,JJ. For the Appellant : Shri S Ramasubramanian, CA For the Respondent : Shri Farahat Hussain Qureshi, CIT-II(DR) ORDER Per N.V. Vasudevan, Judicial Member This appeal by the assessee is against the order dated 2.7.2010 of CIT(Appeals), Bangalore relating to assessment year 2000-01. 2. The assessee is in the business of manufacture, sale and servicing of FRP Rotor blades for windmills. The assessee was earlier known as L M Glassfiber (India) Pvt. Ltd. and has changed its name to LM Wind Power Blades (India) Private Ltd. The return of income filed by the Assessee for AY 2000-01 was processed u/s. 143(1) of the Act on 27.3.2002. In the said return, assessee had claimed depreciation of technical know how of a sum of ₹ 31,44,375. According to the assessee, it had under an agreement dated 17.1.2000 acquired technology for manufacture of rotor blades LAM 15.4. It is also claim of the assessee that technology was used by the assessee during the previous year and assessee had manufactured LM 15.4 blades and sold them to one of its customers under Invoice LMGI 038/99-2000 dated 11.2.2000. According to the assessee, it was ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquiring the know-how, the assessee did not deduct tax at source u/s. 195 of the Act, nor had the assessee paid the cost to the non-resident. The AO also held that interest income cannot be considered as profits eligible for deduction u/s. 80IA of the Act. 6. In appeal before the CIT(Appeals), the assessee submitted that the notice u/s. 148 of the Act was not served on the assessee and therefore the order passed u/s. 147 of the Act has to be quashed as a nullity. The assessee further pointed out before the CIT(A) that the only notice received by it was the notice u/s. 143(2) and 142(1) and in response to the said notice dated 28.11.06, the AR of the assessee appeared before the AO on 27.12.06. The assessee submitted that this notice had been served on the assessee at the address mentioned in the return of income which is also registered office of the assessee viz., Plot No.61 and 62, Koramangala Industrial Area, Hoskote, Bangalore 562 114. The assessee also pointed out that in the course of assessment proceedings before the AO, the AR of the assessee orally submitted that no notice u/s. 148 of the Act was served on the assessee. It was also claimed that the AO informed the AR t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(2) r.w.s.147 of I.T.Act dated 28-11-2006. 7. Aggrieved by the aforesaid findings of the CIT(Appeals), the assessee has raised ground No.3 before the Tribunal. We deem it appropriate to take up the said grounds for consideration as a preliminary issue. 8. The ld. counsel for the assessee submitted before us that it is mandatory for the AO to serve notice u/s. 148 of the Act. It was his submission that this is a fundamental requirement before completing the assessment u/s. 147 of the Act. In this regard reliance was placed on the decision of the Hon'ble Gauhati High Court in CIT Vs Mintu Kalita 253 ITR 334. It was held therein that in view of the Supreme Court decision in R.K. Upadhyaya Vs Shanabhai P. Patel, 166 ITR 163, service under the new Act is not a condition precedent to conferment of jurisdiction on the Income Tax Officer to deal with the matter but it is a condition precedent to the making of the order of reassessment. In Mintu Kalitas case (supra), it was held that in the absence of a proper service of notice u/s 148, the AO cannot make an assessment u/s 147 of the Act. It was further held that just because the assessee responds to notice issued u/s 142(1), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to prove that there is a valid service of notice on the authorized person. Reliance was placed on the decision in the case of CIT Vs Miscounted India Ltd. 345 ITR 58 Hind Book House Vs Income Tax Officer 274 ITR (AT) 61. According to him the CIT(A) failed to appreciate that the service of notice u/s 148 of the Act is a condition precedent to making an assessment. Just because a notice u/s 143(2) r.w.s 147 was served on the Assessee it cannot be said that it is a valid service of notice u/s 148. The non-valid service of the notice u/s. 148 cannot be cured by issuing a notice u/s 143(2). It was submitted that the distinction made by the learned CIT(A) that in Mintu Kalita's case the notice u/s 142(1) is involved whereas the present case involves a notice u/s 142(2) rws 147 is totally erroneous. It was submitted that a notice u/s 142(1) deals with enquiry before assessment and the appearance of the employee in terms of this notice to produce such books or documents as the assessing officer may require cannot be deemed to be knowledge of the proceedings u/s 147 of the Act. It was his submission that the learned CIT(A) has completely failed to notice that the notices u/s 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t available in the office and the records for the said period were weeded out. There is no evidence in the form of postal acknowledgment when a letter is lodged for being sent by RPAD. The ld. DR, however, submitted that since the assessee has participated in the assessment proceedings, the provisions of section 292BB of the Act will be applicable and therefore the assessee cannot be permitted to challenge service of notice and on that ground seek to set aside the order of assessment as a nullity. 12. We have given a very careful consideration to the rival submissions. It is clear from the records that there is no evidence for the notice u/s. 148 of the Act dated 19.9.05 having been dispatched. There is no evidence, admittedly, for the said notice having been served on the assessee as well. It is also clear from the notice dated 19.9.05 that the AO originally started writing the address given in the return of income, but for the reasons best known to him, had struck off the said address and has addressed the notice to '310, Raheja Arcade, 1/1, Koramangala Industrial Layout, Bangalore'. These circumstances throw suspicion on whether notice u/s. 148 was issued at all to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 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 proceeding 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. 17. The Special Bench of the Delhi Tribunal in the case of Kuber Tobacco Products Pvt. Ltd. v. DCIT, 310 ITR (AT) 300 (Del)(SB) held as follows:- No doubt, the issue of notice as well as service of notice is a procedural section, but when the same has time limitation, the obligation of the Department to issue notice within a prescribed time becomes the right of the assessee to receive that notice in time to validly commence the proceedings and validly completing the same. First and foremost rule of construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigant to the extent that he is debarred from taking a plea in the appellate proceedings to challenge the validity of the same on the ground of valid issuance/service of notice required to be given by the statute in a case where assessee has appeared in such proceedings or cooperated in the inquiry relating to assessment or reassessment. Therefore, it has to be held that s. 292BB cannot be construed to have retrospective operation and it has to be applied prospectively. Having arrived at the conclusion that s. 292BB has no retrospective effect and is to be construed prospectively, it has to be held that prior to 1st April, 2008 i.e., upto 31st March, 2008, as per s. 292BB, the assessee is not precluded from taking any objection regarding invalidity of assessment/reassessment on the ground of improper/invalid issuance/service of a notice. (emphasis supplied) 18. In the light of aforesaid judicial pronouncements, we are of the view that the objections raised by the ld. DR before us cannot be sustained. 19. In view of the fact that the order of reassessment is annulled on the preliminary issue, we do not deem it necessary to take up the other issues raised by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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