TMI Blog2015 (5) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... ant : Shri Surinder Jeet Singh For the Respondent : Shri J D Mistry ORDER Per Vijay Pal Rao,JM. This appeal by the revenue and cross objection by the assessee are directed against the order dated 21.04.2009 of CIT|(A) for A.Y. 2006-07. The revenue has raised following grounds in its appeal:- 1. On the facts and in the circumstances of the case, Ld. CIT(A) erred in admitting the evidence in respect of FMV as on 01/04/1981 and allowing indexation thereof in contrary to Rule 46A(2) (3) of the I.T. Rules .. 2. On the facts and in the circumstances of the case, Ld. CIT(A) erred in taking contrary decision that the assessee has incurred a long term capital loss in respect of the impugned transaction and yet holding that the subsequent transfer of stock-in-trade for consideration of ₹ 35,00,96,000/- did not amount to transfer or sale of stock-in-trade. 3. The appellant prays that the order of Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. In the Cross Objection, the assessee has raised following grounds:- 1. Preliminary objections: (a) The appeal has been filed by the Assistant Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r want of jurisdiction due to no service of notice u/s 143(2), was not taken by the assessee before the CIT(A). On this point, the Ld. Senior Counsel of the assessee has submitted that this objection was very well taken by the assessee during the course of assessment proceedings. He has referred the letter dated 8.08.2008 and submitted that the assessee has specifically raised the objection that any notice u/s 143(2) of the Act has not been received till date. Thus the Ld. Senior Counsel has submitted that this is not a new plea or ground raised by the assessee before the Tribunal but the objection was raised by the assessee before the Assessing Officer. Since the notice u/s 143(2) gives the jurisdiction to Assessing Officer to frame the scrutiny assessment and it is not a procedural irregularity, therefore, the same is not curable. Failure on the part of Assessing Officer to issue notice u/s 143(2) within the stipulated time period renders the assessment void and invalid. He has relied upon the Judgment of Hon'ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon 321 ITR 362 as well as decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Wealth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s authorized person. The onus is on the Assessing Officer to establish that there was a valid service on the assessee within the stipulated time. He has referred the alleged notice u/s 143(2) and submitted that there is no identification to whom the notice was served and in the absence of identification, there is no valid service on the assessee. 4. On the other hand, the Ld. DR has submitted that a notice u/s 143(2) along with notice u/s 115WE(2)were served on the assessee on 23.10.2007 at 1.20 P.M. He has referred the copy of the notice on which the acknowledgement of the receipt of the notice along with telephone no. is mentioned. The Ld. DR has submitted that the assessee, thereafter, appeared before the Assessing Officer and even notice u/s 142(1) dated 20.06.2008 was issued to the assessee through Speed Post was served upon the assessee. Once the assessee has appeared and participated in the assessment proceedings, then the case falls u/s 292 BB of the Income Tax Act and it shall be deemed as the notice u/s 143(2) was duly served upon the assessee in accordance with the provisions of the Act. He has further submitted that the assessee has not raised any objection for non r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal objection raised by the assessee and as per the Judgment of Hon'ble Jurisdictional High Court in the case of Prashant S. Joshi Vs. ITO 324 ITR 154. A fresh plea can be raised before the appellate authority. Therefore, we do not find any legal hurdle in considering the objections raised by the assessee in Cross Objection regarding validity of assessment for want of service of notice u/s 143(2). We find that the first entry in the assessment proceedings is dated 08.08.2008 and prior to that date there is nothing on the assessment records to show that any notice u/s 143(2) was issued by the Assessing Officer except the copy of notice dated 20.10.2007 purported to be served on the assessee on 23.10.2007. From the alleged notice, we find that this notice was not sent through the process of registered post or postal authorities but the revenue has claimed that it was served personally on the assessee. This notice does not bear any name of the person or identification of the person to whom it was served. Only one signature appears on it with date 23.10.2007and time 1.20 P.M. therefore, from the copy of the alleged notice, it can not be ascertained as to whom the notice was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once the notice u/s 143(2) remained unserved on the assessee within the stipulated period then it is not a mere procedural irregularity but there is a lack of jurisdiction which enable the Assessing Officer to complete the assessment. The Hon'ble Supreme Court in the case of ACIT ANR Vs. Hotel Blue Moon (supra) while dealing with issue of notice u/s 143(2) has observed in para 15 as under:- 15. We may now revert back to Section 158 BC(b) which is the material provision which requires our consideration. Section 158 BC(b) provides for enquiry and assessment. The said provision reads that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, subsection (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply. An analysis of this sub section indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under Sections 143(2)/142 and complete the assessment under Section 143(3). This Section does not provide for accepting the return as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression So far as may be in Section 153 BC(b), the issue of notice is not mandatory but optional and are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation made by this Court in Dr. Pratap Singh's case [1985] 155 ITR 166(SC). In this case, the Court has observed that Section 37(2) provides that the provisions of the Code relating to searches, shall so far as may be, apply to searches directed under Section 37(2). Reading the two sections together it merely mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), while dealing with the issue of notice u/s 143(2) and consequential effect on the assessment has observed in para 4 and 6 as under :- 4. The second contention regarding there being acquiescence and/or waiver on the part of the assessee by participating in the proceedings also does not merit acceptance. It is an admitted position that the return of income was filed on March 30, 1997, for the assessment year 1997-98 and the notice under section 143(2) of the Act came to be issued for the first time only on August 20, 1998. Therefore, the notice was admittedly beyond the period of 12 months which is the statutory period of limitation prescribed under the proviso to subsection (2) of section 143 of the Act. 6. Section 143(2) of the Act requires that where a return has been made by an assessee, 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 underpaid tax in any manner, he shall serve on the assessee a notice requiring him either to attend his office, or to produce, or cause to be produced there, any evidence on which the assessee may rely in support o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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