TMI Blog2015 (5) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of information received from CIT, Delhi-XIII, New Delhi vide letter F.No. CIT-XIII/Fraud. Refund/2622 dated 14-3-2005 and from the Addl. CIT, Range-37, New Delhi vide letter F. No. Addl. CIT/Range-37/2004-05/925 dated 18.2.2005, enclosing therewith copy of letter No. ITO, Ward 37(1)/2004-05 dated 9.2.2005 of Shri Krishan, Income-tax Officer, Ward 37(1), New Delhi stating that M/s Staunch Marketing Pvt. Ltd. had paid incentives to Shri Surender Singh and Shri Ravinder Singh who were assessed with Ward 37(1), New Delhi. In the income-tax return filed in the name of Shri Surender Singh and Shri Ravinder Singh, refund was claimed against TDS certificates issued by this company. On enquiry by the ITO Ward 37(1), New Delhi, it was found that Shri Surender Singh and Shri Ravinder Singh had not filed returns in their names but Shri Hoshiar Singh, who was a director of M/s Staunch Marketing Pvt. Ltd. had actually filed the income-tax returns in the names of Shri Surender Singh and Shri Ravinder Singh. TDS certificates issued by M/s Staunch Marketing Pvt. Ltd., showing month wise payment of incentives and tax deducted on it was attached. The incentives allegedly paid to Shri Surende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gross Total Income Rs. NIL Tax due Rs. NIL Tax paid u/s 14A Rs. NIL Unabsorbed Depreciation Carried Forward u/s 32 85,986.43 4. The AO has further pointed out that after this return was filed no compliance was made to the notice issued u/s 142(1) and summons u/s 131. Therefore, the AO in para 4.3 observed that he was left with no other alternative but to complete the assessment ex parte. The assessment was accordingly completed at a total income of ₹ 4,86,08,295/-. Ld. CIT(A) partly allowed the assessee s appeal. 5. Being aggrieved with the order of ld. CIT(A), the department is in appeal before us and assessee has filed cross objection. 6. The revenue in its appeal has raised following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 57,21,746/- ( included in the total amount of ₹ 2,67,25,498/- ) claimed to have been paid by the assessee as incentives to 19 parties but could not substantiate the same by producing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Served upon him in an imporoper manner. 10.1. He further pointed out that as per proviso to section 292BB, the operation of this section does not come into play if the assessee has raised such objection before the completion of such assessment or the reassessment. He pointed out that no such objection was raised before AO till completion of assessment. 10.2. Ld. CIT(DR) further submitted that admittedly assessee did not raise any such issue before ld. CIT(A) also either in statement of facts or in grounds of appeal and, therefore, the ground raised by assessee in the cross objection does not arise out of CIT(A) s order. He further submitted that cross objection has been filed belatedly and suffers from latches. 10.3. Ld. CIT(DR) referred to the provisions of section 253(4) of the Act and submitted that assessee failed to file a memorandum of cross-objection/ additional ground against any part of the CIT(A) s order within the time specified in sub-section (3) and, therefore, cannot be acted upon. He further submitted that whether a notice u/s 143(2) of the Act is issued or not is only a question of fact and not a question of law and, therefore, it could not be raised on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum of cross-objections against any part of the order of the Dy. CIT(A). In other words, cross-objections need not be confined to the points taken by the opposite party in the main appeal The words against any part of the order of the Dy. CIT are wide enough to cover a situation where the Revenue has challenged the order of the Dy. CIT(A) on the merits regarding the quantum of the tax liability, but the assessee in cross-objections can challenge the order of the Dy. CIT not only on the quantum of tax amount but on other points also. In view of the aforementioned discussion it can safely be held on a point of law that there is absolutely no difference between an appeal and a cross objection . 7.3. Further, in the absence of a notice u/s 143(2) of the Act, the assessment prevails or not is to be examined: Whether it is a legal question or not? In an identical issue to that of the issue under consideration, the earlier Bench of this Tribunal in the case of B.R.Arora v. ACIT in ITA NO.6020/De1/2012 dated 29.5.2014 has decided the issue in favour of the assessee. The issue, in brief, wasthat the assessee had filed an application before the Tribunal for admitting add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assing the assessment order under section 143(3) of the Act, issuance of notice under section 143(2) of the Act within the specified time, is mandatory and in case if it is not issued, assessment order passed stand illegal. Thus, in my opinion, ground which has been raised and sought to be added in the grounds of appeal is a legal ground which goes to the root of the matter, and thus, the Tribunal ought to have allowed the application and the ground sought to be added be permitted to be added in the grounds of appeal. In the case of National Thermal Power Company Ltd v. Commissioner of Income-tax (supra), the Apex Court held as follows: 'The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., CIT v. Anand Prasad (1981) 128 ITR 388 (Del), CIT v. Karamchand Premchand P. Ltd (1969) 74 ITR 254 (Guj), and CIT v. Cellulose Products of India Ltd (1985) 151 ITR 499 (Guj) (FB). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But wheretlie Tribunal is only required to conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions and have perused the record of the case. As far as ld. CIT(DR) s objection that this issue could not be raised by way of CO, we find that Tribunal in the case of M/s Silver Line (supra) has exhaustively considered this issue with reference to the decision of Hon ble Guwahati High Court in the case of Purbanchal Parbahan Gosthi (supra). 12.1. It has been clearly held that even if the issue has not been considered by CIT(A) still by filing cross-objection, the assessee can raise this issue. The plea of ld. CIT(DR) that it is purely a question of fact as to whether 143(2) notice was issued or not, is misplaced inasmuch as the non-issuance of notice u/s 143(2) results in raising a question of law as to whether the same results into invalidating the assessment order per se or not. Therefore, this issue is a mixed question of law and fact and goes to the very root of jurisdiction of passing of the assessment order. 12.2. Ld. CIT(DR) has also referred to section 124(3), which, in our opinion, is relevant only when the jurisdiction of an AO is challenged on the basis of area and not otherwise as is evident from sub-section (1) of section 124. The objection raised with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssential for reassessment and it is a failure on the part of the AO for not complying with the procedure laid down in section 143(2) of the Act. If the notice is not issued to the assessee before completion of the assessment, then the reassessment is not sustainable in the eyes of law and deserves to be cancelled. In view of above facts and circumstances of the present case, the issue in dispute raised in additional ground relating to non issue of the mandatory notice u/s. 143(2) of the Act is decided in favour of the assessee and we hold that the impugned assessment order dated 31.12.2009 passed u/s. 147/143(3) of the Act by the AO as invalid. Our view is supported by the various judgments of the Hon'ble Supreme Court, and Hon'ble Jurisdictional High Court. The relevant portion of the headnotes of various judgments of the Hon'ble Courts are reproduced as under:- ACIT Anr. VS. Hotel Blue Moon: [(2010) 321 ITR 362 (SC)] HELD: It is mandatory for the AO to issue notice u/s 143 (2). The issuance and service of notice u/s 143 (2) is mandatory and not procedural. If the notice is not served within the prescribed period, the assessment order is invalid Reassessment- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tre reported in 152 ITJ (Agra) 767, on an identical issue that of the present issue, has recorded its findings as under: 5. We have considered the rival submissions and the material on record. It is not in dispute that the assessee filed original return of income and at .the reassessment proceedings, the assessee contended before the AO that the original return filed earlier may be treated to nove been filed in response to the notice u/s. 10 ITA NO. 1175/DeI/2011 CO 174/DEL/2011 147, which is also supported by order sheet entry dated 09.08.2006 (PB-20). It is also not in dispute that AO never issued any notice u/s. 143(2) of the IT Act. The Revenue merely contended that the CIT (A) should have appreciated the provisions of section 292BB of the IT Act. Section 292 BB of the IT Act provides as under: 292BB. Where an assessee has appeared in any proceeding 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 sha ..... 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