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M/s Total Presentation Device (P) Ltd. Versus Deputy Commissioner of Income Tax, Circle-16 (1) New Delhi

2015 (6) TMI 131 - ITAT DELHI

Non-service of notice u/s. 143(2) - Held that:- No assessment u/s 143(3) can be said to have validly made where notice u/s 143(2) is not served or where such notice is served beyond the prescribed period or improperly served. The consequences flowing from such non / belated / improper services of notice are that the assessment so made become void ab initio.

In the present case AO has not issued any notice u/s 143(2) of the I.T. Act to the assessee. During the entire assessment proceed .....

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ed the present appeal against the impugned order dated 06/2/2013 passed by the Ld. Commissioner of Income Tax (Appeals)-19, New Delhi on the following grounds:- 1. The Ld. CIT(A) erred in facts & Circumstances of the case & in law in holding that the assessment has been framed by valid service of notice u/ s 143(2) of Income Tax Act 1961 & do not deserve to be quashed. 2. That The Ld. CIT(A) erred in law, by not providing any opportunity to rebut the remand report of the AO regarding .....

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itions as it is without giving any opportunity of being heard:- i. That the Ld. CIT(A) erred in facts & in law by disallowing the bad debts. ii. That the Ld. CIT(A) erred in facts & in law by rejecting the claim of loss of goods in transit & Business damage. iii. That the CIT(A) erred in facts and in law by rejecting claim discount of the part expenses. iv. That the Ld. CIT (A) erred in facts and in law by upholding the addition made u/s 68 of Income Tax Act by way of rejecting the c .....

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course of appellate proceedings 2. The facts narrated by revenue authorities are that the return of income in this case was filed on 29.3.2009 declaring income of ₹ 1,18,79,657/-. The case was taken up under scrutiny. Statutory notice u/s. 143(2) of the I.T. Act, 1961, was issued to the assessee company on 18.9.2009 and served upon the assessee company. A questionnaire dated 7.4.2010 was sent to the assessee company alongwith notice u/s. 142(1) and another notice u/s. 143(2) and 142(1) al .....

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ome at ₹ 5,10,43,340/- and completing the assessment on 31.12.2010 u/s. 143(3) of the I.T. Act. 3. Aggrieved with the aforesaid order dated 31.12.2010, assessee filed the Appeal before the Ld. CIT(A), who impugned order dated 06.2.2013 dismissed the Appeal of the Assessee. 4. Against the aforesaid order dated 6.2.2013 passed by the Ld. CIT(A), assessee is in appeal before the Tribunal. 5. At the time of hearing Ld. Counsel of the assessee argued only on the issue involved in ground no. 1 r .....

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was formed vide certification of incorporation of ROC dated 02/09/1996 having two share holders & subscriber to MOA& AOA namely Sh. Sanjay Bansal (having sahre holding of 69.9%) & Nandita Sinha (having holding of 30.1 %). After three years of their marriage a dispute erupted between them & in the end both parties filed various court cases against each other . In between Nandita Sinha was removed from Directorship of the company by majority shareholder Sh. Sanjay Bansal vide noti .....

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was passed by AOJ (Central)-04 Dr. Archana Sinha & marriage was mutually dissolved. As per the settlement, the control of the company was handed back to Nandita by way of transfer of shares & Mr. Sanjay Bansal Resigned from Directorship of the company on 03/06/2010 itself along with his entire team. Copy of Form 32 intimation of resignation to ROC is attached. But in fact a due diligence of actual handing over of all documents was not done at that time. During the assessment proceedings, .....

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ings of 2007-2008 pertains to his period of control of the company therefore entire demand to be paid by him & to enforce this we take legal recourse again otherwise he had to cooperate, give & assist the new management to deal with the case of huge demand & thereafter the company again ask for the documents vide letter dated 08/02/2011& 17/02/2011. As a result we received all documents on 15/04/2011. From the documents / record file received on 15/04/2011, we came to know about .....

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of appeal of non receipt of notice uls 143(2) at the time of filing of the appeal. On 25/04/2012 assessee company filed an application for additional evidence u/r 46A of income Tax Act & at the time of hearing the application of additional evidence AR of the company raised the additional ground of non receipt of statutory notice U/S 143(2)(ii) of Income Tax Act 1961 & same was again mentioned in letter dated 07/12/2012. On the basis of this additional ground read with an application u/r .....

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ing the evidence furnished, AO commented in the said remand report dated 27/12/2012 that additional evidence may be accepted. Despite of recommendation of the AO in remand report to accept the additional evidence, CIT (A) has chosen to reject the application of additional evidence ulr 46A without assigning any reason & without providing an opportunity of being heard which is bad in law. The copy of remand report was not provided to assessee & same was obtained by assessee through the rec .....

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2009 send through speed post dispatch receipt dated 22/09/2009 affixed pasted on the said notice as proof of dispatch. CIT(A) on 30/01/2013, handed over the copy of remand report dated 28/11/2013 along attachment as copy of notice dated 18/09/2009 with proof of dispatch pasted on the said notice. The CIT(A) with this concluded the hearing without giving any opportunity to rebut the finding of the AO. As a result of, no opportunity provided to rebut the finding of AO, on 30/01/12013 itself, after .....

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80 at PAN data base. A copy of receipt of NSDL along with professional charges bill of Anuj Goyal associate CA. In response of the said application an objection letter dated 24/01/2008 was received at new address, from Income Tax PAN service unit pointing out the defect of wrong mentioning of PAN as AAACT6992K in place of correct PAN AAACT5992K. (Digit 6 was typed in place of 5). As required by PAN Unit service, the said mistake was rectified by assessee & the correct PAN with all required c .....

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U/S 143(2) of income tax Act on the old address. Same was accordingly not served on the assessee. Affidavit to this effect can be filed if required by the Hon'ble Bench. More over Your kind attention is invited towards the amendment regarding the change-in-principal place of business in Sales tax department w.e.f 30/06/2007 accordingly assessee filed its TDS return with income tax department for the second quarter of FY 2007-2008 vide receipt no. 010690200168535 & form 27A. CIT(A) has er .....

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hanged even before the closing of FY relevant to AY 2008-2009. Assessee was filing its TDS return with the department from Second Qr. of 2007-2008 & onward from new address. Therefore the new address was very much available with AO but AO chosen to send the notice at the old address for the reason best known to him. In fact assessee inspected the record file of assessment vide receipt no. 9708 dated 17/04/2013 (page 76(i) & 77(i)) & obtain the copies of following:- On 05/03.2010 the .....

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notice uls 142(1) fixing the case for 14/05/2010 at Correct address i.e 118 Neb Sarai. This is send through speed post vide serial no. 148 vide receipt no. 5. Copy attached at page 88. This notice was served & in response' of this notice, assessee filed the reply dated 10/05/2010 & dated 13/05/2010 objecting the validity of the notice. First Notice uls 143(2) of Income Tax Act on new address dated 27/07/2010 was served on assessee fixing the case for 20/08/2010. c) that the allegatio .....

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1 on page 7 itself. Therefore order of CIT CA) is contradicting itself. Legal Position As per proviso to section 143(2)(ii) of Income Tax Act 1961 inserted by Finance Act 2008 w.e.f 01/4/2008 no notice U/S clause (ii) shall be served on the assessee after the expiry of six months from the end of FY in which the return is furnished. In this case ROI was filed on 29/03/2009. Therefore notice uls 143(2)(ii) shall be served on or before 30/09/2009 to complete the valid assessment. No notice was serv .....

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Delhi). In this case jurisdictional High Court held that notice U/S 143(2) must be served on the assessee with in the time stipulated in the proviso. In case the notice was not served within the said time limit the assessment order passed would be null and void. 2. CIT Vs. Mascomptel India Ltd. In ITA 11/2012 dated 04/0112012 of Delhi High Court. The fact of the case are similar to our facts. In this case also Court relied on CIT V. Lunar Diamonds Ltd. (2006) 281 ITR 1 (Delhi). 3. CIT Vs. Vardhm .....

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3(3) can be said to have validly made where notice u/s 143(2) is not served or where such notice is served beyond the prescribed period or improperly served. The consequences flowing from such non / belated / improper services of notice are that the assessment so made become void ab initio. Effect of Section 292BB of Income Tax Act PI. refer page no. 2 para 2 of assessment order of AO in which AO said "Before going in to assessment part of the order, I consider it is important to give the b .....

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s of the authorities below. 7. We have heard both the counsel and perused the records available with us, especially the orders of the revenue authorities, written submissions filed by the assessee as well as the case laws relevant to the issue in dispute. As per the assessment order the assessee filed its return of income dated 29.3.2009 for the assessment year in dispute at the total income of ₹ 1,18,79,657/-. According to the assessment order the notice u/s. 143(2) of the I.T. Act was is .....

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tention towards Page No. 67 of Paper Book where the notice u/s. 143(2) of the Act dated 18.9.2009 for 30.9.2009 has been issued by the AO to the assessee on the address i.e. D-5, Green Park Extension, New Delhi. As discussed above, the assessee filed its return of income for the asstt. year in dispute dated 29.3.2009 by mentioning its address as 118-E, Neb Sarai, New Delhi. In our view AO should have issued notice u/s. 143(2) of the I.T. Act to the assessee on the address mentioned in its return .....

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ached in its Paper Book at page 78 meaning thereby the AO is in possession of correct address of the assessee and has not issued notice u/s. 143(2) of the Act to the assessee on the correct address. 7.1.2 We find that the assessee has also filed its objections dated 10.5.2010 before the AO which is at page no. 55 of the Paper Book for non-service of statutory notice u/s. 143(2) of the Act. Assessee has also given intimation dated 13.5.2010 to the Ld. Commissioner of Income Tax-VI regarding non-s .....

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ess i.e. D-5, Green Park Extension, New Delhi. But we have also found that the AO has written by hand the correct address of the assessee i.e. 118-E, Neb Sarai, IGNOU Road, New Delhi - 110 068 meaning thereby the AO is having the knowledge of the correct address of the assessee, but did not issue notice u/s. 143(2) of the I.T. Act to the assessee on the correct address of the assessee. Therefore, we are of the view that notice u/s. 143(2) of the I.T. Act has not been served upon the assessee and .....

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.3.2009 . Therefore, notice u/s. 143(2)(ii) would be served on or before 39.9.2010 to complete the valid assessment, but no such notice was served on the assessee on or before 30.9.2009. Therefore, the assessment in dispute is null and void. In view of above, the AO has completed the assessment in dispute contrary to the provisions of law and, hence, the assessment in dispute is not sustainable in laws, This view is supported by the Hon ble Supreme Court of India judgment; various High Courts ju .....

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