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2015 (7) TMI 283 - ITAT MUMBAI

2015 (7) TMI 283 - ITAT MUMBAI - TMI - Reopening of assessment - absence of notice u/s 143(2) issued while making the impugned assessment under section 143(3) r.w.s 147 - Held that:- The entire material on record does not establish that any notice u/s 143(2) of the Act was issued while completing the impugned assessment. In fact, leave alone any proof of issuance of notice u/s 143(2), Revenue has not even asserted that the requisite notice u/s 143(2) was issued while making the impugned assessme .....

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97/Mum/2014 - Dated:- 30-6-2015 - Shri G.S. Pannu and Shri Sanjay Garg, JJ. For the Petitioner : Shri S.K.Singh For the Respondent : Shri Vijay Mehta ORDER Per G.S. Pannu, AM The captioned appeal by the Revenue and Cross Objection by the assessee are directed against the order of Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A) ] dated 30.11.2010, which inturn has arisen from an order passed by Assessing Officer u/s 143(3) r.w.s 147 of the Income Tax Act, 1961( herein .....

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e as additional income for the instant assessment year in the course of a statement recorded at the time of a survey action u/s 133A of the Act on 18.11.2004. In view of the aforesaid reason, the Assessing Officer re-opened the assessment by issuance of notice u/s 148 of the Act on 16.05.2008. In the ensuing assessment proceedings, assessee contended that on 3.02.2005, he had communicated to the Department vide his affidavit dated 2.02.2005, whereby the statement made during the survey was retra .....

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n from the books and records available for verification. The department cannot make assumption of income without any reliable evidence/findings on record. (ii) Our letter dated February 3, 2005 dully acknowledged by ITO 24(1)(2) with Mr. Santosh Sawant s affidavit dated 2nd February, 2005 which is self explanatory that statement made during the survey was retracted based on valid and legal grounds. Please find enclosed copy of the letter dated February 3, 2005 along with affidavit copy. (iii) In .....

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eld retraction was a belated afterthought, devoid of any supporting documentary evidence. Accordingly, he made an addition of ₹ 21,90,750/- to the returned income, on account of additional income offered during the course of survey. 4. Before the CIT(A), the assessee contended that there was no material in possession of the Department, except the impugned statement dated 18.11.2004, to support the addition of ₹ 21,90,750/- made to the returned income, which was retracted in February .....

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tances of the case and in law, the learned CIT(Appeals) has erred in dismissing the additional grounds, raised by the assessee during the appellate proceedings challenging the action of the AO to invoke provisions of section 147 by issuing notice u/s 148, by treating the same as not pressed. 2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) ought to have held that the order passed by the AO under section 143(3) r.w.s 147 of the I.T. Act, 1961 Act is bad in .....

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oceeded with. For this proposition, he has relied upon the following decisions:- i) ACIT Vs. Hotel Blue Moon 321 ITR 362 (SC) ii) Nikesh A. Gada (HUF Vs. ITO in ITA no. 2714/Mum/2014 (Mum) iii) Ramesh B. Chandak Vs. ITO in ITA No. 1643/PN/2011 (Pune) iv) Shri Ishwar Sadan Cooperative Housing Society Ltd. Vs. DCIT in ITA No. 2441/Mum/2011 (Mum) v) Shri Shashi Kala M. Pawar Vs. ITO in ITA No. 4821/Mum/2011 (Mum); 6. Notably, before the CIT(A) also, assessee had raised an additional Ground of appea .....

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the assessment without serving notice u/s 143(2) of the Act. By way of discussion in para 2 of the impugned order, the CIT(A) has dismissed the Ground on the plea that it was not pressed before him. The aforesaid Ground dismissed by the CIT(A) had no impact on the ultimate decision, whereby the addition made during assessment was deleted, which resulted in restoration of the income as per the return of income. 7. Now, the Cross Objection filed by the assessee is belated by 110 days and Ld. Repre .....

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the Revenue, and therefore, the delay in filing of the Cross Objection was condoned. Insofar as, admission of such a plea before us is concerned, we find that the same deserves to be admitted. Quite clearly, the issue involved is a point of law, and the relevant facts are on record and following the parity of reasoning laid down by the Hon ble Supreme Court in the case of National Thermal Power Corporation Vs. CIT 229 ITR 383 (SC), the same deserves to be admitted. We are conscious of the fact t .....

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case of CIT vs. Pruthvi Brokers & Shareholders [2012] 349 ITR 336 (Bom). 8. On the basis of the decisions relied upon by the assessee, it clearly emerges that omission to issue notice u/s 143(2) renders an assessment order passed u/s 143(3) r.w.s 147 of the Act bad-in-law and non est. The issuance of notice u/s 143(2) is mandatory and a condition precedent before embarking upon the assessment. Mere issuance of notice u/s 147 does not empower the Assessing Officer to frame the assessment orde .....

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ment of the Hon ble High Court is relevant:- 4. So far as Tax Appeals No.77/2012 and 78/2012 are concerned, in both these appeals, the ITAT has held that the issuance of notice after reopening of the case was mandatory and this order is under challenge. It is contended that the said order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01.04.2008, in which it is stated that in a case where an assessee has appeared in any proceedings or co-opera .....

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read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income-Tax, report in 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that que .....

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bsence of such service, the Assessing Officer cannot proceed to make an inquiry on the return filed in compliance with the notice issued under section 148. 6. Under these circumstances, no case is made out for interfering with the Tax Appeals No. 77/2012 and 78/2012 since no substantial question of law is raised in both the appeals. 9. In the background of the above legal position, the Revenue was allowed opportunity to prove that any notice u/s 143(2) of the Act was issued while making the impu .....

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ncerned Assessing Officer dated 8/6/2015 was furnished:- Sub:- Mr. Santosh Sawant. ITA Nos. 830/M/11 (A.Y. 2005-06) & CO 97/M/14 PAN-AADPS5520L Ref: Letter No. Jt. CIT (Sr. AR)/ITAT/ H Bench/2015-16, dated 02.06.2015. Kindly refer to the above. 2. I once again state that after restructuring, I have taken over this charge w.e.f. 17- 12-2014. The ITO-30(2)(3), Mumbai who was having jurisdiction of the abovementioned assessee has handed over only time-barring cases. On receipt of letters from y .....

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