Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2015 (8) TMI 620

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... uently, the Tribunal was justified in setting aside the order of the Assessing Officer as well as the order of the Appellate Authority. - Decided in favour of assessee. - Income Tax Appeal No.142 of 2015, Income Tax Appeal No.143 of 2015, Income Tax Appeal No.146 of 2015, Income Tax Appeal No.147 of 2015, Income Tax Appeal No.148 of 2015, Income Tax Appeal No.149 of 2015 - - - Dated:- 4-8-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani,JJ. ORDER (Per: Tarun Agarwala, J.) 1. This group of appeals under Section 260A of the Income Tax Act (hereinafter referred to as the Act) relates to the reassessment proceedings for the assessment year 2006-07, 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12. The dispute in all these assessment years is common and are, accordingly, being decided together. For facility , the facts of assessment year 2007-08 is being taken into consideration. 2. Proceedings under Sections 147, 148 of the Act was initiated after obtaining approval from the Joint Commissioner of Income Tax under Section 151 (2) of the Act, pursuant to which notice under Section 148 of the Act was issued. Upon receipt of the notice under Sectio .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the Act was ever issued. 6. Sri Ashok Kumar, the learned counsel for the Department contended that adequate opportunity was not given to the Department to produce the original assessment records and, had a proper opportunity being given, the Department would not only have produced the record but would have satisfied the Tribunal that a notice under Section 143(2) of the Act was issued to the assessee. It was also contended that the requirement of issuance of notice under Section 143(2) of the Act was not a mandatory requirement as no format has been provided under the Act or the Rules for the issuance of the notice. Further, the assessee participated in the reassessment proceedings and, therefore, could not assert at the stage of the Tribunal that notice was not served under Section 143(2) of the Act. It was contended that in view of Section 292BB of the Act, the assessee, after having participated in the proceeding under Section 143(2) of the Act, could not contend that the entire reassessment proceedings were a nullity on the ground that the notice was not served. 7. In this background, we have heard Sri Ashok Kumar, the learned counsel for the appellant and Sri Balbir Sin .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return: Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 11. Under clause (ii) of sub-section (2) of Section 143, the Assessing Officer is required to serve, on the assessee, a notice requiring him to attend the office or to produce evidence on which the assessee may rely in support of the return, 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 under-paid the tax in any manner. Under the proviso to clause(ii), it has been specified that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. Service on the assessee of a notice within the period prescribed by the proviso presupposes the issuance of a notice for, it is only when .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... with. 15. Similar view was held by a Division Bench of this Court in Commissioner of Income Tax II Lucknow Vs. Salarpur Cold Storage (P) Ltd. , (2014) 50 Taxman.Com.105, Commissioner of Income-tax, Faizabad Vs. Adarsh Travel Bus Service, (2012) 17 taxmann. Co 140(All.) as well as in Commissioner of Income-tax Vs. Mukesh Kumar Agrawal, 345 ITR 29 and Commissioner of Income -tax Vs. Rajeev Sharma, (2010) 192 Taxman 197 (All.). 15. In the light of the aforesaid decisions, it is apparently clear that the jurisdiction of the Assessing Officer to make an assessment under Section 143(3) (ii) of the Act is based on the issuance of a notice under Section 143(2)(ii) of the Act. The proviso to clause (ii) of sub Section (2) of Section 143 clearly stipulates that a notice must be served on the assessee. 16. In the light of the aforesaid, we have to see as to whether the word notice specified in paragraph 16 of the Supplementary Affidavit is in fact a notice issued under Section 143 (2) of the Act. The learned counsel was directed to show the said notice from the original assessment records. The relevant notice was shown to the Court. The notice which has been mentioned in paragraph .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... notice was (i) not served upon him; or (ii) not served upon him in time; or (iii) served upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to Section 292 BB of the Act, however, carves out an exception to the effect that the Section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292 BB of the Act cannot obviate the requirement of complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under Section 143 (3) of the Act, it is necessary to issue a notice under Section 143 (2) of the Act and in the absence of a notice under Section 143(2) of the Act, the assumption of jurisdiction itself would be invalid. 19. In view of the aforesaid, we are of the opinion that Section 292BB, which was inserted with effect from 01.04.3008 is not applicable to the proceedings for the assessment year 2006-07, 2007-08, 2008-09. We are also of the opinion that Section 292BB of the Act is not ap .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... f notice within limitation was the foundation of jurisdiction. The same view has been taken by this Court in Janni v. Indu Prasad Bhat, 72 ITR 595 as also in C.I.T. v. Robert, 48 ITR 177. The High Court in our opinion went wrong in relying upon the ratio of 53 ITR 100 in disposing of the case in hand. The scheme of the 1961 Act so far as notice for reassessment is concerned is quite different. What used to be contained in section 34 of the 1922 Act has been spread out into three sections, being sections 147, 148 and 149 in the 45 1961 Act. A clear distinction has been made out between 'issue of notice' and 'service of notice' under the 1961 Act. Section 149 prescribe the period of limitation. It categorically prescribes that no notice under section 149 shall be issued after the prescribed limitation has lapsed. Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of is .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates