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2015 (10) TMI 2168 - ITAT DELHI

2015 (10) TMI 2168 - ITAT DELHI - [2016] 46 ITR (Trib) 387 - Revision u/s 263 - assessee submitted that CIT(A) has failed to appreciate the fact that no notice u/s 143(2) was served before the assessment proceeding was initiated within the statutory period which is a statutory requirement and as such the entire assessment was without authority of law and as such no order as passed should have been passed rather it should have cancelled instead of setting it aside - Held that:- Admittedly the not .....

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stage of proceeding or not. In this regard we find that the decision of Hon’ble Delhi High Court in the case of Escorts Farms Pvt. Ltd. (1989 (7) TMI 64 - DELHI High Court), which we have extensively reproduced earlier, clearly supports the assessee’s plea.

However, u/s 263 the ld. Commissioner cannot revise a non est order in the eye of law. Since the assessment order was passed in pursuance to the notice u/s 143(2), which was beyond time, therefore, the assessment order passed in pu .....

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Commissioner of Income-tax, Hisar u/s 263 of the Income-tax Act, 1961, relating to asstt. Year 2007-08. 2. Brief facts of the case are that the ld. Commissioner called for the assessment record and on examination of the assessment order passed by the AO u/s 143(3), observed that the said order was erroneous, in so far as it was prejudicial to the interest of revenue for the following reasons: On perusal, it is noticed that the assessee has started new business and opening capital of ₹ 225 .....

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,62,575/- from this transaction. In view of Punjab & Haryana High Court's decision in the case of Harbans Singh Vs. CIT Amritsar-I (132 ITR 77 & 23 CTR 335) and Supreme Court's decision in the case of Raja J. Rarneshwar Rao Vs. CIT Hydrabad cited in 42 ITR 179), the income earned from the transaction of purchasing plot of lands, constructing shops thereon and selling those shops should have been treated as business income instead of Long Term Capital Gain, but the A.O. failed to .....

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nterest of revenue. iv. The assessee has credited Capital A/c with NSC interest received on maturity amounting to ₹ 21880/-. The interest relevant to year under consideration should have been included in total income but the AO failed to do so. 3. He, therefore, issued notice u/s 263(1) and after considering the assessee s submissions, set aside the assessment order and directed the AO to reframe the assessment as per the directions given in his order. 4. Being aggrieved with the order of .....

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ncome in view of judgment of P&H High Court passed on different facts by ignoring later judgments of the same high court and of other courts. (ii) To verify the short term capital loss of ₹ 35002/- duly proved on sale of shops. (iii) To verify the receipt of interest of ₹ 6188 and credited directly to capital account received on maturity of NSC ignoring that it was already shown as income on accrual basis by considering it as income from MIC Intt. against facts. (iv) To verify th .....

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eous & prejudicial to the interest of revenue merely because the order of the AO was not in the lines as considered by the Ld CIT. 2. The Ld. CIT has initiated the proceeding without fulfilling the requirement of sect. 263 which is essential before proceeding u/s 263(1) and therefore also the order is bad in law. 3. Ld. CIT has failed to appreciate the fact that no notice u/s 143(2) was served before the assessment proceeding was initiated within the statutory period which is a statutory req .....

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ould not be revised u/s 263 of the Act. He submitted that original return for AY 2007-08 was filed on 31-7-2007 and the notice u/s 143(2), which should have been issued before 31-7-2008 was admittedly issued on 5-9-2008 fixing the case for hearing on 17-9-2008. 6. Ld. counsel submitted that the law as applicable on the date of filing of return will be applicable and accordingly the notice u/s 143(2) should have been issued within 12 months from the end of the month in which the return was furnis .....

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ted u/s 143(2) of the Act could be taken before the ITAT as it was a legal plea. 8. Ld. counsel further referred to the decision of Hon ble Delhi High Court in the case of CIT Central-I, Vs. Escorts Farms Pvt. Ltd. 180 ITR 280, wherein the facts were as under: Briefly stated, the facts are that in respect of the assessment year 1973-74, the Income tax Officer made an assessment. An appeal was taken to the Commissioner of Income tax, who allowed the same. Further appeal was filed by the Departmen .....

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The Tribunal came to the conclusion that such a contention had been raised by the assessee and it decided that contention in favour of the assessee. The decision of the Tribunal, therefore, was that the assessment was barred by time, but, at the same time, on merits, the Tribunal had decided in favour of the Department. Against the aforesaid order passed under section 254(2) of the Act, the Department filed a reference application under section 256(1), but the said application was dismissed. The .....

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effect and would become infructuous. Against the said decision, the Department filed an application under section 256(1)which was dismissed and now an application under section 256(2) has been filed seeking reference of the question of law which has been reproduced above. 9. On these facts Hon ble Delhi High Court held as under: In our opinion, the decision of the Tribunal is correct when it stated that the effect of holding that the assessment was barred by time is that all further proceedings .....

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fect can be given to the other decision on merits. If, however, the reference of the Department against the order passed in M. A. No.4 of 1985 succeeds, then the decision on merits of the various appellate authorities would automatically remain. 10. With reference to above decisions, ld. counsel submitted that the objection regarding assessment order being bad in law can be taken at any stage of proceedings and since the assessment order was bad in law, therefore, any decision on merit is of no .....

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s 263 because section 263 is for the benefit of revenue in regard to orders which are prejudicial to interest of revenue and, therefore, assessee cannot take the plea of assessment order being bad in law at this stage. 13. Ld. DR referred to the decision of Hon ble Punjab & Haryana High Court in the case of Harbans Singh vs. CIT 132 ITR 77, in which, the decision of Hon ble Supreme Court in the case of Raja J. Rameshwar Rao v. CIT 42 ITR 179 was followed. The proposition laid down in these t .....

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ven any explanation as to why he did not file appeal against order u/s 263 nor any exceptional circumstances were shown to exist. She submitted that assessee had not filed any appeal against the assessment order and, therefore, at this juncture this plea cannot be taken. 15. She further referred to the decision of the ITAT in the case of Krishna Shriram Vs. CIT (ITA no. 1649/Del/2011 - order dated 29-1-2014), wherein 263 order had been upheld, following the decision of Hon ble Jurisdictional Hig .....

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. However, since the assessee was not aggrieved with the assessment order, therefore, he did not challenge. However, nothing turns on this when we consider the issue in the backdrop of proceedings initiated u/s 263 by ld. Commissioner. The moot point for consideration is as to whether this objection can be entertained at this stage of proceeding or not. In this regard we find that the decision of Hon ble Delhi High Court in the case of Escorts Farms Pvt. Ltd. (supra), which we have extensively r .....

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