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2015 (11) TMI 646 - PUNJAB & HARYANA HIGH COURT

2015 (11) TMI 646 - PUNJAB & HARYANA HIGH COURT - TMI - Validity of assessment in the status of HUF - Held that:- The fact that the assessee himself had filed the return in the status of HUF coupled with the provisions of Section 292BB of the Act, the Tribunal was not right in declaring the assessment order as non-est.

In view of the above, the substantial questions of law are answered in favour of the revenue and against the assessee. - ITA No. 84 of 2009 (O&M) - Dated:- 1-9-2015 - A .....

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n ITA No. 3246/D/2004, for the assessment year 2000-01, claiming the following substantial questions of law:- A. Whether, on the facts and in the circumstances of the case, the Ld. ITAT is right in law in holding that the assessment framed by the Assessing Officer u/s 143(3) in the case of the assessee Mangal Singh, HUF is invalid and having annulled the same, deciding the grounds of appeal taken by the revenue on merits, is merely academic and therefore the Hon'ble ITAT refused to consider .....

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facts necessary for disposal of the present appeal as mentioned therein are that the assessee filed his original return on 24.1.2001 for the assessment year 2000-01 in the status of 'individual' declaring the income at ₹ 7,64,920/-. Subsequently, he filed the revised return on 26.3.2002 in the status of 'HUF' with no variations in the income. The said case was selected for scrutiny and notice under Section 143(2) of the Act was issued on 4.9.2002 along with questionnaire. .....

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s the assessee filed cross objections. The Tribunal vide order dated 31.7.2008 (Annexure A-III) dismissed the appeal of the revenue and allowed the cross-objections filed by the assessee. It was held by the Tribunal that the assessment in the status of HUF was invalid and that the ground of appeal taken by the revenue on merits was merely academic. Hence, the present appeal by the revenue. 3. We have heard learned counsel for the parties. 4. The Tribunal had adjudicated the cross-objection filed .....

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F. Further reliance was placed upon the judgment of this Court in The Commissioner of Income Tax, Bathinda v. M/s Panchvati Motors (P) Ltd. ITA No. 292 of 2008 decided on 3.5.2011. 5. Controverting the aforesaid submissions, learned counsel for the assessee, in view of judgment of this Court in Commissioner of Income-Tax v. Rohtas (2007) 311 ITR 460 argued that the Tribunal was right in deciding that the assessment order in the status of HUF was void. 6. We find merit in the contention of learne .....

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1.4.2008. The scope and the applicability of Section 292BB of the Act was considered by this Court in M/s Panchvati Motors (P) Ltd's case (supra) wherein it was observed that where an assessee appears and cooperates in the proceedings then later on he is precluded from raising objection that no notice was served upon him in time or was served upon him in an improper manner. The provision was held to be applicable to all pending proceedings. The relevant observations recorded therein read thu .....

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in any proceeding or inquiry under this Act that the notice was - (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in any improper manner. Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." 11. A presumption has been raised under the said provision relating to service of notice upon the assessee in respect of assessment or reassessment proceedin .....

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ore completion of assessment or reassessment. The provision has been made effective from 01.04.2008 and therefore, shall apply to all pending proceedings. The Central Board of Direct Taxes issued circular No. 1 of 2009 dated 27th March, 2009 (2009) 310 ITR (St.) 42 giving explanatory notes on the provisions relating to direct taxes contained in Finance Act, 2008. Clause 42.7 (at page 86 of the report) is relevant which relates to applicability of this provision and reads thus: "42.7 Applica .....

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was seriously disputed by the assessee. The Tribunal had also recorded therein that the assessee had never made any statement about the status of HUF in any letter on which the Assessing Officer had placed heavy reliance. It was in these circumstances that the assessment in the status of HUF was held to be invalid. In the present case, undisputedly the assessee himself had filed the revised return on 26.3.2002 in the status of HUF declaring the same income as was disclosed by him in his original .....

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