TMI Blog2012 (8) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT (Per : HONOURABLE MR.JUSTICE V. M. SAHAI) 1. We have heard Ms. Paurami B. Sheth, learned Central Government Standing Counsel appearing for the Revenue in this Tax Appeal on the following proposed substantial questions of law :- [A] Whether the Appellate Tribunal is right in law and on facts in holding that once the notice u/s. 143(2) was not issued within the prescribed time, the whole block assessment order would be null and void and bad in law ? [B] Whether the Appellate Tribunal is right in law and on facts in deleting the addition of ₹ 1,42,01,000/- made on account of unexplained cash credits ? [C] Whether the Appellate Tribunal is right in law and on facts in holding that once the notice u/s.143(2) was not issued within the prescribed time, the whole block assessment order would be null and void and bad in law, despite the assessee not having raised any objection before the passing of the assessment order and despite the provisions of section 292BB of the Act ? Since the aforesaid the questions are inter-connected, therefore, we have considered all the three questions together. 2. The facts in brief are that one Khurana Group is involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee on 6.10.2004, therefore, notice under section 143(2) ought to have been issued on or before 31.10.2005. But the notice under section 143(2) was issued on 6.7.2006 and as such the notice was beyond a period of 12 months from the end of the month in which the return was furnished by the assessee, therefore, the assessment order passed by the Assessing Officer on the basis of a time barred notice was bad in law and deserved to be set aside. The CIT (A) relying on the decision of the Apex Court in Assistant Commissioner of Income Tax and another v. Hotel Blue Moon [2010] 321 ITR 362 (SC) and Smt. Bandana Gogoi v. Commissioner of Income Tax and another, [2007] 289 ITR 28 (Gauhati) held that the notice was required to be issued under section 143(2) of the Act was a mandatory notice and if it had not been served within a period of 12 months, then the assessment proceedings on the basis of such a notice would be time barred and it will render the proceedings initiated by the Assessing Officer null and void. The CIT (A) by his order dated 28.9.2007 allowed the appeal and deleted the additions made by the Assessing Officer. 5. In the appeal filed by the Revenue the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) served upon him in an 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. 8. The Finance Act, 2008, w.e.f. 1.4.2008 had inserted a new section 292BB in the Act. The reason for inserting section 292BB has been explained in Circular No.1/2009 dated 27.3.2009. According to the Circular, paragraph 42.7, the amendment has been made applicable w.e.f. 1.4.2008 which means that the provisions of new Section 292BB shall apply in all proceedings which are pending on 1.4.2008. On the strength of this Circular, learned counsel for the Revenue has vehemently urged that the provisions of section 292BB would also apply to the instant case as on 1.4.2008 the appeal of the Revenue was pending before the Tribunal, though the case relates to block assessment period 1.4.1997 to 25.7.2002. 9. It cannot be disputed that by inserting section 292BB which is a procedural provision, a legal fiction has been created which cures the defect in the service of notice, if the assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken in the appeal. The Court was of the opinion that even before the Tribunal, a point was not raised in the memo of appeal, but was sought to be raised by way of an amendment. The Division Bench came to the conclusion that whether the notice was properly served or not on the assessee was a mixed question of law and fact and the Tribunal should not have allowed the assessee to raise the plea of service of notice for the first time in second appeal as an additional ground when there was no factual material available for recording a finding on the merits. 12. The decision in Premium Capital Market and Investment Limited (supra) is not applicable to the facts of case in hand. From the facts of the instant case it is clear that no notice was issued at all under section 143(2) of the Act within a period of 12 months from the end of the month in which return was furnished by the assessee. Therefore, there was no question of service of any notice on the assessee within the time frame fixed by the proviso to section 143(2) of the Act. No doubt, the assessee had not raised any objection before the Assessing Officer with regard to validity of notice under section 143(2), but in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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