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TMI Blog2011 (4) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... 93/- and ₹ 80,000/- by treating them as agriculture income against the business income treated by A.O. The Ld. CIT(A) failed to appreciate the (Khasara) report of Lekhpal wherein growing of potato, cucumber, watermelon and melon was denied. 3. The Ld. CIT(A) has erred in law and facts in deleting the amount of ₹ 6,77,600/- on account of unexplained advances received by holding that transactions are genuine and routed through bank A/c. Ld. CIT(A) failed to appreciate that identity and genuineness of transactions remained unexplained before the A.O. 4. Any other ground that may arise or becomes incidental during the pendency of appeal." 2. In assessee's C.O. No.40/Lkw/10, following grounds have been raised: "1.1 BECAUSE the CIT(A) has erred in law and on facts in confirming the addition of sums aggregating ₹ 3,95,000/- out of ₹ 5,87,000/- appearing as liability in the balance sheet towards advance received from various persons for purchase of plots as non-genuine, without appreciating the facts and material on record. 1.2 BECAUSE it is undisputed fact that the assessee was a commission agent, facilitating various persons for the purchase of plots from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- and agricultural income of ₹ 9,19,972/-. The case was selected for scrutiny and the notice u/s 143(2) dated 29/09/2008 was issued and sent by Speed Post receipt No. EU9480130871N to the assessee. the Assessing Officer framed the assessment at an income of ₹ 26,62,724/- by making the various additions. 5. The assessee carried the matter to learned CIT(A) and challenged the validity of the assessment order on the ground of non service of notice u/s 143(2) of the I.T. Act within a period of 12 months as required under the proviso to section 143(2)(ii) of the I.T. Act and submitted to the learned CIT (A) that the case of the assessee was selected for scrutiny vide notice dated 29/09/2008 u/s 143(2) of the I.T. Act which was sent through Speed Post on the address "Shri Mohd. Khalik, 9/13, Vikas Nagar, Lucknow" which is incorrect as this address pertains to M/s K.K. Palace, which is a different entity altogether. It was further submitted that as per the information on record and also the address mentioned in the Income Tax return the correct address was "Mohd. Khaleeque, 529Ka/205, Old Khurram Nagar, Lucknow", from where the assessee had been carrying out his business ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation supplied by the Income Tax Officer-III(2), Lucknow. It was contended that the notice u/s 143(2) of the I.T. Act was not served within the stipulated time, therefore, the assessment framed without service of valid notice was void ab initio. The reliance was placed on the following case laws: (i) CIT vs. AVI-Oil India Ltd. [2010] 323 ITR 242 (P&H) (ii) Nulon India Ltd. vs. Income Tax Officer [2010] 323 ITR 681 (Del) (iii) ITAT Lucknow 'B' Bench order dated 19/03/2010 in I.T.A. No.495/Luc/09 for the assessment year 2002-2003 in the case of Shri Sanjeev Agarwal vs. ACIT (iv) ITAT Lucknow 'B' Bench order dated 07/03/2011 in I.T.A. No.565/Luc/10 for the assessment year 2002-2003 in the case of Rajeev Agarwal vs. ACIT (v) Andhra Pradesh Cement Co. Ltd. vs. CIT [1998] 232 ITR 364 (vi) Karimtaruvi vs. State of Karnataka [1966] 60 ITR 62 (vii) Kanpur Plastipack Ltd. vs CIT in I.T.A. No. 28 of 2007 (Alld) order dated 30/03/2007 (viii) CIT vs. Eqbal Singh Sindhana [2010] 304 ITR 177 (Del) (ix) Virendra Dev Dixit vs. ACIT [2010] 41 DTR (All) 43 (x) CIT vs. CEBON India Ltd. [2010] 229 CTR 188 (P&H) (xi) Hotel Blue Boon [2010] 321 ITR 362 (SC) (xii) CIT vs. Rajeev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refully gone through the material available on the record. In the present case, the assessee has challenged the validity of the assessment on the basis that the statutory notice u/s 143(2) has not been served upon the assessee within the stipulated period of 12 months from the date of filing of the return. In the present case the assessee filed the return of income on 08/11/2007 and the Assessing Officer issued the notice dated 29/09/2008 u/s 143(2) of the I.T. Act, 1961 (in short, the I.T. Act), which was sent through Speed Post on following address: 9.1 The copy of the said notice is available at page No. 3 of the assessee's compilation. The said notice was sent by Speed Post vide No.EU9480130871N at 7.17 P.M. on 30/09/2008. The address of the assessee as mentioned in the assessment order, in the impugned order of the CIT (A) and Form No. 36A filed by the assessee and also by the Department is as under: 9.2 The above address is definitely different from the address on which the notice was sent by the Assessing Officer. The claim of the assessee is that the said notice was not received by him. The Department has also not brought on record any material to substantiate that the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch read as under: "282. (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named,- (a) by post or by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in subsection (1) may be delivered or transmitted to the person therein named. Explanation.-For the purposes of this section, the expressions "electronic mail" and "electronic mail message" shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (page 24): "5.12 Since, under the provisions of sub-section (1) of the new section 143, an assessment is not to be made now, the provisions of subsections (2) and (3) have also been recast and are entirely different from the old provisions. A notice under sub-section (2) which will be issued only in cases picked up for scrutiny, is now issued only to ensure that the assessee has not understated his income or has not computed excessive loss or has not underpaid the tax in any manner while furnishing his return of income. This means that, under the new provisions, in an assessment order passed under section 143(3) in a scrutiny case, neither the income can be assessed at a figure lower than the returned income, nor loss can be assessed at a figure higher than the returned loss, nor a further refund can be given except what was due on the basis of the returned income, and which would have already been allowed under the provisions of section 143(1)(a)(ii). 5.13 A proviso to sub-section (2) provides that a notice under the subsection can be served on the assessee only during the financial year in which the return is furnished or within six months from the end of the month in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added in the grounds of appeal. In the case of National Thermal Power Company Ltd. v. Commissioner of Income Tax (supra), the Apex Court held as follows: "The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income Tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., Commissioner of Income Tax v. Anand Prasad (1981) 128 I.T.R. 388(Delhi); Commissioner of Income Tax v. Karamchand Premchand P Ltd., (1969) 74 ITR 254 (Guj) and Commissioner of Income Tax v. Cellulose Products of India Ltd., (1985) 151 ITR 499 (Guj)(FB). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability." 9.11 On a similar issue the Hon'ble Delhi High Court in the case of Nulon India Ltd. vs. Income Tax Officer (Delhi) [2010] 323 ITR 681 (Delhi) has held as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has appeared in such proceedings or co-operated in the inquiry relating to assessment or reassessment." 9.13 It has further been held that: "Section 292BB could not be construed to have retrospective operation and it had to be applied prospectively. Section 292BB is applicable to the assessment year 2008-09 and subsequent years. The assessee was not precluded from taking any objection prior to April 1, 2008, i.e., upto March 31, 2008, under section 292BB, regarding invalidity of assessment or reassessment on the ground of improper issuance of notice." 9.14 Similarly the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Cebon India Ltd. [2010] 229 CTR (P&H) 188 has held that: [Head Note) - "Mere giving of dispatch number will not render the said finding to be perverse - In the absence of service of notice the Assessing Officer had no jurisdiction to make assessment - Absence of notice cannot be held to be curable under section 292BB of the I.T. Act." 9.15 The Hon'ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd. vs. State of Kerala 60 ITR 262 has held as under: "It is well-settled that the Income-tax Act as it stands amended on the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot served upon the assessee, therefore, assessment framed u/s 143(3) of the I.T. Act is not a valid assessment which deserves to be quashed. We order accordingly. 11. Before parting it is relevant to point out that as far as the judgment of Hon'ble Jurisdictional High Court relied by the learned D. R. in the case of Hindustan Transport Co. vs. Inspecting Assistant Commissioner (All) 189 ITR 326 is concerned, in the said case the issue involved relates to the territorial jurisdiction of the Assessing Officer u/s 124 of the I.T. Act while in the present case the issue involved relates to the service of notice within the period stipulated u/s 143(2) of the I.T. Act before finalization of the assessment u/s 143(3) of the I.T. Act. Therefore, the case relied by the learned D. R. is distinguishable on facts. Since we have decided the legal issue raised by the assessee vide ground No. 4 of the Cross Objection in his favour, therefore, no finding has been given on the other issues raised by the assessee on merit. Similarly no findings are required to be given in the appeal of the Department wherein the issue relates to the deletion of addition on merit because we have allowed the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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