TMI Blog2015 (9) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in upholding the assumption of jurisdiction by the Assessing Officer (AO) under section 147 of the Act. He failed to appreciate that the jurisdictional pre-conditions necessary for assuming the jurisdiction under the said section had not been fulfilled in the present one. 2. The Commissioner of Income-tax (Appeals) ought to have held that no reasons were recorded by the Assessing Officer before issuing the notice under section 148 of the Act, as, till now the reasons have not been provided to the appellant. Communication of the alleged reasons by a letter which may not be the actual reasons does not fulfil this requirement. 3. On the alternative and without prejudice to the above, the Commissioner of Income-tax (Appeals), ought to have held that no belief was forward by the Assessing Officer as required by section 147 of the Act and the Assessing Officer had only relied on the findings given by the Commissioner of Customs without any independent application of mind which is not permissible in law. 4. In the alternative and without prejudice to the above, the Commissioner of Income-tax (Appeals), ought to have held that there was no material before the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that no notice has been issued and served under section 143(2), as a result of which the Assessing Officer did not get the jurisdiction to make assessment of the return filed by the assessee in response to the notice issued under section 148. It was further submitted that the issuance of notice under section 143(2) is the sine qua non for valid assumption of jurisdiction by the Assessing Officer to make any variation in the return filed by the assessee. It was submitted that the issue is covered with the judgment of the hon'ble Supreme Court in the case of Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC). It was submitted that there are many other judgments of various High Courts and various judgments of the Income-tax Appellate Tribunal on this issue. It was submitted that when this issue was raised before the learned Commissioner of Income-tax (Appeals), it has been accepted in the appellate order by the learned Commissioner of Income-tax (Appeals) that there is no evidence of service of the mandatory notice. But the learned Commissioner of Income-tax (Appeals) did not accept the submissions of the assessee on the ground that the assessee is debarred by the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961. Against the said assessment order, the assessee filed an appeal before the learned Commissioner of Income-tax (Appeals) and, inter alia, raised its grievance of non-service of the mandatory notice under section 143(2) of the Act. The assessee also filed an affidavit dated May 28, 2009, in support of its claim that no notice under section 143(2) has been served upon the assessee. 7. From the perusal of the assessment records, it was noted by us that one notice under section 143(2) dated August 11, 2008, was available in the assessment file. There was no evidence of its issuance and dispatch. There was no evidence of service of this notice in the file. Although, in the order-sheet , it has been mentioned that notice was issued under section143(2) of the Act. But there was nothing to show that it was dispatched by the Assessing Officer to the assessee. There was nothing to show that it was handed over by the Assessing Officer to the notice server. There was nothing to show that the notice has been issued out of the bounds of the Assessing Officer meant to be delivered to the assessee. It is further noted by us that the learned Commissioner of Income-tax (Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 143(2) was not mandatory within the stipulated time from the date of filing of return by the assessee in pursuance of notice issued by the Assessing Officer under section 148. But for the returns filed subsequent to this date, service of notice under section 143(2) was mandatory. Thus, it is clearly established that the Legislature is very much conscious of the requirement of law that service of notice under section 143(2) is mandatory for the Assessing Officer to assume jurisdiction to make assessment of the return filed by the assessee. Thus, in simple words and as per the plain reading of law, service of notice upon the assessee under section143(2) within the 12 months from the end of the month in which return is filed by the assessee in pursuance of the notice under section 148 issued by the Assessing Officer for reopening of the assessment, is mandatory to enable the Assessing Officer to assume jurisdiction to make assessment of the aforesaid return. This issue is no more res integra as there are umpteen numbers of judgments on this issue from various courts. We derive support from the judgment of the hon'ble Supreme Court in the case of Hotel Blue Moo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad Khaleeq, Commerical Taxes [2014] 44 taxmann.com 484 (All) held that the provisions of section 292BB of the Act has been inserted by the Finance Act, 2008, with effect from April 1, 2008, and thus, these provisions were applicable from the assessment year 2008-09 onwards and these are not applicable prior to that. The hon'ble Delhi High Court in the case of CIT v. Mani Kakar [2009] 178 Taxman 315 (Delhi) has observed that section 292BB is not applicable to the assessment year 2001-02. Similar view was taken by the Special Bench of the Income-tax Appellate Tribunal in the case of Kuber Tobacco Products P. Ltd. v. Deputy CIT [2009] 310 ITR (AT) 300 (Delhi) [SB] ; [2009] 117 ITD 273 (SB). It has been held by the hon'ble Kerala High Court in the case of Dr. K. M. Mehaboob v. Deputy CIT [2012] 76 DTR 90 (Ker) that section 292BB does not have retrospective effect. Further, the hon'ble Allahabad High Court in the case of Asst. CIT v. Greater Noida Industrial Development Authority [2015] 379 ITR 14 (All) (in Income-tax Appeal No. 142 of 2015 dated August 4, 2015) has held that section 292BB does not cure defect in issuance of notice, it does not have retrospective operation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act, consequently, does not arise and is not applicable. In the light of the aforesaid, since the Assessing Officer failed to issue notice within the specified period under section 143(2) of the Act, the Assessing Officer had no jurisdiction to assume jurisdiction under section 143(2) of the Act and this defect cannot be cured by taking recourse to the deeming fiction provided under section 292BB of the Act. Consequently, the Tribunal was justified in setting aside the order of the Assessing Officer as well as the order of the appellate authority. Thus, from these judgments, it is clear that section 292BB has no retrospective operation. 13. It is further seen by us that in the case before us, the proceedings were initiated by the Assessing Officer by issuing notice under section 148 dated August 29, 2007. In response to the same, return has been filed by the assessee on September 14, 2007. Thus, both the dates fell before April 1, 2008, being the date of coming into operation of section 292BB. It is well established principle of law that right to file an appeal is a substantive right. Thus, when the assessee filed its return of income on September 14, 2007, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as well as English courts is that 'all statutes other than those which are merely declaratory or which relate only to matters of procedure or of evidence are prima facie prospective' and retrospective operation should not be given to a statute so as to affect, alter or destroy an existing right or create a new liability or obligation unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospec tive only. We further derive support from the judgment of the hon'ble Supreme Court in the case of Gem Granites v. CIT [2004] 271 ITR 322 (SC) holding that every statute is prima facie prospective unless it is expressly or by necessary implication made to have retrospective operation. We also refer to the following judgments on this issue : (i) R. Rajagopal Reddy v. Padmini Chandrasekharan [1995] 213 ITR 340 (SC) ; and (ii) M. G. Pictures (Madras) Ltd. v. Asst. CIT [2003] 263 ITR 83 (Mad). Thus, in our considered view, the provisions of section 292BB could not have been applied upon the facts of this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the hon'ble Punjab and Haryana High Court in the case of CIT v. Cebon India Ltd. [2012] 347 ITR 583 (P H) holding that mere giving of dispatch number, cannot be taken as an evidence of issuance of notice and the contention of the Revenue that where the notice has been duly dispatched to the assessee, the irregularity or defect in issuing notice was curable under section 292BB of the Act was rejected by the hon'ble High Court. It was further held by the hon'ble High Court that in the absence of notice being served, the Assessing Officer has no jurisdiction to make assessment and the absence of service of notice could not be held to be curable under section 292BB of the Act. Thus, viewed from this angle also the provisions of section 292BB could not have been applied on the facts of this case. Further, reliance has been placed by learned counsel on the judgment of the co-ordinate Bench of Mumbai in the case of Sanjay Brothers v. Asst. CIT (I. T. A. No. 947/Mumbai/2013 dated January 9, 2015). It is seen by us that a similar view has been taken in the said judgment and we derive further support therefrom. 15. Third question that arises for our consideration is wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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