TMI Blog2016 (9) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... i S. Venkatesan, CA For TThe Respondent : Dr. Sibichen K. Mathew, CIT-III(DR) ORDER Per Sunil Kumar Yadav, Judicial Member This appeal is preferred by the assessee against the order of CIT(Appeals)-11, Bangalore dated 29.12.2014 for the assessment year 2011-12 inter alia on the following grounds:- 1. The orders of the Learned Lower Authorities are bad in law and contrary to the evidences and fact on record. 2. The Learned CIT(A) has erred in upholding the validity of the assessment proceedings in regard to the issue and service of notice u/s.143(2) of the Act. 3. The Learned CIT(A) without prejudice to the above ground, has erred in upholding the additions of s.2,37,/00,000/- without considering the written submissions dated: 9.10.2014 and 14.8.2014 and the evidences submitted therewith enclosed as annexures A B to this appeal Memo. 4. The Learned CIT(A) has grossly erred in holding that there is no such loan amount outstanding in the balance sheet of Krishna Enterprises, ignoring all the evidences placed before the Learned CIT(A) in the letters / written submission cited in Ground No.3 above. 5. The Learned CIT(A) has also grossly erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of ACIT v. Greater Noida Industrial Development Authority, 379 ITR 14 (All) in which Their Lordships have held that if notice u/s. 143(2) was not issued in time, the assessment framed consequent thereto is not a valid assessment and deserves to be quashed. 4. The ld. DR, on the other hand, has contended that the AO has categorically observed in his order that notice u/s. 143(2) was issued on 13.09.2012, therefore it was issued before the specified date i.e., 30.09.2012. Moreover, for the safer side, the AO has also issued a second notice. The ld. DR further contended that in any case, the assessee has joined the proceedings, therefore, he cannot raise a plea that notice u/s. 143(2) was not served. Moreover, the provisions of section 292BB covers this type of mistakes and as per these provisions, if the assessee appeared and joined the proceedings, he cannot raise a plea with respect to service of notice of hearing at appellate stage. 5. Having carefully examined the order of lower authorities in the light of rival submissions, we find that undisputedly the assessee has filed her return of income on 20.8.2011 and in support thereof, copy of acknowledgement is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003; (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return: Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 11. Under clause (ii) of sub-section (2) of Section 143, the Assessing Officer is requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. 14. The Supreme Court clearly held that omission on the part of the Assessing Officer is not a procedural irregularity and is incurable and, therefore, the requirement of notice under Section 143(2) of the Act cannot be dispensed with. 15. Similar view was held by a Division Bench of this Court in Commissioner of Income Tax II Lucknow Vs. Salarpur Cold Storage (P) Ltd. , (2014) 50 Taxman.Com.105 = 2014-TIOL ITA 1522-HC-ALL-IT, Commissioner of Income-tax, Faizabad Vs. Adarsh Travel Bus Service, (2012) 17 taxmann. Co 140(All.) as well as in Commissioner of Income-tax Vs. Mukesh Kumar Agrawal, 345 ITR 29 and Commissioner of Income-tax Vs. Rajeev Sharma, (2010) 192 Taxman 197 (All.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon 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 19. Section 292BB of the Act was inserted by the Finance Act, 2008 with effect from 1 April 2008. Section 292 BB of the Act provides a deeming fiction. The deeming fiction is to the effect that once the assessee has appeared in any proceeding or cooperated in any enquiry relating to an assessment or reassessment, it shall be deemed that any notice under the provisions of the Act, which is required to be served on the assessee, has been duly served upon him in time in accordance with the provisions of the Act. The assessee is precluded from taking any objection in any proceeding or enquiry that the notice was (i) not served upon him; or (ii) not served upon him in time; or (iii) served upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to Section 292 BB of the Act, however, carves out an excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Officer gets the jurisdiction to proceed to reassess and make the assessment order. The mandate of Section 148(1) of the Act is, that reassessment shall not be made until there has been a service of notice which is a condition precedent to making an order of assessment. The Supreme Court further held that the requirement of issue of notice is satisfied when a notice is actually issued and that service under the Act, 1961 is not a condition precedent to conferment of jurisdiction on the Income Tax Officer to deal with the matter but it is only a condition precedent to the making of the order of assessment. The Supreme Court held: Section 34, conferred jurisdiction on the Income-tax Officer to reopen an assessment subject to service of notice within the prescribed period. Therefore, service of notice within limitation was the foundation of jurisdiction. The same view has been taken by this Court in Janni v. Indu Prasad Bhat, 72 ITR 595 as also in C.I.T. v. Robert, 48 ITR 177. The High Court in our opinion went wrong in relying upon the ratio of 53 ITR 100 in disposing of the case in hand. The scheme of the 1961 Act so far as notice for reassessment is concerned is quite di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 24. The contention that adequate opportunity was not given to the appellant before the Tribunal now becomes redundant in view of the specific finding given by us on the issuance of the notice under Section 143(2) of the Act. However, we must observe that the appellant was not fair to the Court in alleging that no proper opportunity was given or that the Tribunal gave no directions to the Department to produce the original records. We are constrained to observe that there is no affidavit of the departmental representative who had appeared before the Tribunal to state on oath that the observations made by the Tribunal with regard to the production of the original records at the stage of hearing of the stay application and thereafter was perverse. In the absence of any affidavit being filed, it was not open for the Department to allege that no proper opportunity was given. Further, we find that the assertion made in paragraph 16 of the Supplementary Affidavit that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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