TMI Blog2015 (9) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... on while concurring with the view of the / assessing officer that the additional ground raised by the assessee before the tribunal is legally not sustainable for the reason that the same is not emanating from assessment order or from CIT(A)'s order which is appealed against before the ITAT. (2)That the Id. CIT(A) is erred to adjudicate the issue of jurisdiction merely following the remand report of the AO without referring to the case record as much as copy of reasons recorded u/s. 147 in contrast to direction of H'ble ITAT without appreciating that his direction to the AO was very precise in accordance to the direction of tribunal. (3)That the Id. CIT(A) is erred to concur with the view of the assessing officer and hold, where it is admitted fact that reopening is without any additional evidence or tangible material, that the AO acquires jurisdiction u/s. 147 if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year ignoring the cited judicial pronouncement. (4)That the Id. CIT(A) is erred to concur with the view of the assessing officer and hold that the AO is not bound to serve notice u/s. 143(2) but ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-opening the assessment, that additional ground raised before the Tribunal was a legal ground. After considering the submissions of the assessee and the AO, the FAA held that there was no violation of principles of natural justice, that it was not deprived of having reasons of reopening, that the assessee had not asked for reasons for reopening, that Authorised Representative(AR)of the assessee participated in the assessment proceedings, that before the then FAA issue of non supply of reasons was not agitated, that the assessee had for the first time vide its letter dated 21. 09. 2008 had asked for the reasons for reopening and copy of the notice issued u/s. 143(2)of the Act, that there was no propriety on part of the assessee to raise an objection by way of additional ground of appeal regarding service of notice u/s. 143(2)of the Act. He referred to the provisions of section 292BB of the Act and held that the assessee had not raised any objection before completion of re-assessment proceedings, that it was not entitled to raise any such objection without any valid reason subsequently, that it had not raised any objection before the then FAA, that additional ground was not emanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the Act, the order passed in pursuance thereto was bad in law and ab initio void. He erred in holding that issuing the notice u/s. 143(2) was a procedural matter. The Tribunal had discussed and decided the issue as under: 4. Before us, the Authorised Representative (AR) submitted that there was no escapement of income, that the reassessment was result of change of opinion by the AO and hence was not as per the provisions of the Act, that no new tangible matter for reopening the assessment was available with the AO, that notice under section 143 (2) was issued after 6 months, that the notice issued under sections 143 (2) was beyond time limit prescribed by the Act. He relied upon cases of Hotel Blue Moon (321 ITR 362), Late J. M. Scindia (300 ITR 193) and (227 CTR 387). He further submitted that if the assets were introduced in AOP, then, as per the provisions of section 45 (3) of the Act, that market value could not be replaced for original value, that while filing the return of income amount recorded in the books of accounts was rightly shown as the consideration for the plot of land. He also referred to the decision delivered by the B bench of the ITAT Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, but the assessee is precluded from doing so for and from AY 200809. 7. We find that before the FAA the assesseecompany had raised the objection with regard to issue of notice beyond the prescribed time limit. In the grounds of appeal filed before the FAA and in the statements of facts submitted to him, the assessee had clearly mentioned that notice under section 143(2) of the Act was issued after 6 months i. e. after period stipulated by the Act lapsed. We find that in the matters of Panchavati Motors Private Ltd. and Aravali Engineers (supra) objection, with regard to issuance of notice after the prescribed limit, was raised for the first time before the Tribunal. But, in the case under consideration, the assessee had raised the objection before the FAA and the issue was decided against the assesseecompany by the FAA. The assessee has challenged the said adjudication of the FAA before us. In form number 36 filed by the assessee, it has been clearly mentioned that there was violation of provisions of section 143(2) of the Act. Thus, the facts of the case under consideration are different from the case laws relied upon by the DR. It is true that in the case of Hotel Blu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filing of the return. Therefore, he held the assessment void. This finding was affirmed by the Tribunal. The Hon ble P H High Court, decided the appeal, filed before it, as under : . . . that a concurrent finding had been recorded by the Commissioner (Appeals) and the Tribunal on the question of date of service of notice. The notice was not served within the stipulated time. Mere giving of dispatch number would not render the finding perverse. In the absence of notice being served, the Assessing Officer had no jurisdiction to make assessment. Absence of notice was not curable under section 292BB of the Act. We would now reproduce the relevant portion of the decision of Sri Ishwar Sadan Co-op. Housing Society(supra). One of us was party to that order and it reads as under: 2. The brief facts of the case are that the assessee is a registered Cooperative Housing Society. The return of income was filed on 22. 08. 2002 declaring the total income at Rs. Nil. The same was processed u/s. 143(1) of the l. T. Act. Subsequently, it was learnt that the assessee had entered into an agreement for sale/transfer of TDR/FSI with Narang Developers Pvt. Ltd. , for a consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT Vs. Mr. Salman Khan in Income Tax Appeal (L) No. 2362 of 2009 dated 1. 12. 2009 has categorically held that sections 292BB 292B of the Income Tax Act have been amended from 1. 4. 2008 and thus have come into operation prospectively for the A. Y. 200910. Further, this view has been again reiterated by Hon'ble Bombay High Court in another case styled as CIT Vs. Virendra Kumar Agarwal Income Tax Appeal No. 2429 of 2009 dated 7. 1. 2010 . Since the assessment year involved in this case is 200102, hence, the newly inserted provision of section 292BB is not applicable to this year. In view of the said legal position as discussed above, the assessment proceedings in consequence of reopening u/s. 147 were bad in law and cannot be sustained and are accordingly set aside. 6. Since, while deciding the above ground nos. 1 and 2, we have set aside the reopened assessment proceedings itself, hence, the consequential other grounds of appeal (i. e. , ground nos. 3 4) have become infructuous and rendered academic in nature and as such do not require any adjudication at this stage. In view of our above findings, the additions made/confirmed by the lower authorities are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precedent before embarking upon the assessment. Mere issuance of notice u/s 147 does not empower the Assessing Officer to frame the assessment order. Apart from the decisions cited above, a reference can also be made to the Judgment of the Hon'ble Bombay High Court in the case of ACIT Vs. Geno Pharmaceuticals Ltd. (Tax Appeals Nos. 75 to 78 of 2012) dated 14/02/2013. In the said case, the Revenue was challenging the decision of the Tribunal holding that the issuance of notice u/s 143(2) of the Act after reopening of the case was mandatory. The Hon ble High Court repelled the challenge of the Revenue, and the following discussion in the Judgment of the Hon'ble High Court is relevant: 4. So far as Tax Appeals No. 77/2012 and 78/2012 are concerned, in both these appeals, the ITAT has held that the issuance of notice after reopening of the case was mandatory and this order is under challenge. It is contended that the said order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01. 04. 2008, in which it is stated that in a case where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the last date of hearing of the appeal on 12. 06. 2015, the following report of the concerned Assessing Officer dated 8/6/2015 was furnished: Sub: Mr. Santosh Sawant. ITA Nos. 830/M/11 (A.Y. 2005-06) CO 97/M/14 PAN-AADPS5520L Ref: Letter No. Jt. CIT (Sr. AR)/ITAT/ H Bench/2015-16, dated 02. 06. 2015. Kindly refer to the above. 2. I once again state that after restructuring, I have taken over this charge w.e.f. 17- 12-2014. The ITO- 30(2)(3), Mumbai who was having jurisdiction of the abovementioned assessee has handed over only time-barring cases. On receipt of letters from you, time and again I have requested the ITO-30(2)(3) to transfer the case records immediately to this office to enable me to submit the report in time. The ITO- 30(2)(3) has now forwarded on 8-06-2015 some folders (except A. Y. 2005-D6 being not traceable) including one survey folder, which were available with him. 3. I am therefore submitting the 3 sets of copies of (i) survey Report and (ii) statements recorded of Shri Santosh Sawant, Owner and assessee, Shri Vipin S. Randive and shri Sampat J. Thube, Manager of M/s. Batatavada Samrat on 18-11-2004 during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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