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A.C.I.T., Circle 10 (1) , New Delhi Versus M/s. Dimension Promoters Pvt. Ltd. And Vice-Versa

2018 (1) TMI 393 - ITAT DELHI

Validity of assessment - non-issue of notice u/s. 143(2) - Held that:- From the findings of the Assessing Officer and ld. CIT(A), one thing is apparent that no notice u/s. 143(2) was issued to the assessee as the ld. CIT(A) himself has held that mere non-issuance of notice u/s. 143(2) by itself cannot be said to vitiate the assessment proceedings. In a number of judgments delivered by various Courts and Tribunals, it has been held that service of notice u/s. 143(2) is mandatory requirement. See .....

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gal issues. 2. At the outset, the ld. AR took up ground No. 3 of cross objectons, which relates to non-issue of notice u/s. 143(2) of the IT Act. The ld. AR invited our attention to the order of assessment and submitted that nowhere in the assessment order, the Assessing Officer mentioned about the issuance of notice u/s. 143(2) of the Act. Further inviting our attention to the ld. CIT(A) s order, the ld. AR submitted that when this ground was raised before the ld. CIT(A), the ld. CIT(A) has hel .....

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362(SC) (ii). Directorate of Income Tax vs. VR Educational Trust, 2013(12) TMI 745 (Delhi High Court) (iii). Alpine Electronics Asia Pvt. Ltd. Vs. DGIT, 341 ITR 247 (Del.) (iv). Dalmia (R) vs. CIT, 236 ITR 480 (SC) (v). CIT vs. Pawan Gupta, 318 ITR 322 (Del.) (vi). DCIT vs. M/s. Silver Line 2014(10) TMI 141 ITAT Delhi (vii). CIT vs. Rajeev Sharma, 336 ITR 247 (Del.) (viii). ITO vs. Smt Sukhini P. Modi, 295 ITR (AT) 169 (Ahmedabad Bench) (ix). UKT Software Technologies Pvt Ltd vs. ITO, 2013 (1) T .....

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at Energy Corporation, 337 ITR 389 (Del). 4. The ld. AR, in his rejoinder, submitted that after considering the judgment of Madhya Bharat Energy Corpn. (supra), the Hon ble Delhi High Court in the case of Alpine Electronics Asia Pvt. Ltd. Vs. DCIT (supra) and in V.R. Education Trust in appeal No. 510 of 2011 has again held that service of notice u/s. 143(2) is a mandatory requirement even in the proceedings u/s. 148 of the Act. 5. We have heard the rival parties and have gone through the materia .....

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wer Limited vs. CIT vide its judgment dated 29.05.2017 has also considered similar issue by following the judgment of Hotel Blue Moon, 321 ITR 366 (SC) and CIT vs. Jai Shree Shiv Shankar and has again decided the issue in favour of the assessee by holding as under : 13. In response to the above submissions, Mr. Dileep Shivpuri, learned Senior Standing Counsel for the Department, submitted that as far as second submission is concerned, the facts speak for themselves. He had nothing further to add .....

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s (P.) Ltd. [2016]383 ITR 448 (Del). In the last mentioned judgment, this Court held that the delay in issuing a notice under Section 143(2) of the Act would be fatal to the re-assessment proceedings. 15. For the aforementioned reasons, it is held that as far as the second ground is concerned, the Petitioner should succeed. In that view of the matter, the Court does not consider it necessary to examine the first ground of challenge. The impugned notice dated 22 February, 2013 issued to the Petit .....

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dated 17th August, 2011. This fact has been noted by the Hon ble High Court in the case of Pr. CIT Vs. Sri Jai Shiv Shankar Trader Pvt. Ltd. at para -9 which reads as under. outset drew the attention of this Court to an order passed by this Court on 17th August, 2011 in Review Petition No.441/2011 in ITA No.950/2008 (CUT v. Madhya Bharat Energy Corporation) whereby this Court reviewed its main judgment in the matter rendered on 11th July 2011 on the ground that the said appeal had not been admit .....

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ation (supra) is not of any assistance to the Revenue as far as the issue in the present case is concerned. Therefore, this judgment is also not relevant and in view of the facts discussed on the judgment relied on by the Ld. DR, this is distinguishable on the facts. 7. Hon ble Delhi High court in the case of CIT vs. Shri Jai Shiv Shankar Pvt. Ltd. (supra) has also considered the judgment of Delhi High court in the case of Mandhya Bharat Energy Corporation (supra) and has also considered the dec .....

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n 17th August, 2011 in Review Petition No.441/2011 in ITA No.950/2008 (CIT v. Madhya Bharat Energy Corporation) whereby this Court reviewed its main judgment in the matter rendered on 11th July 2011 on the ground that the said appeal had not been admitted on the question concerning the mandatory compliance with the requirement of issuance of notice under Section 143(2) of the Act. In its review order, this Court noted that at the time of admission of the appeal on 17th February, 2011 after notic .....

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01 (Del) would apply. The said judgment held that since on the facts of that case the Assessee had been properly served with the notice under Section 143(2) of the Act within the statutory time limit prescribed under the proviso thereto, the ITAT should not have set aside the re-assessment in toto. Ms Aggarwal placed reliance on Section 292BB of the Act and urged that the Assessee having not raised any objection about non service of the notice under Section 143(2) of the Act either at any time b .....

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he return originally filed should be treated as the return filed pursuant to the notice under Section 148 of the Act, was fatal to the order of re-assessment. 12. The narration of facts as noted above by the Court makes it clear that no notice under Section 143(2) of the Act was issued to the Assessee after 16th December 2010, the date on which the Assessee informed the AO that the return originally filed should be treated as the return filed pursuant to the notice under Section 148 of the Act. .....

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the Act formed the subject matter of at least two decisions of the Allahabad High Court. In CIT v. Rajeev Sit anna (2011) 336ITR 678 (All.) it was held that a plain reading of Section 148 of the Act reveals that within the statutory period specified therein, it shall be incumbent to send a notice under Section 143(2) of the Act. It was observed: the provisions contained in sub-Section (2) of Section 143 is mandatory and the legislature in their wisdom by using the word 'reason to believe' .....

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itted by the Assessee in response to notice under Section, the entire procedure adopted for escaped assessment, shall not be valid. 15. In a subsequent judgment in CIT v. Salarpur Cold Storage (P.) Ltd. (2014) 50 Taxmann.com 105 (All) it was held as under: 10. Section 292 BB 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 .....

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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 exception to the effect that the Section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292 BB of the Act cannot obviate the requirement of complying with a jurisdictional con .....

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nt, the Supreme Court held that the requirement to issue notice under Section 143(2) was mandatory. It was not "a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. The Madras High Court held likewise in Sapthagiri Finance & Investments v. ITO (2013) 90 DTR 289 (Mad). The facts of that case were that a notice under Section 148 of the Act was issued to the Assessee seeking to reopen the assessment f .....

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with a notice under Section 143(2) of the Act. It was observed that: "Merely because the matter was discussed with the Assessee and the signature is affixed it does not mean the rest of the procedure of notice under Section 143(2) of the Act was complied with or that on placing the objection the Assessee had waived the notice for further processing of the reassessment proceedings. The fact that on the notice issued u/s 143(2) of the Act, the assessee had placed its objection and reiterated .....

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