TMI Blog2017 (7) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 292BB is squarely applicable in the present case, precluding the assessee from raising any objection with regard to the service of notice u/s. 148(1). The decision by the ld. CIT(A) is accordingly upheld, dismissing the assessee’s Grounds 1.1 to 1.4. - ITA No.3119/Mds/2016 - - - Dated:- 12-7-2017 - SHRI SANJAY ARORA, ACCOUNTANT MEMBER For the Appellant : Shri G.Baskar, Advocate For the Respondent : Shri B.Nischal, Jt. CIT ORDER Per Sanjay Arora, AM: This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-2, Chennai ( CIT(A) for short) dated 30.09.2016, dismissing the assessee s appeal contesting his assessment u/s. 143(3) r/w s. 147 of the Income Tax Act, 1961 ( the Act hereinafter) dated 28.02.2013 for the assessment year (AY) 2005-06. 2. Though the appeal raises both the jurisdictional issue as well assails the assessment on merits (of the income assessed), the ld. Authorized Representative (AR), the assessee s counsel, during hearing did not press the grounds on merits, stating that he wished to confine his pleadings to the jurisdictional aspect alone. There were accordingly no arguments on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year at . 31.11 lacs, including LTCG at . 30.73 lacs, i.e., as returned. The only objection raised by the assessee before the AO was with regard to the claim u/s. 54. The assessee s challenge to the service of notice u/s. 148 was before the first appellate authority for the first time. The same, however, did not find his favour in view of the s. 292BB of the Act in-as-much as without doubt no objection qua the service of notice u/s. 148(1) was raised during the course of the assessment proceedings. Aggrieved, the assessee is in second appeal. 3. I have heard the parties, and perused the material on record. 3.1 The question that arises is if s. 292BB is applicable to the impugned assessment or not. The assessee s case, relying on the decisions in CIT v. Chetan Gupta [2016] 382 ITR 613 (Del) and Kuber Tobacco Products (P.) Ltd. v. Dy. CIT [2009] 117 ITD 273 (Del)(SB), is that the provision is prospective, so that it shall apply to proceedings for AY 2008-09 and subsequent years. The Revenue, on its part, places reliance on the decision in CIT v. Panchvati Motors (P.) Ltd. [2011] 59 DTR 289 (P H). Section 292BB of the Act, inserted on the statute book by Finance Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates therein, culminating in completion of assessment or reassessment. The same operating as a restriction on the right of the assessee to raise an objection/s qua service of notice, i.e., to the assessee s prejudice, there is no question of the said provision being retrospective in operation. In fact, even the Circular by the Board admits this position, making it abundantly clear that only the proceedings pending as on 01.04.2008, the date on which amendment comes into effect, would be subject to the amended law. That is, the proceedings concluded or assessment completed before 01.04.2008 is not impacted by the said amendment in any manner; the curb on the assessee s untrammeled right to raise objection/s qua service of a notice at any stage (even where he participates or cooperates in the proceedings) coming into effect from 01.04.2008 only. That is, the curb becomes applicable from a particular, specified date. How, then, one wonders, could it possibly relate to or have reference to a particular assessment year, stated to be AY 2008-09 onwards? It is a mere coincidence that the specified date is from the beginning of a previous year, and may well have been from any other date, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which those proceedings or the assessment (of his income) relate, and the only thing relevant is that the said restriction shall be operative from a particular date, so that the provision shall stand attracted, irrespective of the year to which the proceedings or assessment relate, the pendency of the relevant proceedings on the said date. The Board Circular (supra), which is in the nature of contemporaneous exposito, referred and relied upon in Panchvati Motors (P.) Ltd. (supra), clearly spells out the correct legal position in this regard. 3.2 On the mind of the Bench in this regard being conveyed during hearing to the ld. AR, he would raise another objection, claiming that notice u/s. 148(1) dated 31.03.2012 was not validly issued. In-as-much as the same raises a legal issue, the ground, raised orally, was admitted in pursuance to r. 11 of the Income Tax (Appellate Tribunal) Rules, 1963, making it at the same time clear that the same, i.e., the said ground, raised for the first time before the tribunal, could be answered only on the basis of undisputed facts, i.e., as borne out by the record. The assessee s charge is that the notice u/s. 148 is not issued in-as-much as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra), in the following words: A clear distinction has been made out between issue of notice and service of notice under the 1961 Act. Section 149 prescribes the period of limitation. It categorically prescribes that no notice under section 148 shall be issued after the prescribed limitation has lapsed. Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of limitation as March 31, 1970, was the last day of that period. Service under the new Act is not a condition precedent to conferment of jurisdiction on the Income-tax Officer to deal with the matter but it is a condition precedent to the making of the order of assessment. (pg. 165) How could then, one may ask, even de hors s. 292BB, and assuming non service of notice u/s. 148, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall cause impugned assessment to be a nullity, but only its set aside for fresh assessment. 3.3 Coming back to the question of the assessee disputing the issue of notice u/s. 148 on the ground that the issuing authority retains control over the same, and that it was not handed over to the postal department, which only shall mark its issue. This, given the settled law that issue implies the notice being put in the process of service, with the issuing authority loosing effecting control over the same, is a question of fact, precluding its admission in-as-much as the relevant facts are disputed. Further, even otherwise, it is the assessee on whom the burden lies to exhibit, at least prima facie, that the apparent is not real, and that, though signed, the AO retained control over the notice and was not put in the process of its service. So however, to ensure that the Revenue has some basis to claim issue of notice on 31.03.2012, the ld. DR was called upon by the Bench to furnish any material with the Revenue in this regard. He submitted the following documents: a). List of approved cases, which bears assessee s name with the approval date (for issue of notice u/s. 148(1)) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 2014. No material rebutting the said documents or contradicting the said explanation has been brought on record. The same, even so, would make the facts disputed, precluding the legal challenge to admission of the legal aspect as to jurisdiction for want of issue of notice u/s. 148 on 31.03.2012. The said objection by the ld.AR cannot therefore, i.e., in any case, be admitted. 4. In sum: The decision in Chetan Gupta (supra) does not, in ratio, lay down the law as being ascribed to it; there being in fact no discussion on that aspect of the matter therein. The decision in Panchvati Motors (P.) Ltd. (supra), on the other hand, clearly lays down the stated legal position. The assessment year involved in that case was AY 1998-99, and the assessee had, as in the present case, admittedly not raised any objection in respect of the service of notice u/s. 148. The Hon'ble Court, whose order is thus squarely applicable, clarified that where no objection regarding a service of notice u/s. 148 of the Act was raised before the AO, the argument that there was no valid service of notice, as advanced by the assessee before it, fails (refer para 13 of the decision). The question of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee qua service of notice, which s. 292BB seeks to regulate, implies a disputed set of facts, and not an admitted fact on the basis of which no jurisdiction stands assumed. Sec. 292BB is squarely applicable in the present case, precluding the assessee from raising any objection with regard to the service of notice u/s. 148(1). The decision by the ld. CIT(A) is accordingly upheld, dismissing the assessee s Grounds 1.1 to 1.4. Needless to add, there has accordingly been no examination of the assessee s objections qua service of the said notice on merits, and this order may not be construed as expressing any opinion thereon. Without prejudice to the foregoing, the concomitant of non-service or an invalid service of notice u/s. 148, assuming an objection/s in its regard could be validly raised, is a set aside to the stage of the said service for framing the assessment pursuant thereto, for which the time limit shall run from the date of the service (s. 153(2)). The same renders the controversy as to the applicability of s. 292BB qua the impugned assessment as of little consequence. The plethora of materials brought on record by the Revenue, which are also saved by the presumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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