TMI Blog2019 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Act is not a procedural irregularity, the same cannot be cured under section 292BB of the Act and hence, the assessment order passed without issuance of notice under section 143(2) of the Act, would be rendered invalid. The Tribunal as well as the Commissioner (Appeals), therefore, did not commit any error in holding that the notice issued prior to the filing of the return of income was invalid and that, in absence of a valid notice under section 143(2) of the Act, the assessment order was rendered invalid. - Decided in favour of assessee - R/TAX APPEAL NO. 1374 of 2018 - - - Dated:- 4-2-2019 - MS HARSHA DEVANI AND DR A. P. THAKER, JJ. For The PETITIONER (s) : MR M.R. BHATT, SENIOR ADVOCATE WITH MRS MAUNA M BHATT (174) For The RESPONDENT (s) : MR SN DIVATIA (1378) ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this appeal under section 260A of the Incometax Act, 1961 (hereinafter referred to as the Act ), the appellant has called in question the order dated 14.02.2018 made by the Income Tax Appellate Tribunal, Ahmedabad A Bench in I.T.A. No.1506/AHD/2014 (hereinafter referred to as the Tribunal ) by proposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g from the record, the Commissioner (Appeals) was of the view that the notice under section 143(2) of the Act, having been issued prior to the filing of the return of income, was invalid. He, accordingly, held that the assessment having been completed without issuance of a valid notice under section 143(2) of the Act is invalid, and consequently, quashed the assessment order. 6. The Revenue carried the matter in appeal before the Tribunal, which, agreed with the view adopted by the Commissioner (Appeals) and dismissed the appeal. 7. Mrs. Mauna Bhatt, learned Senior Standing Counsel, submitted that the assessee had duly participated in the proceedings and in view of the provisions of section 292BB of the Act, it is deemed that the assessee was duly served with the notice under section 143(2) of the Act and, therefore, the Tribunal was not justified in confirming the order passed by the Commissioner (Appeals) holding that the assessment order was invalid on the ground that the notice under section 143(2) of the Act was issued prior to the filing of the return of income. 7.1 Reliance was placed upon the decision of the Punjab and Haryana High Court in case of Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defective service of notice, participated in the proceedings. The court noticed that the said case was a case of defect in issuance of notice and not service of notice and accordingly, set aside the impugned notice. 8.1 It was submitted that the present case stands on a stronger footing inasmuch as this is not a case where there is any defect in the issuance of notice but a case where no notice has been issued at all. 8.2 Reliance was placed upon the decision of the Calcutta High Court in the case of Principal Commissioner of Incometax v. Oberoi Hotels (P.) Ltd ., (2018) 96 taxmann.com 104 (Calcutta) wherein, the court observed that even if section 292BB of the Act does not carry a nonobstante clause, since it is a provision of general application, it would be applicable in all situations; but only insofar as it proclaims to operate. Section 292BB of the Act, read in the context of several provisions of the Act which mandatorily require notices to be issued in diverse situations, cannot be said to have dispensed with the issuance of such notices altogether. Section 292BB must be understood to cure any defect in the service of notice and not authorize the dispensation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where the service of notice is defective but, a case where no notice under section 143(2) of the Act has been issued to the assessee after the filing of the return of income. The Commissioner (Appeals) as well as the Tribunal were, therefore, wholly justified in holding that in absence of notice under section 143(2) of the Act, the assessment order is rendered invalid. It was urged that the appeal, being devoid of merits, deserves to be dismissed at the threshold as it does not give rise to any question of law. 9. In the light of the submissions advanced by the learned advocates for the respective parties the court is of the view that the matter requires consideration. Hence, Admit . The following substantial question of law arises for consideration; Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was justified in treating the assessment as invalid on the ground that no notice under section 143(2) of the Income Tax Act, 1961 had been issued after the assessee filed the return of income? 10. The facts are not in dispute. The Assessing Officer initially issued notice under section 148 of the Act on 20.03.2009, seeking to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads thus: 143. Assessment ( 1) xxxxxx ( 2) Where a return has been furnished under section 139, or in response to a notice under subsection ( 1) of section 142, the Assessing Officer shall,- (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance 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 whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58BC( b) which is the material provision which requires our consideration. Section 158BC( b) provides for enquiry and assessment. The said provision reads that: 158BC. (b) the assessing officer shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of section 142, subsections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply; An analysis of this subsection indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under sections 143(2)/142 and complete the assessment under section 143(3). This section does not provide for accepting the return as provided under section 143(1)(a). The assessing officer has to complete the assessment under section 143(3) only. In case of default in not filing the return or not complying with the notice under sections 143(2)/142, the assessing officer is authorized to complete the assessment ex parte under section 144. 22. Clause (b) of section 158BC by referring to sections 143(2) and (3) would appear to imply that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinabove. A perusal of the above circular indicates that if an assessee, after furnishing the return of income, does not receive a notice under section 143(2) of the Act from the Department within the prescribed period, then he can take it that the return filed by him has become final and no scrutiny proceedings could be started in respect of that return. This is the kind of significance that has been attached to a notice under section 143(2) of the Act by the Central Board of Direct Taxes itself. 22. Section 292BB of the Act provides for a deeming provision that any notice under any provision of the Act, which is required to be served upon the assessee, has been duly served upon him in time, in accordance with the provisions of the Act. In the opinion of this Court, this section would be applicable where a notice has, in fact, been issued and a contention is raised that such notice has not been served upon the assessee or has not been served in time or has not been served properly, namely, where there is a defect in the service of notice. This provision does not apply to a case where no notice has been issued at all. In the facts of the present case, at the cost of repetition, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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