TMI Blog2019 (10) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee : Shri I. Kamasastry FCA. For the Department : Smt. Suman Malik Sr.DR ORDER PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER These appeals by the different assessees are directed against the separate orders of Commissioner of Income Tax (Appeals), Visakhapatnam, both dated 28/06/2013 for the Assessment Year 2005-06. Since the facts in all the appeals are identical, clubbed and heard together and disposed of by way of this consolidated order. 2. In both the appeals, the assessees have raised additional grounds with regard to validity of assessment framed u/sec. 143(3) r.w.s. 147 and also issuance of notice u/sec. 148 of the Income Tax Act, 1961. The additional grounds raised by the assessees during the appeal hearing read as under:- 1. The assessment order is passed u/sec. 143(3) whereas the order ought to have been passed u/sec. 143(3) r.w.s. 147. 2. The notice issued u/sec. 148 is invalid because the approval/ sanction of the higher authority as mandated by section 151 is not obtained and therefore the assessment order is invalid. (The relevant paragraphs for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional ground challenging the order of the Assessing Officer stating that the assessment was completed without issuing notice the u/sec. 143(2), therefore, reassessment completed u/sec. 143(3) r.w.s. 147 is invalid and required to be quashed. The ld.AR submitted that the additional grounds could not be raised before the ld. CIT(A) due to in advertence and non-supply of information by the Assessing Officer in spite of specific requests made by the assessee. The ld.AR further submitted that in the instant case the Assessing Officer has not served the notice u/sec.143(2) on the assessee and the assessment was made without the service of notice, therefore the additional ground is raised for adjudication. As per Income-tax Act, notice u/sec. 143(2) required to be served within the period of six months from the end of the financial year in which the return was furnished. In this case, time limit for issuance of notice u/sec. 143(2) got expired on 30/09/2011. Since the Assessing Officer had completed the assessment without service of notice, the ld.AR argued that the additional ground raised goes to the root of the assessment and the validity of assessment framed u/sec. 143(3) is questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt of Delhi in the case of Pr.Commissioner of Income Tax Anr Vs. Silver Line Anr (2016) 383 ITR 0455 (Delhi) (v) Hon ble High Court of Madras in the case of Commissioner of Income Tax Vs. Gitsons Engineering Co. (2015) 231 Taxman 0506 (Madras) (vi) Hon ble High Court of Gujarat in the case of Principal Commissioner of Income Tax Vs. Nexus Software Ltd. (2017) 248 Taxman 0243 (Gujarat) 13. On the other hand, ld.DR supported the orders of the authorities below and submitted that the notice was issued on 22/08/2011 fixing the case for hearing on 30/08/2011 and there was no response from the assessee, hence, the notice u/sec. 142(1) was issued subsequently. The assessee also participated in the assessment proceedings. Therefore argued that the assessee s case is squarely covered by the provisions of section 292BB of the Act and also on the decision of the Hon'ble Apex Court in the case of CIT Vs. Laxman Das Khandelwal in Civil Appeal Nos. 6261 6262/2019 dated 13/08/2019. Hence requested to uphold the validity of the assessment framed u/sec. 143(3) and dismiss the appeal of the assessee. 14. We have heard bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned as 22/08/2017. Even if we presume that there was a mistake in mentioning the date of despatch on the notice, there is no evidence placed before us for despatch of the notice on 22/08/2011. On perusal of the assessment records, there is no entry with regard to issue of notice u/sec. 143(2) in the order sheet. The Assessing Officer also did not mention anywhere in the assessment order regarding the issuance of notice u/sec. 143(2). In the assessment order the Assessing Officer mentioned only the issue of notice u/sec. 142(1) dated 17/10/2011 which is also supported by the entries in the order sheet. Therefore, it is established beyond the doubt that no notice u/sec. 143(2) was issued to the assessee. 15.1 The Ld.AR relied on the decision of Hon ble Gujarat High court in the case of Kanubhai M. Patel (HUF).v. Hiren Bhatt or His Successors to Office, [2011] 12 taxmann.com 198 (Gujarat) wherein Hon'ble High Court while deciding the issue of notice u/s 148 held that the date of issue of notice to be reckoned from the date of dispatch of notice or the date of presentation of notice in the post office. The relevant part of the order of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 2008 w.e.f. 01.04.2008. So, the new provision is applicable for the assessment year 2008-09 and certainly not applicable for the assessment year under consideration i.e. 2007-08. 15.3 The assessee relied on the decision of Commissioner of Income-tax, Chennai.v. Gitsons Engineering Co., [2015] 53 taxmann.com 108 (Madras), in the cited case Hon ble Madras High court placing reliance Hon ble apex court s decision in the case of Hote Blue moon [2010] 321 ITR 362/188 Taxman 113, held that it is mandatory requirement of service of the notice for completion of assessment. The Honble Madras High court also considered the issue of dispatch and the service of notice and held as under: 5. The word shall employed in Section 143(2) of the Act contemplates that the Assessing Officer should issue notice to the assessee so as to ensure that the assessee has not understated income or has not computed excessive loss or has not underpaid the tax in any manner. It is, therefore, clear that when the Assessing Officer considers it necessary and expedient to ensure that the tax is paid in accordance with law, he should call upon the assessee to produce evidence b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... squarely covered by the decision of Hon'ble Madras High Court in the case of Gitsons Engineering Company (supra). 15.5 The coordinate Bench of ITAT, Bangalore in Assistant Commissioner of Income-tax, Central Circle 1 (1), Bangalore. v. Ashed Properties Investments (P.) Ltd., [2015] 62 taxmann.com 340 (Bangalore - Trib.) has considered the similar issue in great detail and held that Where no notice under section 143(2) was issued within period of limitation, revenue could not take advantage of provisions of section 292BBof the act. For the sake of clarity we reproduce hereunder the relevant part of the order of the ITAT which reads asunder:- 13. We have given a very careful consideration to the rival submissions. From the narration of the factual details as given above, it is clear that the only notice issued u/s. 143(2) was dated 13.10.2011 and the same was beyond the period contemplated under proviso to sec. 143(2)(ii) of the Act. Two questions arise for our consideration; (i) Whether notice u/s. 143(2) of the Act is mandatory before completion of proceedings u/s. 147 of the Act? (ii) Whether provisions of section 292BB of the Act will com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation are to be strictly construed. An illuminating reference to this aspect can be found in the following observation of the Supreme Court in the case of K. M. Sharma v. ITO (supra). A fiscal statute more particularly a provision such as the present one regulating period of limitation must received strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigants for an indefinite period on future unforeseen events. If limitations are not followed strictly, chaotic situation would follow. 40. In the light of the analysis of the relevant provisions of law and judicial precedents, we are of the considered view that the return filed pursuant to notice under s. 148 of the Act must be assumed and treated to be a return filed under s. 139 of the Act and the assessment must thereafter be made under s. 143 or 144 of the Act after complying with all the mandatory provisions. Accordingly, it is incumbent upon the assessing authority to issue notice under s. 143 (2) of the Act within the period as stipulated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation: For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. The two provisos in sub-section (1) to section 148 has been inserted with retrospective effect from 1st October, 1991. The gist of the two provisos may suitably be stated thus - Where a return has been furnished daring the period commencing on 1st October, 1991 and ending on 30th September, 2005, in response to a notice of reassessment served under section 148, and subsequently a notice has been served under section 143(2) [or 143(2)(ii), as the case may be] after the expiry of twelve months as specified in the relevant proviso but before the expiry of the time-limit for making the assessment, reassessment or re-computation as specified in section 153(2), such (otherwise time-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered under the ambit of section 292BB of the Act. The decision of the Tribunal in the case of Amithi Software Technologies (P.) Ltd. (supra) referred to in the earlier part of this order clearly supports the plea of the assessee in this regard. We therefore hold that assessment proceedings are invalid for the reason that notice u/s. 143(2) had not been issued and served within the time limit prescribed by those provisions. Accordingly, the order of assessment is annulled. In view of the conclusions on the preliminary issue raised in the Cross Objection, we are of the view that there is necessity to go into the merits on the issues raised by the Revenue in its appeal. From the facts discussed above, in the instant case there is no evidence of issue of notice u/s 143(2) and the facts of the case is squarely covered by the case laws discussed above. Therefore we hold that the assessment made u/sec. 143(3) r.w.s. 147 is unsustainable and void ab initio and accordingly we, annul the assessment made under section 143(3) r.w.s 147 of the act. Since we annulled the assessment order we consider it is not necessary to adjudicate the grounds raised on merit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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