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2019 (10) TMI 390

..... he order sheet for issue of notice and there is no evidence for dispatch of notice provided by the department. Hence, we hold that no notice was issued in this case u/sec. 143(2) before the due date i.e 30/09/2011 and the assessee’s case is squarely covered by the decision of Hon'ble Madras High Court in the case of Gitsons Engineering Company [2014 (11) TMI 59 - MADRAS HIGH COURT] In the instant case there is no evidence of issue of notice u/s 143(2) 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. - Decided in favour of assessee. - ITA Nos. 582/VIZ/2013, ITA Nos. 583/VIZ/2013 - 25-9-2019 - Shri V. Durga Rao, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For 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 ap .....

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..... n which was taken into possession of the department. As per this document, it was found that the assessee acknowledged the receipt of an amount of ₹ 16.00 lakhs on various dates. The Assessing Officer computed the taxable capital gains in the hands of the assessee at ₹ 22,71,733/-. 6. Against the order of the Assessing Officer, the assessee went on appeal to the ld. CIT(A) and the ld. CIT(A) dismissed the appeal of the assessee. 7. Against the order of the ld. CIT(A), the assessee is in appeal before this Tribunal. 8. During the appeal hearing, the assessee has raised additional 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 .....

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..... g case laws : (i) Hon ble High Court of Gujarat in the case of Kanubhai M. Patel (HUF) Vs. Hiren Bhatt or his successors to office & others (2011) 334 ITR 0025 (ii) Hon ble High Court of Allahabad in the case of Commissioner of Income Tax Vs. Mohammad Khaleeq Commercial Taxes (2015) 229 Taxman 0566 (Allahabad) (iii) Hon ble High Court of Delhi in the case of Commissioner of Income Tax Vs. Chetan Gupta (2016) 382 ITR 0613 (Delhi) (iv) Hon ble High Court 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. Theref .....

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..... e complete absence of notice. For application of section 292BB, the notice must have been emanated from the department. In the instant case, on filing the affidavit by the assessee for non service of notice, we have called for the records and verified the same. Though there was a notice u/s 143(2) dated 22/08/2011 available in the assessment records, on the notice despatch date was 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. Pa .....

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..... on 143 (2) of the Act within the stipulated period, he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. The Hon ble high court further held that the provision of Section 292BB of the Act has been inserted by the Finance Act, 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 h .....

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..... patch of notice provided by the department. Hence, we hold that no notice was issued in this case u/sec. 143(2) before the due date i.e 30/09/2011 and the assessee s case is 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 .....

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..... We may here clarify that provisions of 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 the proviso thereunder. In th .....

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..... d 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-barred) notice shall be deemed to be a valid notice. Further, the new Explanation inserted with effect from 1st October, 2005, specifically clarifies that the aforestated (newly inserted) provisos shall not apply to any return w .....

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..... is 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 merits. Thus, the appeal filed by the assessee is allowed. ITA No.583/VIZ/2013- B.Nageswari 16. The facts of the case are identical to the case of Shri B.S.Subba Rao in ITA No.582/viz/2013 discussed above in this order. Since the facts are identical respectfully following th .....

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