TMI Blog2018 (11) TMI 1702X X X X Extracts X X X X X X X X Extracts X X X X ..... same. The provisions of section 147 do not give unfettered powers to reopen the assessment and the AO is required to satisfy the pre-conditions as given in the said section, which is lacking in the present case. For this, there are several decisions of Hon ble Courts, as also cited by the assessee before the ld. CIT(A). In view of this, the reassessment u/s. 147 cannot be said to be valid. Non-issuance of notice u/s. 143(2) before passing the reassessment - The issue of notice u/s. 143(2) is mandatory in the reassessment proceedings and its failure to do so, make the re-assessment as void. It is so held also in CWT vs. HUF of HH Late Shri J.M. Scindia [ 2008 (2) TMI 53 - BOMBAY HIGH COURT] . Similar view has been taken by Hon ble Bombay High Court in another case CIT vs. Mundra Nanvati [ 2009 (7) TMI 1253 - BOMBAY HIGH COURT] . In view of this, the impugned re-assessment deserves to be held as void. Reopening of assessment u/s. 147/148 itself is held invalid on legal aspects of this case - Decided in favour of assessee - ITA No. 6199/Del/2014 - - - Dated:- 5-11-2018 - Shri H.S. Sidhu, Judicial Member And Shri L.P. Sahu, Accountant Member For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sales Tax Search and subsequent Assessment Order in case of the Assessee have been set aside by the Hon'ble Delhi High Court vide Order dated 23.02.2007, much prior to the issue of Sec. 148 Notice and thus there was no reason to believe for reopening the assessment after 4 years, and is a mere change of opinion . 2. In order to admit these additional grounds, it is stated on behalf of the assessee that these grounds are purely legal in nature and go to the root of the matter and therefore, the same may be admitted in view of decision of Hon ble Supreme Court in National Thermal Power Corporation Limited vs. CIT, 229 ITR 383 (SC) and CIT vs. Varas International (P) Ltd., 284 ITR 80 (SC), where it has been held that the question of law or the grounds legal in nature can be raised at any stage of proceedings. The ld. DR failed to offer any plausible objection to the contention of the assessee. We, therefore, considering the nature of these additional grounds, being legal and adhering to the aforesaid decisions of Hon ble Apex Court, admit these grounds for consideration. 3. The brief facts of the case are that the assessee-company is engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of belief are based on mere survey report of Delhi Sales Tax Department, and the action taken by Sales Tax Department on the basis of same survey stood quashed by higher authorities of said department, meaning thereby, the information was not complete to form a belief of escapement of income. (iii). The information wrongly taken as tangible material for formation of belief of escapement of income without considering the other related information, i.e., order of VTO based on the same information and appeal order of Special Commissioner II, which were brought to the notice of Assessing Officer that the assessments made by the Sales Tax Department on the basis of said survey /information stood quashed by various orders of their higher authorities. 5.1 Apart from the above, the ld. AR relied on the submissions made before the authorities below and various decision cited before the ld. CIT(A). He has also filed a small paper book of 15 pages, inter alia, containing the reasons recorded , order of Hon ble Delhi High court dated 23.02.2007 quashing the exparte order of VTO dated 08.03.2006, assessment order of VTO dated 29.01.2008 based on the survey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.02.2007: Writ petition of the assessee stood disposed of by Hon ble Delhi High Court quashing the exparte order dated 08.03.2006. 29.01.2008: Assessment order in pursuance to Survey dated 11.05.2006 was passed by VAT Officer, creating a demand of ₹ 1,04,37,563/-. The VTO found that numbers of cars sold by the assessee as per audited balance sheet were found 1872 as shown by the assessee. The VTO, however, held that the difference between the price of cars sold and price shown remains of ₹ 3,82,55,045/- which was taxed under the Delhi Sales Tax Act. 30.12.2010: The assessment order dated 29.01.2008 was set aside by the Appellate Authority(Special Commissioner-II, Trade Taxes Deptt.) and reduced the difference by ₹ 2,73,14,588/- on account of cancelled and double invoices of the same cars and worked out the total difference in sales of ₹ 1,09,40,457/- and the matter was remitted to the AO for making fresh assessment on the basis of actual material/evidences, which could not be produced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any efforts to make any verification or application of his mind on the same. The provisions of section 147 do not give unfettered powers to reopen the assessment and the AO is required to satisfy the pre-conditions as given in the said section, which is lacking in the present case. For this, there are several decisions of Hon ble Courts, as also cited by the assessee before the ld. CIT(A). In view of this, the reassessment u/s. 147 cannot be said to be valid. 9. Adverting to the next legal contention of the assessee regarding non-issuance of notice u/s. 143(2) before passing the reassessment, a perusal of the impugned order shows that the ld. CIT(A) though has categorically recorded that issuance of notice u/s. 143(2) is sine qua non, which was not issued to the assessee in the instant case, yet we find that even after recording such a finding, the ld. CIT(A) has not addressed on the validity of reassessment on this score, despite finding that no copy of notice u/s. 143(2) was found in assessment record nor was there any evidence to dispatch any such notice. The ld. CIT(A), however, without deciding this legal issue challenging the validity of reopening proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 1 (Del.) has held that service of notice under Section 143(2) is mandatory. It is not disputed that in respect of the proceedings under Section 147 of the act, notice under Section 143(2) is required and is mandated except in cases covered by the first and second proviso to Section 148 of the Act. The present case is not covered by the exceptions carved out in the two provisos as the return in the present case filed on or after 1 st October, 2005. In the case of Assistant Commissioner of Income Tax and Another vs. Hotel Blue Moon (2010) 321 ITR 362 (SC), the Supreme Court had examined the question of mandate and necessity to issue notice under Section 143(2) of the Act, in the case of block assessment proceedings and it was observed as under: The other important feature that requires to be noticed is that Section 158-BC(b) specifically refers to some of the provisions of the Act which requires to be followed by the assessing officer while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This section even speaks of sub-sections which are to be followed by the assessing officer. Had the intention of the leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple of estoppel under section 292BB would therefore, not apply. In these circumstances, the Assistant Director could not rely upon the main section 292BB and claim that notice under section 143(2) was deemed to be served within the stipulated time. In view of this position, there was no reason why reassessment proceedings should continue as no notice under section 143(2) of the Act was served on the assessee within the stipulated time. The assessment proceedings pursuant to the notices under section 148 of the Act were to be quashed and the Assistant Director was to issue a no objection certificate to the petitioner as required by the Reserve Bank of India. 10. In view of the above, we are of the opinion that on the facts of the assessee s case, the decision of Hon'ble Jurisdictional High Court in the case of Alpine Electronics Asia Pte. Ltd. (supra) and V.R. Educational Trust (supra) would be applicable. Respectfully following the same, we hold that the assessment completed without issue of notice under Section 143(2) of the Act was invalid. The same is quashed and consequentially, the assessment order passed in pursuance thereto is also cancelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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