TMI Blog2021 (2) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. DR is that the office copy of the said notice was duly signed by the AO. This notice issued u/s. 148 is a manual notice and not a digital document. The digital document only does not require signature. A manual notice u/s. 148 is required to be dated and duly signed by the Officer who is issuing the same. A notice or an order without having signature of the person who issued such notice loses its relevance and importance and is to be treated as invalid. An order or notice without signature is not an order for execution or implementation. In all these cases, there was no signature of the AO who issued notice u/s. 148. Therefore, it has to be construed that no notice was issued by the AO to the assessee and the assessee was continuously objecting for the same. It is also a fact that from the assessment order it is found that it is an ex parte order u/s. 144 r.w.s 147 of the Act without participation of the assessee and the provisions of section 292BB of the Act is of no help to the assessee, which suggests that if the assessee cooperated in the proceedings of assessment, the assessee cannot raise objections in further proceedings. In our opinion, service of vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri H. Guruswamy, ITP For the Revenue : Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru. ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER These are cross appeals filed by three different assesses and the revenue against the separate orders of the CIT(Appeals)-4, Bangalore, all dated 29th March, 2016 relating to common assessment year 2007-08. 2. Since the grounds of appeal raised by all the assesses are common, with the only change in figures; for the sake of brevity, we reproduce the grounds of appeal raised in ITA No.1175/Bang/2016 as under:- 1. The Appellate order dt: 29-03-2106 passed by the Ld. CIT(A) Bangalore-4 is opposed to law, facts and circumstances of the case in so far as it is against to the Appellant. 2. The Ld. CIT(A) has erred in holding that the un-signed notice u/s. 148 of the Act dt: 22-03-2012 as valid without appreciating the fact that the said notice did not bear the signature of the Authority (AO). 3. The Ld. CIT(A) has erred in holding that the un-signed notice u/s. 148 of the Act dt: 22-03-2012 as valid placing reliance on the provision of section 282A of the Act without appreciating the fact that the said provision was applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the case of M/s Vector Shipping has been distinguished in the case of Ryatar Sahakari Sakkare Karkhane in ITA No 100111 100120/2015 dated 26.02.2016. 4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored 5. The appellant craves leave to add, alter, amend and/or delete any of the grounds that may be urged. 4. The revenue has also raised common additional ground of appeal common for all the years, which is as follows:- The additional grounds of appeal to be filed in this case is, 1. The learned Hon'ble CIT(A) has erred in deleting the additions made u/s 40a(ia) of the Act, without appreciating the applicability of Sec.194C with respect to the expense made by the assessee. 1.1. In absence of definition in I.T Act, 1961, on what is contract, the definition in the General Clause Act/ dictionary meaning stands valid. Hence the contract could be an oral or a written contract. Further, the assessee's claim on such payment being a direct manufacturing expenditure without furnishing any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of the objections so filed abandoned the proceedings initiated u/s. 154 of the Act. 10. Further, a notice u/s. 148 of the Act was issued on 22-03-2012 on the basis of the Explanation-(2)(c) to Section 147 of the Act and further stated that the said notice was received by the Assessee on 23-03-2012, but no Revised return or any reply to the notice was filed. 11. The assessee submitted that the AO is not entitled either to review or to cause Inspection of the Records in respect of the completed Assessments except with the directions of the higher Administrative Authorities or Appellate Authorities. The AO is also not entitled to sit on Judgment of the Assessment already completed by his predecessor in accordance with the law. The AO has not mentioned in the Assessment Order the actual cause for initiating the Rectification/Re-assessment Proceedings except vaguely stating that the remedial action was initiated after the Inspection of the Assessment Records. The AO did not have the cause of action for the alleged Inspection of the Assessment Records which is not the normal practice of the Department. Therefore, the assessee submitted that the reasons mentioned in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act is not sustainable in law and is liable to be cancelled. Change of opinion 15. Without prejudice to the above, it was submitted that the reassessment proceedings were initiated after dropping rectification proceedings without any change new material that came to the knowledge of AO and therefore it was merely on the basis of change of opinion and AO was not justified in the reassessment proceedings by invoking Explanation (2)(c) to section 147 of the Act. 16. Reliance was placed upon the Hon'ble Gujarat High Court in the case of VXL India Limited V/s. ACIT (1995) 215 ITR 295 and Birla VXL Limited V/s. ACIT (1996) 217 ITR 1 (Guj) wherein it was held that howsoever wide the scope for taking action u/s. 147 r.w.s 148 of the Act, it does not confer jurisdiction on change of opinion on the interpretation of a particular provision earlier adopted by the Assessing Officer. The scope of Section 147 is not for reviewing its earlier Order Suo-moto irrespective of there being any material to come to a different conclusion. 17. Further the assessee placed reliance on the Hon'ble Delhi High Court in the case of Jindal Photo Films Limited V/s. DCIT ( 1998) 234 ITR 171 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion cannot be the ground for reopening the case u/s. 147 of the Act (2010) 320 ITR 561 (SC). In CIT and Another V/s. Foramer France , it was held that the Re-Assessment Proceedings were not maintainable on the basis mere change of opinion. (2003) 264 ITR 566 (SC). The ITAT Bangalore Bench in its order in ITA No. 1006/Bang/2010 dt: 31-10-2011 in the case of M/s GMR Holdings Pvt Ltd., V/s. DCIT, Circle 11(3) has followed the decision of the Hon'ble Supreme Court in the case of CIT and Another V/s. Foramer France (s upra ). Similarly the Hon'ble High Court of Karnataka vide judgment dt: 16-2-2016 in the case of CIT V/s. M/s Chaitanya Properties Ltd. in ITA No. 205 of 2015 has held that initiation of RE-Assessment Proceedings merely on change of opinion were not proper. 21. However, the AO rejected the contentions of the assessee. Rectification u/s. 154 and Re-assessment Proceedings u/s. 147 of the Act based on Audit Objection 22. The AO in the Assessment Order has stated that on finding the mistakes of non-disallowance of expenditure of Labour Charges for failure to deduct the tax u/s. 194C of the Act, a notice u/s. 154 of the Act was issued giving an opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessee had not participated in the reassessment proceedings and taking the non-appearance as a ground, the AO disallowed the labour charges and non-deduction of TDS by making an addition of ₹ 9,97,920 u/s 40A(3) of the Act without appreciating the facts and circumstances of the case considered by the AO who completed the original assessment. 26. The assessee submitted that the entire gamut of exercise of initiation of remedial action by way of Rectification u/s. 154 and Re-assessment proceedings under Explanation-2(c) to Section 147 of the Act was based on an uncalled for Audit Objection. The matter was discussed and deliberated in the Rectification Proceedings and therefore, the Rectification Proceedings were dropped. During the course Rectification Proceedings it was brought to the notice of the assessee that the said Rectification Proceedings were initiated on the basis of an Audit Objection. In this regard, the assessee submitted that the Audit Objection does not confer jurisdiction u/s. 147 of the Act as has been held in the catena of Judgments both of the Hon'ble Supreme Court as well as other High Court decisions that the Audit Objection does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard, the Appellant submitted that the Labour - charges were not paid to any Contractor in pursuance of any contract as required u/s. 194C of the Act and hence, there was no requirement of deduction of tax at source. The Hon'ble Supreme Court in the case of Associated Cement Company Limited V/s. CIT (1993) 201 ITR 435 has held that Section 194C(1) had a wide import and covered any work which could be got carried through a Contractor under a Contract . In this view of the matter, it was submitted that it is a settled position of law as laid by the Hon'ble Supreme Court that the deduction of TDS arises only in respect of payments made to a Contractor under a Contract. The essential requirement of Section 194C is that the payment ought to have been made to a contractor under a Contract. In this case, the assessee has not entered into any contract with any Contractor in respect of the Labour Charges paid as wages for the work carried out by the Labourers. There was no contractual obligation for the Appellant Firm to get the work done and therefore provisions of section 194C were not applicable. 28. Without prejudice to the above, the assessee submitted that the lab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in accordance with the law and therefore such findings are to be set aside. However, the CIT(Appeals) confirmed the action of the AO. 33. Now the arguments of the assessee before us is primarily with regard to the issue of notice u/s. 148 of the Act. In these cases, the AO had not signed the notice u/s. 148 to the assesses. As such, the reassessment framed consequent to said notice u/s. 148 r.w.s. 147 is bad in law and assessment order has to be quashed as void-ab-initio. He drew our attention to the copies of notices u/s. 148 to the assesses as follows:- (i) Yashoda Electricals : Notice u/s. 148 dated 22.3.2012. (ii) Star Electricals : Notice u/s. 148 dated 22.3.2012 (iii) Maruthi Electricals : Notice u/s. 148 dated 22.3.2012 34. The ld. AR submitted that the CIT(Appeals) placed reliance on section 282A of the Act without appreciating the fact that the said provision was applicable only to Central Processing Unit (CPU) which was nominated as a designated authority. Since the present AO not being a nominated or designated authority by the CBDT as required u/s. 282A(3) of the Act, as such the CIT(Appeals) ought to have annulled all the reassessment orders as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act was typed on a plain paper, it was not signed by the Assessing Officer who issued the same and remained unsigned which is not in dispute before us. The contention of the ld. DR is that the office copy of the said notice was duly signed by the AO. This notice issued u/s. 148 is a manual notice and not a digital document. The digital document only does not require signature. A manual notice u/s. 148 is required to be dated and duly signed by the Officer who is issuing the same. A notice or an order without having signature of the person who issued such notice loses its relevance and importance and is to be treated as invalid. An order or notice without signature is not an order for execution or implementation. In all these cases, there was no signature of the AO who issued notice u/s. 148 of the Act. Therefore, it has to be construed that no notice was issued by the AO to the assessee and the assessee was continuously objecting for the same. It is also a fact that from the assessment order it is found that it is an ex parte order u/s. 144 r.w.s 147 of the Act without participation of the assessee and the provisions of section 292BB of the Act is of no help to the assessee, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 148 Dated 26.03.2007 is available at page-1 of the paper book. It is unsigned as well as did not mention any assessment year. Since unsigned notice have been sent to the assessee, therefore, it vitiate the entire re-assessment proceedings because it was the jurisdictional notice to initiate proceedings under section 147 of the I.T. Act, 1961. Since the notice itself was illegal and bad in Law, therefore, entire re-assessment proceedings have been vitiated and as such A.O. could not have assume the jurisdiction under section 148 of the I.T. Act, 1961 to frame the assessment against the assessee. The Ld. CIT(A) was justified in holding the assessment order to be null and void. The Departmental Appeal has no merit and the same is accordingly dismissed. 39. Further, as already observed, the provisions of section 282A of the Act is of no assistance to the department and it would be applicable only to a CPU which was nominated as designated authority by CBDT as required u/s. 282A of the Act. Therefore, we are of the opinion that the assessment framed on the basis of unsigned notice u/s. 148 is bad in law and cannot be sustained in the eyes of law. Accordingly, we quash a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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