TMI Blog2022 (4) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued under section 143(2) was not properly served on the assessee. Since it is a case of non-issuance of notice within the prescribed time under section 143(2), therefore, the initiation of scrutiny proceedings itself was without jurisdiction conferred by the provisions of section 143 - See M/S. TRAVANCORE DIAGNOSTICS (P) LTD [ 2016 (11) TMI 76 - KERALA HIGH COURT] Thus when the AO has passed the assessment order without properly issuing notice as prescribed under section 143(2), then the assessment order is not sustainable in law and the same is invalid - Appeal of assessee allowed. - ITA No. 501/JP/2015 - - - Dated:- 12-4-2022 - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Hanif Khan (CA) For the Revenue : Smt. Manisha Choudhary (JCIT) ORDER PER SANDEEP GOSAIN, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-3, Jaipur dated 20.03.2015 for the assessment year 2007-08. The assessee has raised the following grounds of appeal :- 1. Under the facts and circumstances of the case, the ld. CIT (A) has grossly erred in sustaining the action of ld. AO of passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has contended that order under section 143(3) was passed without any authority as also that notice issued u/s 143(2) was not valid and the entire assessment proceedings was void ab initio. Since the ground raised by the assessee is legal in nature and goes to the root of the matter, therefore, we first propose to take ground no 1 raised by the assessee. 2. Briefly the facts of the case are that the assessee is a manufacturer and exporter of handmade papers. The assessee filed its return of income for the A.Y. 2007-08 on 31.03.2008. It was a belated return filed under section 139(4) of the I.T. Act, 1961 i.e. filed beyond the due date of filing return of income under section 139(1) of the IT Act for the A.Y. 2007-08 which was 31.10.2007 declaring Nil income. Inadvertently same return of income was again resubmitted on 01.04.2008 without any correction and changes by the accounting staff of the assessee which was not a valid one since the assessee is not allowed to revise/amend any return filed u/s 139(4) of the IT Act, 1961. 2.1. The A.O. issued notice u/s 143(2) of the Act for the assessment year 2007-08 on 28.08.2009 which was served on the assessee on 02.09.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Hon ble Supreme Court in the case of NTPC vs. CIT 229 ITR 383 (SC) and submitted that the Hon ble Supreme Court has discussed the power of the Tribunal in entertaining the fresh plea at this stage which does not require any new facts or investigation of any fact for adjudication and, therefore, a legal issue can be raised before the Tribunal for first time so long as the relevant facts are on record in respect of that item. 4. On the other hand, the ld. D/R has objected to the admission of this ground and submitted that the assessee did not raise this issue before the authorities below and after the AO as well as the ld. CIT (A) have decided the matter against the assessee, the assessee has first time raised this ground without explaining the reasons as to why the same was not raised before the authorities below, therefore, the same cannot be accepted at this stage. He has relied upon the orders of the authorities below. 5. We have heard the rival submissions and perused the material available on record. We do not agree with this contention of the ld. D/R because in the case in hand what is absent is the issuance of notice under section 143(2) within the period of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or to produce or cause to be produced any evidence on which the assessee may rely in support of the return. [Provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished] The ld. A/R therefore, submitted that from the plain reading of the above provisions, it can be clearly understood that notice under section 143(2) has to be mandatorily issued within the time limit prescribed under the Income Tax Act. The ld. A/R placed reliance on the decision of Hon ble Allahabad High Court in the case of CIT vs. Salarpur Cold Storage (Pvt.) Ltd. (2015) 228 Taxman 48 (Allahabad) wherein the Hon ble High Court held that Notice issued beyond specified period. The AO issued notice u/s 143(2) of the IT Act, 1961 on 06.10.2009 which was beyond period prescribed under section 143(2) of the Act which was till 30.09.2009. Although the assessee had co-operated with proceedings but section 292BB of the Act would not save a situation where the notice itself had not been issued before the expiry of the period of limitation since it could only cure a defect of service within the stipulated p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for enquiry and assessment. The said provision reads that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, subsection (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply. An analysis of this sub section 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(i)(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. Clause (b) of Section 158 BC by referring to Section 143(2) and (3) would appear to imply that the provisions of Section 143(1) are excluded. But Section 143(2) itself becomes necessary only where it becomes necessary to check ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression So far as may be in Section 153 BC(b), the issue of notice is not mandatory but optional and are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation made by this Court in Dr. Pratap Singh's case [1985] 155 ITR 166 (SC). In this case, the Court has observed that Section 37(2) provides that the provisions of the Code relating to searches, shall so far as may be, apply to searches directed under Section 37(2). Reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in Section 165 has to be generally followed. The expression so far as may be has always been construed to mean that those provisions may be generally followed to the extent possible. The learned counsel for the respondent has brought to our notice the observations made by this Court in the case of Maganlal Vs. Jaiswal Industries, Neemach and Ors., [(1989) 4 SCC 344], wherein this Court while dealing with the scope and import of the expression as far as pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(2) within the prescribed time limit and not the service of the notice issued by the AO is disputed by the assessee. Only in the case where the notice issued under section 143(2) was disputed by the assessee on the point of service of the said notice but the fact of issuance of notice is already available on record, in such a case if the assessee has participated in the assessment proceedings in response to the notice under section 143(2), then subsequently the assessee cannot take the objection of notice issued under section 143(2) was not properly served on the assessee. Since it is a case of non-issuance of notice within the prescribed time under section 143(2), therefore, the initiation of scrutiny proceedings itself was without jurisdiction conferred by the provisions of section 143 of the Act. The Hon ble Kerala High Court in the case of Travancore Diagnostics Pvt. Ltd. vs. ACIT, 390 ITR 167 (Kerala) has dealt with the issue of validity of reassessment order passed by the AO without issuing notice under section 143(2) in para 33 34 as under :- 33. The extended question then is whether even if the assessee is deemed to have participated in the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here that the words of Rowlat, J. vide supra in paragraph 5 of this judgment assumes climataric importance because in taxation nothing is to be intended and nothing can be presumed. If a notice under Section 143(2) has not been issued, the Assessing Officer cannot claim the benefit under Section 292BB and the claim that the earlier notice extracted in paragraph 29 of the judgment was intended to be the notice issued under Section 143(2) and that substantial compliance under Section 143(2) must be inferred, cannot be countenanced. Accordingly, in view of the facts and circumstances of the case when the AO has passed the assessment order without properly issuing notice as prescribed under section 143(2), then the assessment order is not sustainable in law and the same is invalid. Hence, following the decision of the Hon ble Supreme Court as well as of the Hon ble High Courts as referred hereinabove, we quash the impugned assessment order passed by the AO as well as the order passed by the ld. CIT (A). Since we have quashed the assessment order itself, therefore, the other grounds raised by the assessee become infructuous and we do not propose to go into the other grounds. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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