Sh. Parvinder Vir Hans, Jalandhar V. The Assistant Commissioner of Income tax, Jalandhar

CO 4/ASR/2011

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2039 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 9 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SHARDA
• Assessee Lawyers: J S BHASIN
• Keywords: Invalid notice; Loose papers; Non compliance; Procedural lapse; Block assessment; Reassessment proceedings
• Section: 143(3); 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.88(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN: AAEPH8552Q ASSTT. COMMR. OF INCOME TAX, VS. SH. PARVINDER VIR HANS, CIRCLE-IV, JALANDHAR. PROP. M/S. ZOLOTO MALLEABLE S, JALANDHAR. (APPELLANT) (RESPONDENT) C.O. NO.04(ASR)/2011 (ARISING OUT OF ITA NO.88(ASR)/2011) ASSESSMENT YEAR:2007-08 PAN: AAEPH8552Q SH. PARVINDER VIR HANS, VS. ASSTT. COMMR. O F INCOME TAX, PROP. M/S. ZOLOTO MALLEABLES, CIRCLE-IV, JALANDHAR . JALANDHAR. (APPELLANT) (RESPONDENT) ITA NO.247(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN: AAAFZ0521B ASSTT. COMMR. OF INCOME TAX, VS. M/S. ZOLOTO INDUS TRIES, CIRCLE-IV, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) C.O. NO.13(ASR)/2011 (ARISING OUT OF ITA NO.247(ASR)/2011) ASSESSMENT YEAR:2007-08 PAN: AAAFZ0521B M/S. ZOLOTO INDUSTRIES, VS. ASSTT. COMMR. OF INCOM E TAX, JALANDHAR. CIRCLE-IV, JALANDHAR. (APPELLANT) (RESPONDENT) ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 2 DEPARTMENT BY: SH.R.K.SHARDA, DR ASSESSEE BY: SH. J.S. BHASIN, ADVOCATE DATE OF HEARING: 20/01/2016 DATE OF PRONOUNCEMENT: 01/02/2016 ORDER PER A.D. JAIN, JM: THESE ARE THE DEPARTMENTS APPEALS AND THE ASSESS EES CROSS OBJECTIONS FOR THE ASSESSMENT YEAR 2007-08. THE DEP ARTMENT IN ITS APPEAL HAS TAKEN THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.139 34642/- RS.694694/-, RS.6818881/- MADE BY THE AO ON ACCOUNT OF UNACCOUNTED SALES, DIFFERENCE IN CLOSING STOCK AND RAW MATERIAL CONSUMPTION RESPECTIVELY. 2. THAT WHILE ALLOWING THE RELIEF OF RS. 13934642/- RS.694694/-, RS.6818881, LD. CIT(A) HAS FAILED TO A PPRECIATE THAT THE ADDITION ON ACCOUNT OF UNACCOUNTED SALES , DIFFERENCE IN CLOSING STOCK AND RAW MATERIAL CONSUM PTION WAS MADE BY THE AO BY THOROUGHLY EXAMINING ASSESS EES TRADING/MANUFACTURING ACCOUNT ETC. ELABORATELY DISC USSING EACH AND EVERY RELEVANT ASPECT. 3. LD. CIT(A) HAS ERRED IN ALLOWING THE ABOVE RELIE F RELYING ON THE DECISION IN THE CASE OF M/S. ATAM VALVES PVT. L TD. JALANDHAR IN ITA NO. 442(ASR)/2008 AND 452(ASR)/200 8 AND HAS FAILED TO APPRECIATE THAT FACTS OF THE CASE OF M/S. ATAM VALVES PVT. LTD. (SUPRA) ARE QUITE DISTINGUISHABLE AS IN THAT CASE THE ADDITION WAS MADE ON THE BASIS OF CERTAIN LOOSE PAPERS FOUND AT THE TIME OF SURVEY U/S 133A OF THE INCOME TAX ACT, 1961. 2. IN THE ASSESSEES CROSS OBJECTIONS, THE FOLLOWIN G OBJECTIONS HAVE BEEN RAISED: 1. THAT THE LD. CIT(A) FELL INTO GRAVE ERROR IN NO T HOLDING THE IMPUGNED ORDER AS BAD IN LAW FOR NON ISSUE AND NON SERVICE ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 3 OF STATUTORY NOTICE U/S 143(2) BY THE AO HOLDING JU RISDICTION OVER THIS CASE. 2. THAT THE LD. CIT(A)S ARBITRARY OBSERVATION AND NO OBJECTION WAS RAISED WITHIN THE MEANING OF SECTION 124(3), TO REJECT THE ASSESSEES CONTENTION, IS GROSSLY MISCONCEIVED AND CONTEXTUALLY MISPLACED. 3. THAT WHILE DELETING ALL THE ADDITIONS MADE BY TH E AO, THE LD. CIT(A) SHOULD HAVE HELD THE REJECTION OF BOOKS U/S 145(3) ALSO AS BAD. 3. SINCE THEY INVOLVE A JURISDICTIONAL ISSUE, THE C ROSS OBJECTIONS OF THE ASSESSEE ARE BEING TAKEN UP FIRST. 4. APROPOS CROSS OBJECTIONS 1 & 2, IT HAS BEEN CONT ENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(A) HAS ERRED IN NOT HOLDING THE IMPUGNED ORDER AS BAD IN LAW FOR NON ISSUE AND NON SERVICE OF STATUTORY NOTICE U/S 143(2) BY THE AO HOLDING JURISDICTION OV ER THE CASE. HE FURTHER CONTENDED THAT LD. CIT(A)S OBSERVATION THAT NO OBJ ECTION WAS RAISED WITHIN THE MEANING OF SECTION 124(3) OF THE I.T. AC T TO REJECT THE ASSESSEES CONTENTION IS ALSO GROSSLY MISCONCEIVED AND CONTEXTUALLY MISPLACED. 5. THE FACTS OF THE CASE AS PER THE RECORD ARE THA T NOTICE U/S 143(2) WAS NEVER ISSUED AND SERVED BY THE AO HOLDING JURIS DICTION OVER THE CASE. EARLIER, UPTO ASSESSMENT YEAR 2005-06, THIS C ASE WAS ASSESSED WITH RANGE-1, JALANDHAR, ALONGWITH OTHER CASES OF T HIS GROUP. HOWEVER, DUE TO SHIFTING OF THE BUSINESS PREMISES, BY MARCH, 2005, OF THE MAIN FAMILY CONCERNS NAMELY ZOLOTO INDUSTRIES AND ZOLOTO VALVES P. LTD., TO ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 4 LAMBRA, NAKODAR ROAD, JALANDAR, IN WHICH THE ASSESS EE IS ALSO A MANAGING PARTNER AND A DIRECTOR, THE TERRITORIAL JU RISDICTION FELL WITH RANGE-IV. EVEN WHEN ASSESSMENT PROCEEDINGS FOR AY 2 005-06 WERE TAKEN UP BY RANGE-1, THE DISPUTE OF JURISDICTION HAD CROP PED UP, WHICH, HOWEVER, WAS RESOLVED BY THE DEPARTMENT, BY APPRIS ING THE ASSESSEE ORALLY, THAT SINCE THE SURVEY HAD BEEN CARRIED OUT BY RANGE-I, DURING THE PREVIOUS YEAR RELEVANT TO AY 2005-06 WHEN THE BUSIN ESS PREMISES WERE YET NOT SHIFTED OUT OF THE TERRITORIAL JURISDICTIO N OF RANGE-I, THE REGULAR ASSESSMENTS FOR THE SAID YEAR, I.E., AY 2005-06 WOU LD BE COMPLETED BY RANGE-I ITSELF, WHEREAFTER, THE JURISDICTION WOULD STAND TRANSFERRED TO R- IV. AS PER THIS UNDERSTANDING, IN THE NEXT YEAR, I. E., AY 2006-07, THE JURISDICTION OVER THIS CASE WAS EXERCISED BY RANGE- IV, WHEN THE ASSESSEES RETURN WAS PICKED UP FOR SCRUTINY BY THE ACIT, R-IV VIDE NOTICE DATED 14.09.2007 U/S 143(2) FOLLOWED BY QUES TIONNAIRE DATED 04.02.2008 AND FINALLY, ASSESSED BY THE JCIT, R-IV, JALANDHAR VIDE ORDERS DATED 04.12.2008 PASSED U/S 143(3). IT WAS THUS, THAT FOR ALL PURPOSES, THE JURISDICTION STOOD TRANSFERRED TO R-I V. HOWEVER, WHEN THE ASSESSEE RECEIVED A NOTICE U/S 142(1) DATED 22.07.2 009 FROM THE ACIT, R-IV, TO FILE DOCUMENTS SUPPORTING ITS RETURN FILED FOR AY 2007-08 FOR THE PURPOSE OF MAKING REGULAR ASSESSMENT, AN OBJECTION WAS TAKEN IN WRITING BY WAY OF A LETTER DATED 12.08.2009 FILED WITH THE AO, POINTING OUT THAT FOR WANT OF MANDATORY NOTICE SERVED BY HIM U/S 143( 2) WITHIN THE PRESCRIBED PERIOD, THE IMPUGNED NOTICE ISSUED U/S 1 42(1) WAS WITHOUT ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 5 JURISDICTION. THIS, HOWEVER, WAS RESPONDED TO BY TH E AO VIDE LETTER DATED 19.8.2009 INTIMATING THAT THE MANDATORY NOTICE U/S 143(2) HAD ALREADY BEEN SERVED ON 27.09.2009 (WRONGLY TYPED AS 27.9.20 09) AND ACCORDINGLY, HE REQUIRED THE ASSESSEE TO FURNISH RE QUISITE INTIMATION AS CALLED FOR VIDE HIS EARLIER LETTER DATED 22.07.2009 SUPRA. THEREAFTER, THE AO PROCEEDED IN THE MATTER AND COMPLETED THE ASSESS MENT BY PASSING THE ORDER, WHICH WAS APPEALED AGAINST BY THE ASSESS EE BEFORE THE CIT(A). 6. THE LD. CIT(A), BY VIRTUE OF THE IMPUGNED ORDER, OBSERVED AS FOLLOWS: 2.4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APP ELLANT CAREFULLY. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE APPELLANT WAS REQUESTED TO STATE AS TO WHEN THE OBJECTION TO NOTI CE U/S 143(2) ISSUED BY THE AO IN THE YEAR 2008 WAS TAKEN. IT IS THE APPELLANTS CONTENTION VIDE THE REJOINDER REPRODUCED ABOVE THAT THE DCIT, RANGE-1, JALANDHAR WAS INFORMED ON 29.08.2008 ABOUT THE ASSESSMENT OF THE ASSESSEE PENDING WITH THE ACIT, R ANGE-IV, JALANDHAR. THE NOTICE U/S 143(2) ISSUED BY THE DCIT , RANGE-1, JALANDHAR WAS DATED 23.09.2008 I.E. AFTER THE AFORE SAID LETTER FILED BY THE ASSESSEE WITH THE DCIT, RANGE-I, JALANDHAR. NO OBJECTION TO THIS NOTICE ISSUED ON 23.09.2008 WAS APPARENTLY FIL ED WITHIN 30 DAYS OF THE SERVICE OF THE NOTICE ON THE ASSESSEE. SECTION 124(3) OF THE INCOME-TAX ACT, 1961 PROHIBITS CHALLENGE TO THE JURISDICTION ASSUMED BY THE ASSESSING OFFICER BEYOND 30 DAYS AFT ER THE SERVICE OF NOTICE U/S 143(2) AND 142(1) UPON HIM. IT IS ALS O CLEAR THAT THE RETURN OF INCOME OF THE ASSESSEE WAS FILED IN THE O FFICE OF RANGE-I, JALANDHAR ON 29.10.2007, THOUGH IT IS CONTENDED THA T THE RETURN WAS INTENDED TO BE FILED IN RANGE-IV, THE FACT REMA INS THAT THE RETURN WAS SUBMITTED TO THE JURISDICTION OF RANGE-I . I AM, THEREFORE, OF THE OPINION THAT THE VALIDITY OF SERV ICE OF NOTICE BY THE DCIT, RANGE-1, JALANDHAR CANNOT BE CHALLENGED AT TH IS STAGE SINCE IT WAS NOT CHALLENGED WITHIN 30 DAYS OF SERVICE OF NOTICE UPON THE ASSESSEE. MOREOVER, IT IS NOT CLEAR AS TO HOW THE A SSESSEE IS PREJUDICED TO THE SERVICE OF THE NOTICE BY THE DCIT , RANGE-I, JALANDHAR. IT DOES APPEAR THAT THE ASSESSEE WAS EAR LIER ASSESSED WITH THE AO IN RANGE-I, JALANDHAR AND ONLY SUBSEQUE NTLY ON ACCOUNT OF SHIFTING OF THE BUSINESS PREMISES, THE A SSESSEE CLAIMS TO FALL WITHIN THE JURISDICTION OF RANGE-IV, JALAND HAR. ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 6 2.5 THE DECISION IN THE CASE OF CIT VS. CEBON INDIA LTD. (SUPRA) RELIED UPON BY THE APPELLANT IS NOT OF ASSISTANCE T O THE ASSESSEE SINCE IN THIS CASE THERE WAS NO PROOF OF SERVICE OF NOTICE U/S 143(2) UPON THE ASSESSEE, WHEREAS IN THE PRESENT CASE A NO TICE HAS BEEN ISSUED AND DULY SERVED UPON THE ASSESSEE. SIMILAR A RE THE FACTS OF CASE OF ACIT VS. HOTEL BLUE MOON (SUPRA). NOTICE U/ S 143(2) IS A PROCEDURAL REQUIREMENT AND THOUGH NO ASSESSMENT CAN BE FRAMED WITHOUT SERVICE OF NOTICE U/S 143(2) ON THE ASSESSE E WITHIN THE PRESCRIBED TIME, THE MERE FACT THAT THE NOTICE WAS ISSUED BY ANOTHER OFFICER - WHICH WAS NOT CHALLENGED BY THE A SSESSEE AS PER THE REQUIREMENT OF SECTION 124(3) OF THE ACT, WILL NOT MAKE THE ASSESSMENT NULL AND VOID. IT IS NOTED THAT THE ASSE SSEES RETURN WAS PROCESSED U/S 143(1) BY THE DCIT, RANGE-I, JALA NDHAR AND REFUND WAS ALSO ISSUED TO HIM BY THE SAID AO IN JUN E, 2009. THE HONBLE JURISDICTIONAL HIGH COURT HAVE, IN THEIR DE CISION IN THE CASE OF SUBHASH CHANDER VS. CIT 166 TAXMAN 307 (P&H ), HELD THAT UNDER THE PROVISIONS OF SECTION 124(3), THE JU RISDICTION OF AO COULD NOT BE CALLED IN QUESTION BY AN ASSESSEE AFTE R THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH NOTICE WAS SERVED U/S 142(1) OR AFTER COMPLETION OF ASSESSMENT WHICHEVER WAS EARLIE R. IN THE PRESENT CASE, THERE IS NO EVIDENCE ON RECORD THAT A NY SUCH OBJECTION WAS TAKEN WITHIN 30 DAYS BY THE ASSESSEE AFTER THE SERVICE OF NOTICE U/S 143(2) UPON HIM BY THE DCIT, RANGE-I,JAL. IN THE CASE OF CIT VS. SOHAN LAI SEWARAM JAGGI 222 CTR (ALL) 412, THE HONBLE HIGH COURT HAVE HELD THAT SINCE THE ASS ESSEE HAD FAILED TO RAISE OBJECTION AS REGARD JURISDICTION OF AO WITHIN 30 DAYS OF RECEIPT OF NOTICE U/S 143(2) AS STIPULATED BY SE CTION 124(3), THE TRIBUNAL WAS NOT JUSTIFIED IN ANNULLING ASSESSMENT ON THE GROUND OF JURISDICTION. IN THEIR DECISION IN THE CASE OF H INDUSTAN TRANSPORT CO VS. IAC 189 ITR 326 (ALL), THE HON'BLE HIGH COUR T HELD, AFTER A SURVEY OF THE DIFFERENT PROVISIONS OF THE I.T. ACT RELATING TO JURISDICTION OF AOS, THAT THE INCOME TAX ACT BEING AN ENACTMENT AIMED AT COLLECTING REVENUE, THE LEGISLATURE DID NO T INTEND COLLECTION OF REVENUE TO BE BOGGED DOWN ON ACCOUNT OF TECHNICAL PLEA OF JURISDICTION AND HAD, THEREFORE, PRESCRIBED THE TIME LIMIT UPTO WHICH THE PLEA OF JURISDICTION MAY BE MADE. TH E RIGHT OF JURISDICTION WAS LOST AS SOON AS THE ASSESSMENT WAS COMPLETED AND EVEN WHEN THE RIGHT WAS EXERCISED BEFORE THE ASSESS MENT WAS COMPELLED, THE QUESTION WAS TO BE DECIDED BY THE CI T AND COURTS DID NOT COME INTO THE PICTURE. IT WAS HELD THAT IT WAS APPARENT THAT THE ACT DID NOT TREAT THE ALLOCATION OF FUNCTIONS T O VARIOUS AUTHORITIES OR OFFICERS AS ONE OF SUBSTANCE, BUT TR EATED THE MATTER AS ONE OF PROCEDURE AND DEFECT OF PROCEDURE DID NOT INVALIDATE THE END ACTION. THE HONBLE HIGH COURT DISMISSED THE AP PELLANTS PLEA THAT SINCE THE AO WHO PASSED THE ASSESSMENT ORDER D ID NOT HAVE JURISDICTION OVER THE ASSESSEE AS PER THE EXTANT OR DERS OF CBDT, THE ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 7 ASSESSMENT FRAMED BY THE AO WAS INVALID. THE HONBL E JURISDICTIONAL HIGH COURT HAVE ALSO, IN THEIR DECIS ION IN THE CASE OF CWT VS. SIRI PAUL OSWAL 293 ITR 273, HELD THAT ONCE THE ASSESSEE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT WAS FINALIZED, THE PLEA OF LACK OF JURISDICTION COU LD NOT BE RAISED FOR THE FIRST TIME IN THE APPEAL. IT WAS HELD THAT THE PRINCIPLE OF DE- FACTO DOCTRINE WAS ALSO ATTRACTED. IT WAS HELD THAT THE ASSESSEE WAS DEBARRED FROM RAISING OF OBJECTION AS TO JURISDICTI ON BEFORE THE APPELLATE AUTHORITY AND THE APPEAL WAS NOT MAINTAIN ABLE. 2.6. CONSIDERING THE FACTS AND THE LEGAL POSITION D ISCUSSED ABOVE, I AM OF THE VIEW THAT THE ASSESSEE WAS SERVED WITH THE NOTICE U/S 143(2) WITHIN THE PRESCRIBED PERIOD AFTER FILING OF THE RETURN. GROUND NO.2 OF APPEAL IS, THEREFORE, REJECTED. 7. THE LD. COUNSEL FOR THE ASSESSEE, CONTENDED BEFO RE US AS BEFORE THE AUTHORITIES BELOW THAT THE NOTICE U/S. 143(2) DATE D 23.09.08, SERVED ON 27.09.2008, WHICH FOUND REFERENCE IN AOS LETTER DA TED 19.08.2009, WAS THE ONE ISSUED BY THE DCIT, R-I, JALANDHAR; THAT TH ERE ALSO REMAINS NO DOUBT OR DISPUTE THAT THE JURISDICTION OVER THIS CA SE STOOD VESTED WITH THE R-IV, WHICH FACT IS ALSO EVIDENT FROM THE ID. AO'S OWN CONDUCT OF HAVING FRAMED THE IMPUGNED ORDER EVEN WHEN THE MANDATORY N OTICE WAS NOT ISSUED BY HIM, AND HENCE, THE DCIT R-I, WAS NOT VES TED WITH ANY AUTHORITY TO ISSUE THE IMPUGNED NOTICE U/S. 143(2); THAT THEREFORE, IT IS AN OBVIOUS CASE WHERE THE MANDATORY NOTICE DATED 23 .09.2008 WAS ISSUED BY AN ASSESSING OFFICER NOT HOLDING JURISDIC TION OVER THIS CASE, WHICH PER SE RENDERS NOT ONLY THE SAID NOTICE A NUL LITY IN THE EYES OF LAW, BUT ALSO ALL THE CONSEQUENTIAL PROCEEDINGS, FLOWING FROM THE ASSUMPTION OF JURISDICTION BASED ON SUCH INVALID NOTICE, CULMI NATING IN THE SHAPE OF ORDER UNDER APPEAL; THAT THE BENEFIT OF CONTINUITY OF PROCEEDINGS TO ANOTHER OFFICER IS AVAILABLE ONLY WHERE THE ORIGINA L STATUTORY NOTICE IS ISSUED BY AN OFFICER OF COMPETENT JURISDICTION; THA T THE INITIAL INFIRMITY IN THE PROCEEDINGS IS THUS FATAL AND, BY ALL MEANS, IN CURABLE; THAT EVEN FOR THE EARLIER YEAR, I.E., FOR AY 2006-07, THE RETURN WAS FILED WITH RANGE-IV AS PER ACKNOWLEDGEMENT DT.27.10.06; THAT IT WAS PRO CESSED U/S. L43(L)(A) ON 16.12.06; THAT BASED ON THIS RETURN FOR AY 06-07 , THE ACIT R-IV ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 8 ISSUED FORM NO.28 WITH NOTICE U/S.156 FOR PAYMENT O F ADVANCE TAX FOR AY 2007-08; THAT THEN CAME A NOTICE FROM ITO WARD-I (3) CALLING FOR RETURN FOR AY 2006-07; THAT AS PER REPLY DT. 9.09. 2007, THE ITO 1(3) WAS INFORMED THAT THE RETURN ALREADY STOOD FILED WITH R -IV; THAT THEREAFTER, NOTICE U/S. 143(2) WAS ISSUED BY ACIT R-IV AND FINA LLY, ORDER U/S 143(3) WAS PASSED ON 4.12.2008 BY JT. CIT R-IV; THAT THUS, WHEN OR ALL PURPOSES, R-IV HAD ALREADY TAKEN OVER ABSOLUTE JURI SDICTION ON THIS CASE, THE RETURN FOR AY 2007-08, WAS SENT TO RECEIPT COUN TER OF R-IV; THAT THE ADDRESS AND THE RELEVANT COLUMN OF THE RETURN WERE METICULOUSLY FILLED SO AS TO ENSURE FILING OF THIS RETURN WITH R-IV; THAT HOWEVER, IT APPEARS THE CONCERNED OFFICIAL AT RECEIPT COUNTER SENT THIS RET URN TO R-I, AS ITS ACKNOWLEDGEMENT BEARS THE STAMP OF RANGE-I; THAT ID ENTICAL EVENTS TOOK PLACE EVEN IN THE CASE OF SISTER CONCERN M/S ZOLOTO INDUSTRIES, WHERE ALSO, THOUGH THE JURISDICTION STOOD VESTED WITH R-I V, THE NOTICE U/S.143(2) WAS ISSUED BY THE DCIT R-I, JALANDHAR; T HAT ON NON COMPLIANCE IN THAT CASE, A PENALTY NOTICE U/271 WAS ISSUED BY THE DCIT R-I, IN RESPONSE TO WHICH, VIDE LETTER DATED 29.8.2 008, ADDRESSED TO THE DCIT R-I, AN OBJECTION WAS RAISED POINTING OUT THE EXACT DETAILS AS TO THE JURISDICTION AND STATUS OF RETURNS FILED AND ASSESS MENTS FRAMED OF THIS GROUP, WITH SPECIFIC INFORMATION AS TO THE FACT THA T REGULAR ASSESSMENT PROCEEDINGS IN THE CASE OF THIS ASSESSEE, I.E., SH PARVINDER VIR HANS, FOR AY 2006-07, WERE ALREADY UNDER PROGRESS, WITH THE J T. CIT, R-IV. A COPY OF THIS LETTER WAS ALSO ENDORSED TO ALL THE CONCERN ED AUTHORITIES; THAT NOW, DESPITE THIS LETTER DATED 29.08.2003, BRINGING ALL FACTS TO THE NOTICE OF DCIT, R-I, WITH COPY THEREOF ENDORSED TO DCIT R- IV, THE IMPUGNED NOTICE STILL CAME TO BE ISSUED BY THE DCIT R-I, ON A LATER DATE I.E. 23.09.2008; THAT WHILE THE ASSESSEE'S BONAFIDES IN MATTER ARE BEYOND ANY REASONABLE DOUBT, THE UNLAWFUL EXERCISE OF JURISDIC TION, BY THE DCIT R-I, UNMINDFUL OF THE FACTS AS DISCERNIBLE FROM RECORD, AND ALSO BROUGHT TO HIS NOTICE, HAVE CAUSED UNDUE PREJUDICE TO ASSESSEE, W HICH DESERVES NOT TO BE SUSTAINED, AND THE LD. CIT(A) HAS ERRED IN DECID ING THE ISSUE AGAINST ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 9 THE ASSESSEE; THAT IT IS AN ADMITTED CASE WHERE NO VALID NOTICE U/S. 143(2) HAS BEEN SERVED ON ASSESSEE BY THE AO HOLDIN G JURISDICTION OVER HIM. THAT THE HON'BLE JURISDICTIONAL HIGH COURT, IN THE CASE OF CIT V CEBON INDIA LIMITED (2010) 34 DTR (P&H) 119, HELD T HAT IN THE ABSENCE OF SERVICE OF NOTICE U/S.143(2), ASSESSMENT WAS INV ALID AND ALSO THAT IT WAS NOT A EVEN A CURABLE DEFECT U/S.292BB; THAT IN THE CASE OF ACIT V HOTEL BLUE MOON (2010) 35 DTR (SC)1, THE HON'BLE AP EX COURT, EVEN IN THE CASE OF BLOCK ASSESSMENT WHERE NOTICE U/S. 143( 2) WAS NOT ISSUED AFTER THE RETURN WAS FILED AGAINST NOTICE U/S.158BC , HELD THE BLOCK ASSESSMENT AS INVALID. IN HOTA & CO. V CIT (2008) 3 01 ITR 184 (SC), NOTICE ISSUED U/S. 142(1) WAS NOT HELD TO BE A SUBS TITUTE FOR MANDATORY NOTICE U/S.143 (2). 8. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE HAS CO NTENDED THAT THE LD. CIT(A) HAS GONE WRONG IN OBSERVING THAT NO OBJECTIO N WAS TAKEN BY THE ASSESSEE U/S 124(3) OF THE INCOME TAX ACT, 1961 WIT HIN 30 DAYS OF THE SERVICE OF THE NOTICE U/S 143(2) OF THE ACT, AND TH AT THE ASSESSEE WAS NOT PREJUDICED IN ANY MANNER. IT HAS BEEN CONTENDED THA T THE ASSESSEE HAS NOT CHALLENGED THE JURISDICTION OF THE AO WHO HAS P ASSED THE ASSESSMENT ORDER; AND THAT THE REGULAR ASSESSMENT FOR ASSESSME NT YEAR 2006-07 HAS ALREADY BEEN MADE BY THE SAID A.O., I.E., ACIT CIRC LE IV, JALANDHAR. 9. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELI ANCE ON THE FOLLOWING CASE LAWS: 1) HINDUSTAN TRANSPORT CO. VS. IAC, 189 ITR 326 (ALL.) 2) ACIT V. HOTEL BLUE MOON, (2010) 321 ITR 362 ( SC) 3) CIT V. SOHAL LAL SEWA RAM JAGGI (2009) 222 CTR 412 (ALL.) 4) CWT VS. SIRI PAUL OSWAL, (2007) 293 ITR 273 (P&H) 5) CIT VS. CEBON INDIA LTD., (2012) 347 ITR 583 (P&H) ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 10 6) SUBHASH CHANDER VS. CIT, (2008) 218 CTR 191 ( P&H). 10. THE LD. DR, ON THE OTHER HAND, HAS STRONGLY SUP PORTED THE IMPUGNED ORDER AND CONTENDED THAT THE LD. CIT(A) HA S PASSED REASONED ORDER. 11. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE MOOT ISSUE HE REIN IS AS TO WHETHER OR NOT IN A CASE LIKE THE PRESENT ONE, WHERE THE AS SESSMENT ORDER HAS BEEN PASSED IN THE ABSENCE OF ISSUANCE OF STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT BY THE AO HOLDING JURISDICTION OV ER THE CASE, THE SAME IS VALID IN LAW. IN THE PRESENT CASE, ADMITTEDLY, THE NOTICE (APB 16) UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY THE DCIT, R ANGE-1, JALANDHAR, WHEREAS THE ASSESSMENT ORDER WAS PASSED BY THE ACIT , CIRCLE-IV, JALANDHAR. NOW IN HOTEL BLUE MOON (SUPRA), THE HO NBLE SUPREME COURT HAS HELD THAT THE ASSESSING OFFICER MUST NECE SSARILY ISSUE NOTICE U/S 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2); THAT THE REQUIREMENT OF NOTICE U/S 143(2) CANNOT BE DISPENSED WITH. THOUGH HOTEL BLUE MOON (SUPRA) PERTAINS TO BLOCK ASSESSMENT, THE JURISDICTIONAL ISSUE THEREIN, IS THE SAME AS TH AT APPLICABLE TO YEARLY REGULAR ASSESSMENT. IN THE PRESENT CASE, THE AO HOL DING JURISDICTION OVER THE CASE NEVER ISSUED NOTICE U/S 143(2) OF THE ACT TO THE ASSESSEE. AS SUCH, THE SAID AO DID NOT HAVE JURISDICTION TO PRO CEED FURTHER AND TO MAKE ASSESSMENT. THE HONBLE SUPREME COURT IN HOTE L BLUE MOON (SUPRA), HELD THAT THE OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 11 ISSUE NOTICE U/S 143(2) OF THE ACT CANNOT BE A MERE PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE. 12. THUS, IN KEEPING WITH HOTEL BLUE MOON (SUPRA) , SINCE THE ASSESSMENT ORDER WAS PASSED IN THE ABSENCE OF STATU TORY NOTICE U/S 143(2) OF THE ACT BY THE AO BY HOLDING JURISDICTION OVER THE CASE, THE SAID ASSESSMENT ORDER IS INVALID IN LAW. 13. REGARDING THE CIT(A)S OBJECTION TO THE ASSESS EE NOT HAVING RAISED ANY OBJECTION U/S 124(3) OF THE ACT WITHIN 30 DAYS OF THE SERVICE OF NOTICE U/S 143(2) OF THE ACT, FIRSTLY, NOWHERE HAS THE ASS ESSEE CHALLENGED THE JURISDICTION OF THE AO WHO PASSED THE ASSESSMENT OR DER, I.E., ACIT, CIRCLE-IV, JALANDHAR. THIS HAS ALSO NOT BEEN DISPUT ED BY THE DEPARTMENT. THE GRIEVANCE OF THE ASSESSEE, RATHER, IS THAT THE NOTICE ISSUED U/S 143(2) WAS NOT ISSUED BY THE AO PASSING THE ASSESSMENT ORD ER, AND SO, THE ASSESSMENT ORDER IS BAD IN LAW. THIS BEING THE CASE , SECTION 124(3) DOES NOT COME INTO PLAY AT ALL, AND THE OBSERVATIONS OF THE CIT(A) IN THIS REGARD IS INCORRECT. IN I. BUILDERS (P) LTD. VS. ITO, 1 15 ITD 419 (LUCK.), DEALING WITH SECTIONS 124(2) & (3)/148, IT HAS BEEN HELD REASSESSMENT PROCEEDINGS HAVING BEEN INITIATED BY THE AO WHO DI D NOT HAVE JURISDICTION OVER THE CASE, COMPLETION OF REASSESSM ENT IN CONTINUATION OF SUCH INITIATION BY AO HAVING JURISDICTION WAS INVAL ID IN LAW. LIKEWISE, IN THE PRESENT CASE, ASSESSMENT PROCEEDINGS WERE INITI ATED BY THE DCIT, RANGE-1, JALANDHAR, WHEREAS THE ASSESSMENT ORDER WA S PASSED BY THE ACIT, CIRCLE-IV, JALANDHAR WHICH COMPLETION OF THE ASSESSMENT WAS ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 12 INVALID IN LAW. AS SUCH, THERE WAS NO OCCASION FOR THE PROVISIONS OF SECTION 124 OF THE ACT TO COME INTO PLAY. 14. THE LD. CIT(A) HAS ALSO OBJECTED THAT NO PREJUD ICE WAS CAUSED TO THE ASSESSEE IN THIS MATTER. HERE, AGAIN, SINCE INI TIATION OF THE ASSESSMENT PROCEEDING IS BAD IN LAW, THE ASSESSMENT ORDER PASSED CANNOT BE HELD TO BE LEGALLY VALID. THEREFORE, ALL PREJUDICE STANDS CAUSED TO THE ASSESSEE. 15. IN VIEW OF THE ABOVE, CROSS OBJECTION NOS. 1 & 2 ARE ACCEPTED AND THE ASSESSMENT ORDER IS CANCELLED. 16. PURSUANT TO THE ABOVE CANCELLATION OF THE ASSES SMENT ORDER, NOTHING ELSE SURVIVES FOR ADJUDICATION. 17. ITA NO.247(ASR)/2011 AND C.O. NO.3(ASR)/2011 SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE IN ITA NO.88(ASR)/2011 AND ALLOWED THE C.O. NO.4(ASR)/2011 OF THE ASSESSEE, HEREINABOVE, THE AFORESAID APPEAL OF THE REVENUE I S ALSO DISMISSED AND THE C.O. OF THE ASSESSEE IS ALLOWED AND THE FINDING S GIVEN THEREIN WILL EQUALLY APPLY MUTATIS MUTANDIS TO ITA NO. 247(ASR)/ 2011 AND C.O. NO.3(ASR)/2011. 18. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED AND THE C.OS OF THE ASSESSEE ARE ALLOWED, AS INDICATED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/02/201 6 SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 01/02/2016 ITA NO.88 & 247(ASR)/2011 CO NOS. 4 & 13(ASR)/2011 13 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH.PARVINDER VIR HANS PROP. M/S. ZO LOTO MALLEABLES, JALANDHAR. 2. THE ACIT R-IV, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.