ITO,Ward-48(2), Kolkata, Kolkata V. M/s Suntex garments, Howrah

ITA 1110/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75101 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2012
• Court: TRIBUNAL
• Department Lawyers: A K TIBREWAL
• Assessee Lawyers: HARIDAS SAHA
• Keywords: Invalid notice; Period of limitation; Validity of assessment; Assessment record; Time period of passing order; Reassessment proceedings
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.1110/KOL/2012 #$ %&/ ASSESSMENT YEAR: 2006-07 INCOME-TAX OFFICE, WD-48(2), KOLKATA. VS. M/S. SU NTEX GARMENTS (PAN: AAMFS1044A) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 26.03.2014 DATE OF PRONOUNCEMENT: 26.03.2014 FOR THE ASSESSEE: SHRI HARIDAS SAHA, JCIT, SR. DR FOR THE REVENUE : SHRI A. K. TIBREWAL / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXX, KOLKATA IN APPEAL NO. 372/CIT(A)-XXX/WD-48(2)/2008-09 DATED 15.03.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-48(2), KOLKATA U/S. 143(3) OF THE INCOME-TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DA TED 30.12.2008. 2. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN QUASHING THE ASSESSMENT PROCEEDINGS AS NOTICE U/S. 143(2) IS ISS UED BEYOND LIMITATION PERIOD. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NOS. 1 AND 2: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCE IN TH E CASE LD. CIT(A) ERRED IN TREATING THE SERVICE OF THE NOTICE BY AFFIXATION AS INVALID. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES IN TH E CASE, WHILE TREATING THE SERVICE OF THE NOTICE BY AFFIXATION AS INVALID AS MENTIONED AS GR. NO. 1 AS ABOVE, FELT TO APPRECIATE THAT THE RATIO OF THE CASE SAMIR KUMAR ADITYA 17 TAXMANN .COM 128 (DELHI) IS APPLICABLE IN THE INSTANT CASE. 3. BRIEFLY STATED FACTS ARE THAT THE RELEVANT ASSESSME NT YEAR IS 2006-07 AND IT FILED ITS RETURN OF INCOME ON 30.10.2006 ALONG WITH AUDIT REPORT U/S . 44AB OF THE ACT. THE ASSESSEE RAISED BEFORE CIT(A) THE ISSUE REGARDING LIMITATION THAT N OTICE U/S. 143(2) WAS RECEIVED BY ASSESSEE ON 03.11.2007 I.E. BEYOND 12 MONTHS FROM THE DATE OF F ILING OF RETURN OF INCOME. THE CIT(A) AFTER 2 ITA NO. 1110/K/2012 M/S. SUNTEX GARMENTS, AY 2006-07 CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, REMAND REPORT OF THE AO AND REJOINDER OF THE ASSESSEE QUASHED THE ASSESSMENT BY OBSERVING IN PAR A 1.1 AS UNDER: 1.1 THE SUBMISSIONS OF THE APPELLANT REGARDING THE SERVICE OF NOTICE U/S. 143(2) AS ABOVE AND THE REMAND REPORT OF THE O AS WELL AS TH E POINT RAISED IN THE REJOINDER HAVE BEEN CONSIDERED. THE APPELLANT HAS SUBMITTED COPIES OF THE NOTICE RECEIVED THROUGH SPEED POST IN THE FORM OF THE ENVELOP CONTAINING TH E SAID NOTICE AND AS PER THE SEAL OF THE POSTAL DEPARTMENT ON THE OBVERSE AND THE NOTING ON THE TOP OF THE ENVELOP INDICATE THE DATE OF SERVICE AS 3.11.2007. ON THE COPY OF TH E NOTICE U/S. 143(2) FILED BY THE APPELLANT THE DATE IS MENTIONED AS 22/26.10.2007. H OWEVER FROM THE INSPECTORS REPORT REGARDING THE AFFIXATION THE INSPECTOR HAS REPORTED THAT THE NOTICE WAS SERVED BY AFFIXTURE ON 29.10.2007 AND FROM THE OFFICE COPY OF THE NOTICE IT IS SEEN THAT THE SAME HAS BEEN SIGNED BY THE AO ON 22/26.10.2007,WHEREAS IN T HE REPORT OF THE INSPECTOR THE DATE OF THE NOTICE HAS BEEN MENTIONED AS 22.10.2007. IN THE ASSESSMENT ORDER ALSO THE DATE OF THE NOTICE HAS BEEN MENTIONED AS 26.10.2007. THE REFORE, THERE ARE SUFFICIENT REASONS TO BELIEVE THAT THE NOTICE WAS SIGNED BY THE AO ON 26.10.2007 AND THE DATE OF THE NOTICE MENTIONED IN THE REPORT OF THE INSPECTOR IS INCORRE CT. IT IS FURTHER SEEN FROM THE ASSESSMENT RECORDS THAT THERE IS NOTING IN THE ORDE R SHEET BY THE AO DT. 22.10.2007 REGARDING SERVICE OF NOTICE U/S. 143(2) BY AFFIXTUR E. IT IS HOWEVER SEEN FROM THE ASSESSMENT ORDER THAT THE AO IS NOT REFERRING TO TH E SERVICE OF NOTICE BY AFFIXTURE BUT ONLY TO THE ISSUE OF NOTICE DATED 26.10.2007. THERE FORE, THERE ARE DEFINITE DISCREPANCIES IN THE RECORD REGARDING THE SERVICE OF NOTICE AND T HE APPELLANTS SUBMISSION IN THIS REGARD HAS SOME WEIGHT. THE SERVICE OF NOTICE U/S.1 43(2) BY APPELLANT IS THEREFORE NOT BORNE OUT FROM THE FACTS ON RECORD AS DISCUSSED ABO VE. FURTHER THE SERVICE BY POST IS ALSO ON 3.11.2007 I.E. BEFORE THE TIME LIMIT PRESCR IBED UNDER THE ACT. CONSIDERING THE DECISION CITED BY THE APPELLANT INCLUDING THAT OF T HE HONBLE SUPREME COURT IN ACIT VS. HOTEL BLUE MOON REGARDING THE MANDATORY REQUIREMENT OF SERVICE OF NOTICE U/S.143(2) IT IS HELD THAT THERE SHOULD BE SERVICE OF NOTICE U/S. 143(2) WITHIN THE MANDATORY TIME LIMIT PRESCRIBED UNDER THE I. T. ACT WHICH HAS NOT BEEN E STABLISHED IN THE APPELLANTS CASE AND THEREFORE THE APPELLANT IS JUSTIFIED IN CHALLEN GING THE VALIDITY OF ASSESSMENT ORDER U/S. 143(3). IT IS THEREFORE HELD THAT THE ASSESSM ENT ORDER PASSED BY THE AO IS NOT VALID SINCE THE NOTICE U/S. 143(2) WAS NOT SERVED IN THE PRESCRIBED TIME LIMIT WHICH IS THE MANDATORY REQUIREMENT. HOWEVER THE ADDITIONS MADE IN ASSESSMENT ORDER ARE ALSO BEING DECIDED ON MERITS AS THE SAME HAVE BEEN RAISE D IN THE ORIGINAL GROUNDS OF APPEAL. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS IS NARRATED BY CIT(A) HAS NOT BEEN DISPUT ED BY REVENUE AS NOTED ABOVE. REVENUES ONLY CONTENTION IS THAT THE NOTICE U/S. 143(2) OF T HE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ALTHOUGH THE LIMITATION OF 12 MONTHS I.E. SERVED ON 03.11.2007. THE LD. SR. DR STATED THAT IN VIEW OF THE PROVISIONS OF SECTION 292BB OF THE ACT THERE IS NO INFIRMITY IN LATE ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT AS ASSESSEE PARTICIPA TED IN THE PROCEEDINGS. FROM THE RECORDS IT IS NOTICED THAT NOTICE U/S. 143(2) OF THE ACT DATED 22 /26.10.2007 WAS SERVED ON THE ASSESSEE ON 03.11.2007. FIRST OF ALL WE HAVE TO SEE WHETHER TH E PROVISION OF SECTION 292BB OF THE ACT IS APPLICABLE IN THIS ASSESSMENT YEAR I.E. 2006-07 OR NOT. THE RELEVANT PROVISION READS AS UNDER: 3 ITA NO. 1110/K/2012 M/S. SUNTEX GARMENTS, AY 2006-07 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTI ON IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS ( A ) NOT SERVED UPON HIM; OR ( B ) NOT SERVED UPON HIM IN TIME; OR ( C ) SERVED UPON HIM IN AN IMPROPER MANNER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. 5. BUT, LD. COUNSEL FOR THE ASSESSEE STATED THAT TH IS PROVISION OF SECTION 292BB OF THE ACT HAS BEEN HELD TO BE PROSPECTIVE AND NOT RETROSPECTI VE I.E. APPLICABLE ONLY WITH EFFECT FROM 01.04.2008. FOR THIS PROPOSITION HE RELIED ON THE DECISION OF SPECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD. VS. DCIT (2009) 117 ITD 273 (DEL.)(SB), WHEREIN THE FOLLOWING PROPOSITIONS ARE LAID DOWN: (1) S. 292BB, INSERTED BY THE F.A. 2008 W.E.F. 01.0 4.2008, CREATES A LEGAL FICTION AND TAKES AWAY THE RIGHT OF AN ASSESSEE TO CLAIM THAT I N CASE OF INVALID NOTICE THE WHOLE PROCEEDINGS TAKEN PURSUANT TO THAT NOTICE WOULD BE VOID AB INITIO AND WILL HAVE NO LEGAL CONSEQUENCES; (2) HOWEVER, THE RULE OF INTERPRETATION OF STATUTE S IS THAT A PROVISION CREATING A NEW DISABILITY OR OBLIGATION AND IMPOSING A NEW DUTY IN RESPECT OF COMPLETED TRANSACTIONS CANNOT BE CONSTRUED TO BE RETROSPECTIVE; (3) THOUGH THE ISSUE AND SERVICE OF NOTICE RELATES TO PROCEDURAL LAW S. 292-BB TAKES AWAY THE VALUABLE RIGHT OF AN ASSESSEE TO CHALLENGE THE VALIDITY OF ASSESSMENT DURING THE COURSE OF APPELLATE PROCEEDINGS AND CREATES A NEW D ISABILITY ON THE ASSESSEE BY DEBARRING HIM FROM CHALLENGING THE VALIDITY OF THE SAME; (4) CONSEQUENTLY, S. 292-BB CANNOT BE CONSTRUED TO BE RETROSPECTIVE AND HAS TO BE APPLIED PROSPECTIVELY IN RESPECT OF AY 2008-09 AND SUBSEQUENT YEARS. WE FIND THAT THIS PROVISION WILL APPLY PROSPECTIVEL Y FOR AND FROM AY 2008-09 AND THE RELEVANT ASSESSMENT YEAR INVOLVED IN THE PRESENT CASE IS AY 2006-07, HENCE, PROVISION OF SECTION 292BB OF THE WILL NOT APPLY. 6. NOW COMING TO THE ISSUE OF NON-ISSUE OF NOTICE U /S. 143(2) OF THE ACT WHICH GOES TO THE VERY ROOT OF THE VALIDITY OF THE ASSESSMENT ORDER, WE FIND THAT BY VIRTUE OF SECTION 143(2) OF THE ACT THE ASSESSEE HAS BEEN GIVEN OPPORTUNITY TO SUBS TANTIATE THE RETURN FILED. THEREFORE, FOR INITIATING SCRUTINY ASSESSMENT OR REASSESSMENT PROC EEDINGS SERVICE OF NOTICE U/S. 143(2) OF THE ACT IS A CONDITION PRECEDENT. HONBLE SUPREME COUR T IN THE CASE OF ACIT VS. HOTEL BLUE MOON (2010) 321 ITR 362 (SC) AND ALSO THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE 4 ITA NO. 1110/K/2012 M/S. SUNTEX GARMENTS, AY 2006-07 CASE OF CIT VS. RAJEEV SHARMA (2010) 232 CTR (ALL.) 303 HAS HELD THAT NON ISSUE OF NOTICE U/S. 143(2) OF THE ACT AFTER FILING OF RETURN BY AS SESSEE VITIATES THE ASSESSMENT ORDER OR REASSESSMENT PROCEEDINGS. CONSIDERING THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDICIAL PRONOUNCEMENTS IN THE CASE OF HOTEL BLUE M OON, SUPRA AND ALSO RAJEEV SHARMA, SUPRA, WE ARE OF THE VIEW THAT THE AO IS BOUND TO SERVE ON THE ASSESSEE A NOTICE U/S. 143(2) OF THE ACT, WHICH HE NEVER DID IN THIS CASE. SIMILARLY, LD. CO UNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE CIT VS. CEBON INDIA LTD. (2012) 347 ITR 583 (P&H), WHEREIN HONBLE HIGH COURT HAS N OTED THE FACTS THAT CIT(A) FOUND THAT THERE IS NO EVIDENCE TO SHOW THAT NOTICE U/S. 143(2 ) OF THE ACT HAS BEEN SERVED ON THE ASSESSEE BEFORE NOVEMBER 30, 1997, I.E. WITHIN ONE YEAR FROM THE DATE OF FILING OF RETURN OF INCOME AND THEREFORE, HONBLE HIGH COURT HELD AS UNDER: WE FIND THAT CONCURRENT FINDING HAS BEEN RECORDED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AS WELL AS THE TRIBUNAL ON THE QUESTION O F DATE OF SERVICE OF NOTICE. NOTICE WAS NOT SERVED WITHIN THE STIPULATED TIME. MERE GIVING OF DISPATCH NUMBER WILL NOT RENDER THE SAID FINDING TO BE PERVERSE. IN THE ABSENCE OF NOT ICE BEING SERVED, THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE ASSESSMENT. ABSENCE OF NOTICE CANNOT BE HELD TO BE CURABLE UNDER SECTION 292BB OF THE ACT. WE CONFIRM THE ORDER OF CIT(A) ANNULLING THE ASSESS MENT. AS WE HAVE ALREADY QUASHED ASSESSMENT PROCEEDINGS ON JURISDICTION, WE NEED NOT TO GO ON MERITS. APPEAL OF REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH MARCH, 2014 ./ #01 2 JD.(SR.P.S.) 5 ITA NO. 1110/K/2012 M/S. SUNTEX GARMENTS, AY 2006-07 3 *4 5 4%6- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT ITO, WARD-48(2), KOLKATA. 2 *+() / RESPONDENT M/S. SUNTEX GARMENTS, 545, G. T. ROA D (SOUTH), HIND APARTMENT, HOWRAH-711 101. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 4:; *# / DR, KOLKATA BENCHES, KOLKATA +4 */ TRUE COPY, #