M/s Asha Business Centre Pvt. Ltd., Bangalore V. DCIT, Bangalore

ITA 1400/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0231 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JT
• Assessee Lawyers: A SHANKAR
• Keywords: Assessment record
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1577/BANG/2013 ASSESSMENT YEAR : 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(1), BANGALORE. VS. M/S. ASHA BUSINESS CENTRE PRIVATE LTD., #1, ASHA ARCH, ASHOK NAGAR, MAGRATH ROAD, BANGALORE 560 025. PAN: AACCA 3762A APPELLANT RESPONDENT ITA NO.1400/BANG/2013 ASSESSMENT YEAR : 2009- 10 M/S. ASHA BUSINESS CENTRE PRIVATE LTD., #1, ASHA ARCH, ASHOK NAGAR, MAGRATH ROAD, BANGALORE 560 025. PAN: AACCA 3762A VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(1), BANGALORE. APPELLANT RESPONDENT REVENUE BY : SHRI SUNIL KUMAR AGARWALA, JT. CIT(DR) ASSESSEE BY : SHRI A. SHANKAR, ADVOCATE DATE OF HEARING : 22.06.2016 DATE OF PRONOUNCEMENT : 30.06.2016 ITA NOS.1577 & 1400/BANG/2013 PAGE 2 OF 6 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THESE ARE CROSS APPEALS BY THE REVENUE AND THE AS SESSEE AGAINST THE ORDER OF CIT(APPEALS)-I, BANGALORE DATED 26.8.2 013 FOR THE ASSESSMENT YEAR 2009-10. 2. WE FIRST TAKE UP THE ASSESSEES APPEAL IN ITA N O.1400/BANG/2013. THE ASSESSEE IS A PRIVATE LIMITED COMPANY WHICH FIL ED ITS RETURN OF INCOME FOR THE AY 2009-10 ON 26.9.2009 DECLARING A TOTAL I NCOME OF RS.3,27,67,090. THE RETURN WAS PROCESSED U/S. 143(1 ) OF THE INCOME-TAX ACT, 1961 [THE ACT] ON 29.3.2011. 3. THE AO SUBSEQUENTLY REOPENED THE ASSESSMENT U/S. 147 BY ISSUE OF NOTICE U/S. 148 OF THE ACT DATED 23.3.2011. THE AS SESSEE REPLIED BY STATING THAT RETURN OF INCOME FILED ORIGINALLY ON 26.9.2009 MAY BE TAKEN AS ONE FILED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. THE AO ISSUED A NOTICE U/S. 142(1) OF THE ACT ON 12.7.2012, HOWEVER, THERE IS N O INDICATION IN THE RECITAL OF THE ASSESSMENT ORDER THAT A NOTICE U/S. 143(2) O F THE ACT WAS ISSUED. IN THE REASSESSMENT COMPLETED U/S. 143(3) R.W.S. 147 O F THE ACT BY ORDER DATED 18.10.2012, THE TOTAL INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.3,90,21,204. ITA NOS.1577 & 1400/BANG/2013 PAGE 3 OF 6 4. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT(APPEALS). IN THE GROUNDS OF APPEAL BEFORE THE CIT(APPEALS), THE ORDER OF REOPENING OF THE ASSESSMENT U/S. 147 WAS CHALLENGED AS FOLLOWS:- 2. THE IMPUGNED ORDER OF RE-ASSESSMENT IS BAD IN L AW AND VOID-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S. 148 OF THE ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, ASSESSMENT REQUIRES TO BE ANNULLED UN DER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, THE ORDER OF ASS ESSMENT PASSED U/S. 143(3) RWS 147 OF THE ACT WITHOUT SERVI NG THE MANDATORY NOTICE U/S. 143(2) OF THE ACT ON THE APPE LLANT IS OPPOSED TO LAW AND VOID-AB-INITIO AND CONSEQUENTLY, THE IMPUGNED ORDER PASSED IS ANUL1ITY AND LIABLE TO BE CANCELLED. 5. THE CIT(APPEALS) HELD THAT THERE IS NO MERIT IN THE ASSESSEES OBJECTION FOR NON-ISSUANCE OF NOTICE U/S. 143(2) AN D REJECTED THE GROUND RAISED BY THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE CIT(APPEALS) ARE AS FOLLOWS:- 3.7 AFTER DUE CONSIDERATION OF THE APPELLANT'S OBJ ECTIONS, VIDE THIS OFFICE LETTER DATED 06.08. 2013, THE ASSE SING OFFICER WAS ASKED TO SUBMIT REPORT WHETHER THE NOTI CE U/S 143(2) HAS BEEN ISSUED AND SERVED ON THE APPELLANT WITHIN PERMISSIBLE TIME AND DIRECTED TO SUBMIT REPORT ON O R BEFORE 26.08.2013. IN COMPLIANCE, THE AO SENT HIS REPORT D ATED 20.08.2013, RECEIVED IN THIS OFFICE ON 23.08.2013 W HICH IS REPRODUCED BELOW:- 'AS DIRECTED BY THE CIT(A), THE ASSESSMENT RECORDS IN THE ABOVE CASE WAS VERIFIED AND IT APPEARS THAT NO NOT ICE U/S 143(2) OF THE I T ACT WAS ISSUED TO THE ASSESSEE DUR ING THE RE-ASSESSMENT PROCEEDINGS, THOUGH NOTICES U/S 142 (1) WERE ISSUED ON SEVERAL OCCASIONS. NOW, IT IS INFOR MED THAT ITA NOS.1577 & 1400/BANG/2013 PAGE 4 OF 6 THE ASSESSEE HAS RAISED THE OBJECTION REGARDING THE VALIDITY OF THE ASSESSMENT. IT IS HUMBLY SUBMITTED THAT DURI NG THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE AUTHORISED REPRESENTATIVE OF 'THE ASSESSEE HAD APPEARED BEFORE THE ASSESSING OFFICER AND APPLYING THE PROVISIONS OF SEC TION 292BB OF THE I T ACT, 1961, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISIONS OF THE ACT, WHICH IS REQ UIRED TO BE SERVED UPON THE ASSESSEE, HAS BEEN DULY SERVE D UPON THE ASSESSEE IN TIME IN ACCORDANCE WITH THE PROVISI ONS OF THE ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TA KING ANY OBJECTION IN ANY PROCEEDINGS OR INQUIRY UNDER T HIS ACT THAT THE NOTICE WAS NOT SERVED UPON HIM. IT IS ALS O SUBMITTED THAT IN SEVERAL JUDICIAL PRONOUNCEMENTS (DECISION OF HIGH COURT OF PUNJAB AND HARYANA IN ARA VALI ENGINEERS P. LTD. VS CIT, (2011) 11 TAXMANN.COM 291, DECISION OF THE ITAT, AHMEDABAD BENCH C IN ITO VS VARIAL PRATIK ENGINEERING (2009) 120 TTJ 1 (AHD), IT HAS BEEN HELD THAT ONCE THE ASSESSEE HAS APPEARED IN AN Y PROCEEDING OR CO-OPERATED IN ANY INQUIRY RELATED TO THE ASSESSMENT, THEN THE ASSESSEE CANNOT BE PERMITTED T O RAISE ANY OF THE OBJECTIONS ENUMERATED IN THE SAID SECTIO N. I . - . ' , . ' , ' ' ' : . ~ ~' - .: ~ . ~ ; ; ; , F . 3.8 IN VIEW OF THE AOS REPORT, THERE IS NO MERIT I N THE APPELLANTS OBJECTION FOR NON ISSUANCE OF THE NOTIC E U/S. 143(2), HENCE APPEAL IN THIS GROUND IS REJECTED. 6. AGGRIEVED, THE ASSESSEE HAS PREFERRED APPEAL BEF ORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE, SHRI A. SHANKA R, RELIED ON THE FOLLOWING DECISIONS:- I) CIT V. MUKESH KUMAR AGARWAL [2012] 345 ITR 29 (A LL) II) ACIT V. GREATER NOIDA INDUSTRIAL DEVELOPMENT AU THORITY [2015] 379 ITR 14 (ALL) III) PRINCIPAL CIT V. SILVER LINE (2016) 129 DTR 19 1 (DEL) IV) CIT V. GITSONS ENGINEERING COMPANY [2015] 370 I TR 87 ITA NOS.1577 & 1400/BANG/2013 PAGE 5 OF 6 8. ON THE OTHER HAND, THE LD. DR, SHRI SUNIL KUMAR AGARWALA RELIED ON THE DECISIONS IN THE CASE OF ARAVALI ENGINEERS P. LTD. VS CIT, (2011) 11 TAXMANN.COM 291 AND K.J. THOMAS, 301 ITR 301 . 9. WE HAVE HEARD BOTH THE PARTIES. THE HONBLE MAD RAS HIGH COURT IN THE CASE OF CIT V. GITSONS ENGINEERING CO., 370 ITR 87 (MAD) HELD AS FOLLOWS:- THE WORD SHALL EMPLOYED IN SECTION 143(2) OF T HE INCOME-TAX ACT, 1961 CONTEMPLATES THAT THE ASSESSIN G OFFICER SHOULD ISSUE NOTICE TO THE ASSESSEE SO AS TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED INCOME OR HAS NOT COMP UTED EXCESSIVE LOSS OR HAS NOT UNDER PAID THE TAX IN ANY MANNER. IT IS, THEREFORE, CLEAR THAT WHEN THE ASSESSING OFFICER CO NSIDERS IT NECESSARY AND EXPEDIENT TO ENSURE THAT TAX IS PAID IN ACCORDANCE WITH LAW, HE SHOULD CALL UPON THE ASSESSEE TO PRODU CE EVIDENCE BEFORE HIM TO ENSURE THAT THE TAX IS PAID IN ACCORD ANCE WITH LAW. THE SECTION MAKES IT CLEAR THAT SERVICE OF NOTICE U NDER SECTION 143(2) OF THE ACT WITHIN THE TIME LIMIT PRESCRIBED IS MANDATORY AND IT IS NOT A MERE PROCEDURAL REQUIREMENT. 10. THE HONBLE MADRAS HIGH COURT FOLLOWED THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT V. HOTEL BLUE MOON [2010] 321 ITR 302 (SC) . IN THE PRESENT CASE, IT IS CLEAR FROM THE REMAN D REPORT SUBMITTED BY THE AO BEFORE THE CIT(APPEALS) THAT NO NOTICE U/S. 143(2) HAS BEEN SERVED UPON THE ASSESSEE WHICH IS MANDATORY. HENCE RESPEC TFULLY FOLLOWING THE DECISION OF THE HONBLE MADRAS HIGH COURT, SINCE TH ERE HAS BEEN NO SERVICE OF NOTICE U/S. 143(2) OF THE ACT ON THE ASS ESSEE, THE ASSESSMENT ORDER PASSED BY THE AO U/S. 143(3) R.W.S. 148 IS QU ASHED. ITA NOS.1577 & 1400/BANG/2013 PAGE 6 OF 6 11. SINCE THE ASSESSEES APPEAL IS ALLOWED ON THE L EGAL ISSUE OF ASSUMPTION OF JURISDICTION U/S. 148 OF THE ACT, ADJ UDICATION OF THE ASSESSEES APPEAL ON MERITS OF THE CASE IS NOT CONS IDERED. SO ALSO, THE DEPARTMENTAL IS DISMISSED AS SUCH. 12. IN THE RESULT, THE APPEAL BY THE ASSESSEE STAN DS ALLOWED, WHILE THE APPEAL BY THE DEPARTMENT IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- SD/- ( INTURI RAMA RAO ) (ASHA VIJAYARAGHAVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 30 TH JUNE, 2016. /D S/ COPY TO: 1. REVENUE 2. ASSESSEE 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.