DHINGRA ORGANIC CHEMICALS PVT. LTD., GURGAON V. ITO, Alwar

ITA 157/JPR/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62012 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA; SUBHASH CHANDRA
• Assessee Lawyers: SANJIV BA JAJ
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NO. 157/JP/2012 ASSTT. YEAR : 2007-08 M/S DHINGRA ORGANIC CHEMICALS PVT LTD. VS THE ITO, WARD -2 (3), ALWAR ALWAR PAN NO. AABCD2747B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJIV BAJAJ RESPONDENT BY : S/SHRI D.K.MEENA & SUBHASH CHA NDRA DATE OF HEARING : 03.05.2012 DATE OF PRONOUNCEMENT : 11.5.2012. ORDER PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF CIT(A), ALWAR RELATING TO ASSESSMENT YEAR 2007-08. 2. THROUGH GROUND NOS. 1 & 2, THE ASSESSEE IS OBJE CTING THAT THE ORDER PASSED BY ASSESSING OFFICER IS NOT BARRED BY LIMITATION AS NO TICE U/S 143(2) WAS NOT ISSUED BY JURISDICTIONAL OFFICER WHO ISSUED THE NOTICE WAS NO T HAVING ANY JURISDICTION OVER THE CASE OF THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ASSESSED REGULARLY WITH ASSESSING OFFICER, WARD-2(3), ALWAR UNDER PAN NO. AABCD2447B . THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS FILED ON-LINE AS PER THE SC HEME OF THE GOVERNMENT. THEREAFTER, NOTICE U/S 143(2) WAS ISSUED BY DCIT, CIRCLE-5, JAI PUR (DESIGNATION OF THE OFFICER MENTIONED AS NIRDHARAN ADHIKARI MEANS ASSESSING OFFICER). THIS NOTICE U/S 143(2) 2 2 WAS ISSUED ON 8.9.2008, COPY OF WHICH IS PLACED AT PAGE 18 OF THE COMPILATION. THEREAFTER, DURING THE ASSESSMENT PROCEEDINGS THE A SSESSEE OBJECTED THAT NOTICE ISSUED U/S 143(2) WAS NOT ISSUED BY JURISDICTIONAL ASSESSING O FFICER, THEREFORE, NOTICE ISSUED IS BAD IN LAW. HOWEVER, THIS OBJECTION WAS NOT TAKEN INTO CONSIDERATION AND THE ASSESSMENT U/S 143(3) WAS COMPLETED BY ITO, WARD-3, ALWAR TO WHOM THE RECORDS WERE SENT LATER ON AFTER ISSUING NOTICE U/S 143(2) BY DCIT, CIRCLE-5, JAIPUR. VARIOUS ADDITIONS WERE MADE BY ASSESSING OFFICER WHILE COMPLETING ASSESSMENT VI DE ORDER DATE 16.12.2009. ASSESSEE PREFERRED AN APPEAL BEFORE CIT(A), BEFORE WHOM THE LEGAL GROUND AS WELL AS GROUND ON MERIT WERE TAKEN. THE LEGAL GROUND TAKEN BEFORE CI T(A) ARE AS UNDER:- II (I) THAT NO PROPER NOTICE U/S 143(2) OF THE INCO ME TAX ACT, 1961 WAS SERVED BY THE JURISDICTION OF ASSESSING OFFICER WIT HIN THE PRESCRIBED TIME AS PER PROVISO OF CLAUSE (II) OF SUB SECTION (2) OF SECTION 143 OF THE INCOME TAX ACT, 1961 (II) THAT THE LD. ASSESSING OFFICER ERRED IN NOT DI SPOSING OFF THE OBJECTION FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS . 4. DETAILED SUBMISSIONS WERE FILED BEFORE CIT(A). IT WAS SUBMITTED THAT JURISDICTION OF THE ASSESSEE LIES WITH THE ITO, WARD-2(3), ALWAR WHO HAS PASSED THE ASSESSMENT ORDER U/S 143(3). HOWEVER, NOTICE U/S 143(2) WAS ISSUED ON 8.9.2008 BY DCIT, CIRCLE-5, JAIPUR WHO HAS NO JURISDICTION OVER THE CASE OF THE ASSESS EE. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER WHO COMPLETED THE ASSESSMENT HAS NOT ISSUED ANY NOTICE U/S 143(2) WITHIN THE PRESCRIBED TIME LIMIT AS PROVIDED AS PER PROVISIONS OF CLAUSE (II) OF SUB SECTION (2) OF SECTION 143 OF THE ACT. THEREFORE, ASSESSME NT COMPLETED IS WITHOUT JURISDICTION AND THE SAME IS BAD IN LAW. RELIANCE WAS ALSO PLAC ED ON VARIOUS CASE LAWS. THE DATES SHOWING THAT WHEN THE NOTICE U/S 143(2) COULD BE IS SUED WERE ALSO MENTIONED. IT WAS SUBMITTED THAT NOTICE SHOULD HAVE BEEN ISSUED BEFOR E 30.09.2008. HOWEVER, ITO WARD- 3 3 2(3), ALWAR HAS ISSUED NOTICE ON 23.9.2009 WHICH IS BAR BY LIMITATION. THE EARLIER NOTICE ISSUED BY DCIT, CIRCLE-5, JAIPUR ON 8.9.2008 CANNOT BE TAKEN INTO CONSIDERATION BECAUSE THAT NOTICE WAS NOT ISSUED BY ASSESSING OFFICER WHO HAS JURISDICTION OVER THE CASE OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THIS IS NOT MERE AN IRREGULARITY AS ISSUE OF NOTICE U/S 143(2) OF THE ACT IS MANDATORY. THE PROVISION S OF LAW WERE ALSO EXPLAINED. 5. AFTER CONSIDERING THE SUBMISSION AND PERUSING TH E MATERIAL ON RECORD, THE CIT(A) GAVE FOLLOWING FINDINGS RECORDED IN PARA 4.3 OF HIS ORDER. 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS W ELL AS SUBMISSIONS OF THE ASSESSEE AND CASES RELIED UPON, IT IS FOUND THA T PAN WAS OWNED BY DCIT, CIRCLE-5, JAIPUR. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. THE NOTICE CAN BE GENERATED THROUGH SYSTEM BY THE D CIT, CIRCLE-5, JAIPUR ONLY. HE ISSUED THE NOTICE AND SERVED UPON THE ASS ESSEE ON 13.8.2008 WITHIN 6 MONTHS FROM THE DATE OF RETURN FILED BY TH E ASSESSEE. THE NOTICE ISSUED ON 23.09.2009 WAS MARE FORMALITY TO REGULARI ZE THE PROCEEDING AS CHANGE OF ASSESSING OFFICER. THIS CASE WAS TRANSFE RRED FROM DCIT, CRICLE-5, JAIPUR TO ITO, WARD-2(3) ALWAR ON TERRITO RIAL JURISDICTION. THIS TRANSFER OF CASE WAS WITHIN THE JURISDICTION AND NO PENALTY PROCEEDINGS TO THE ASSESSEE IS REQUIRED AS PER LAW. THE ASSESSEE RELIED UPON VARIOUS CASE LAWS THESE ARE NOT SQUARELY APPLICABLE AS THE FIRST CASE THE ASSESSING OFFICER HAD NOT ACCEPTED THE RETURN OF UNDISCLOSED INCOME, IN SECOND CASE IS RELEVANT TO WT, IN THIRD CASE IS RELEVANT TO NOT ICE 143(2) IS MANDATORY FOR ASSESSMENT, IN FOURTH CASE IS RELEVANT TO NOTIC E U/S 143(2) WAS NOT ISSUED BUT ISSUED U/S 142(1) AND IN FIFTH CASE IS R ELEVANT TO NOTICE WAS SERVED BEYOND TIME BUT IN THIS CASE NOTICE WAS PROP ERLY ISSUED IN PROPER TIME UNDER PROPER SECTION BY THE PROPER ASSESSING O FFICER WHO HAD OWNED THE PAN. THERE IS NO LEGAL REQUIREMENT IN LAW TO D ISPOSE OFF THE OBJECTION FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSME NT PROCEEDINGS. THE ONLY REMEDY IS AVAILABLE TO FILE APPEAL ON IT BEFOR E APPELLANT AUTHORITY. THEREFORE, BOTH THE GROUNDS OF APPEAL ARE DISMISSED . 6. THE ISSUE ON MERIT WAS PARTLY ALLOWED BY LD. CIT (A). NOW, ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL RAISING LEGAL GROUND AS WE LL AS GROUND ON MERIT. 7. THE CONTENTIONS RAISED BY THE COUNSEL OF THE ASS ESSEE BEFORE THE LD. CIT(A) WERE REITERATED HERE BEFORE THE TRIBUNAL. RELIANCE WAS PLACED ON VARIOUS CASE LAWS WHICH 4 4 WERE RELIED UPON BEFORE LD. CIT(A). COPIES OF SOME OF THE CASES ARE PLACED ON RECORD. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE OR DER OF LD. ASSESSING OFFICER AS WELL AS LD CIT(A). IT WAS FURTHER SUBMITTED THAT IN THIS CASE RETURN OF INCOME WAS FILED BY ASSESSEE ON-LINE AND AS PER PAN NUMBER, THE JURISDI CTION LIES WITH DCIT, CIRCLE-5, JAIPUR. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND AS SUCH NOTICE WAS ISSUED BY DCIT, CIRCLE-5, JAIPUR WITHIN TIME AND SERVED UP ON THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT AFTER KNOWING THAT ASSESSEE IS ASSES SED WITH ITO, WARD-2(3), ALWAR, THEN THE RETURN ALONG WITH NOTICE ISSUED WAS SENT TO HIM TO PASS ASSESSMENT ORDER. ACCORDINGLY, IT WAS ARGUED THAT AS THE CASE WAS SEL ECTED FOR SCRUTINY THROUGH CASS AND AT THAT TIME JURISDICTION LIES WITH DCIT, CIRCLE-5, JAIPUR, THEREFORE, NOTICE ISSUED BY DCIT, CIRCLE-5, JAIPUR WAS VALID WHICH WAS WITHIN T IME LIMIT PRESCRIBED UNDER THE LAW. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDER ED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE VARIOU S CASE LAWS ON WHICH RELIANCE WAS PLACED BY LD. AR, WE FOUND THAT ASSESSEE DESERVE TO SUCCEED ON THE LEGAL GROUND RAISED. THE ISSUANCE OF NOTICE U/S 143(2) WITHIN PRESCRIBED LIMIT BY THE ASSESSING OFFICER WHO HAS JURISDICTION OVER THE CASE IS MANDATORY. THE J URISDICTION OVER THE CASE WAS WITH ITO, WARD-2(3), ALWAR AND NOT WITH DCIT, CIRCLE-5, JAIPU R. THIS FACT IS VERIFIABLE FROM THE FACT THAT ASSESSEE IS FILING HIS RETURN OF INCOME WITH ITO, WARD-2(3), ALWAR. COPY OF RETURN FILED FOR ASSESSMENT YEAR 2005-06, IS PLACED IN THE PAPER BOOK AT PAGE 32. IT IS SEEN THAT THE ASSESSEE HAS MENTIONED ITS PAN NUMBER AS AABCD 2747B AND RETURN WAS RECEIVED IN THE OFFICE OF JCIT, RANGE-2, ALWAR ON 2 0.10.2005. IT IS FURTHER SEEN THAT ASSESSMENT FOR ASSESSMENT YEAR 2006-07 WAS COMPLETE D BY ITO, WARD-2(3), ALWAR WHO HAS ISSUED NOTICE U/S 143(2). THIS CASE WAS ALSO S ELECTED FOR SCRUTINY THROUGH CASS AND NOTICE U/S 143(2) WAS ISSUED FIXING THE CASE ON 29. 10.2008. THE COPY OF THE ASSESSMENT 5 5 ORDER DATED 24.12.2008 IS PLACED ON RECORD AT PAGE 33 OF THE PAPER BOOK. FROM THIS FACT ALONE, IT IS CLEARLY SEEN THAT THE JURISDICTION OVE R THE CASE OF THE ASSESSEE WAS WITH ITO, WARD-2(3) AND NOT WITH DCIT, CIRCLE-5, JAIPUR. WHY NOTICE U/S 143(2) WAS ISSUED BY DCIT, CIRCLE 5, JAIPUR IS NOT KNOWN AS DEPARTMENT C AN KNOW THIS FACT ALONE. NOTHING HAS BEEN BROUGHT ON RECORD ON BEHALF OF THE DEPARTM ENT THAT HOW THIS NOTICE WAS ISSUED BY DCIT, CIRCLE-5, JAIPUR AND NOT BY THE ASSESSING OFFICER, WARD-2(3), ALWAR WHO WAS HAVING JURISDICTION OVER THE CASE. REGARDING THE F ACT THAT JURISDICTION OVER THE CASE WAS WITH ITO, WARD-2(3), ALWAR WAS KNOWN TO THE DEPARTM ENT AND, THEREFORE, FOR THIS REASON ALONE THE RETURN OF THE ASSESSEE WAS SENT TO ITO, W ARD-2(3), ALWAR FOR PASSING ORDER. THE JURISDICTION OF THE INCOME TAX AUTHORITIES HAS BEEN PROVIDED BY SECTIONS 120 TO 124 OF THE ACT. IN SECTION 124, THE AREA OF A PARTICUL AR ASSESSING OFFICER HAS BEEN PRESCRIBED. IN SECTION 127, POWERS OF TRANSFER OF CASES HAVE BE EN GIVEN TO THE DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER AS THE CASE MAY BE, AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. IN THE PRES ENT CASE, NO SUCH ORDER HAS BEEN PASSED BY ANY OF THE AUTHORITY. IT IS NOT A CASE THAT ANY ORDER WAS PASSED FOR TRANSFERRING THE JURISDICTION FROM ITO, WARD-2(3), ALWAR TO DCIT, CI RCLE (5) AND AGAIN TRANSFERRING THE JURISDICTION FROM DCIT, CIRCLE-5, JAIPUR TO ITO, WA RD-2(3) ALWAR. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT IS CLEARLY ESTABLISHED THAT N O VALID NOTICE U/S 143(2) WAS ISSUED BY THE ASSESSING OFFICER WHO HAS JURISDICTION OVER THE CASE I.E. ITO, WARD-2(3), ALWAR. IN THE CASE OF CIT VS PAWAN GUPTA (2009) 318 ITR 32 2 (DELHI), THE HON'BLE HIGH COURT HAS HELD THAT ISSUANCE OF NOTICE U/S 143(2) I S MANDATORY AND THEREFORE, THE SAME IS TO BE ISSUED WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT. IN CASE OF CIT VS VISHNU & CO P. LTD (2009) 319 I TR 151 (DELHI), THE HON'BLE DELHI HIGH COURT HAS HELD THAT WHILE WE DO NOT ENTI RELY AGREE WITH THE ANALYSIS THAT THE 6 6 PROVISION BECOMES MANDATORY OR DIRECTORY DEPENDING UPON WHAT ACTION THE ASSESSING OFFICER TAKES, WE ARE IN AGREEMENT WITH CONCLUSION ARRIVED AT BY THE GAUHATI HIGH COURT, WE ARE OF THE VIEW, THAT SECTION 143(2) IS A MANDAT ORY PROVISION WHETHER WE LOOK AT IT FROM THE STANDPOINT OF A REGULAR ASSESSMENT OR FROM THE STANDPOINT OF AN ASSESSMENT UNDER CHAPTER XIV-B. 9. WE HAVE ALSO CONSIDERED VARIOUS OTHER CASE LAWS ALSO BY WHICH IT HAS BEEN HELD THAT ISSUANCE OF NOTICE U/S 143(2) WITHIN TIME PRES CRIBED UNDER THE LAW IS MANDATORY. SINCE THE NOTICE HAS NOT BEEN SENT BY THE ASSESSING OFFICER WITHIN TIME PRESCRIBED UNDER THE ACT, WE HAVE NOT HESITATION IN HOLDING THAT IMP UGNED ASSESSMENT COMPLETED U/S 143(3) WAS VOID ABNITIO AND THEREFORE, WE CANCEL TH E SAME. SINCE WE HAVE CANCELLED THE ASSESSMENT, THEREFORE, WE ARE NOT INCLINED TO DISPO SE OF THE GROUNDS ON MERIT. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 .5.2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11 TH MAY, 2012 RKK COPY TO/- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE