M/s. Oriental Clearing Agencies, Mumbai V. Deputy Commissioner of Income-tax,

ITA 1686/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7735 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Bogus purchase; Principle of natural justice; Period of limitation; Validity of assessment; Revised return; Reassessment proceedings
• Section: 143(3); 133A; 148; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S. 1686 TO 1689 /PUN/201 5 / ASSESSMENT YEAR S : 20 08 - 09 & 2009 - 10 M/S. ORIENTAL CLEARING AGENCIES, NO. 9, EMBASSY CENTER, NARIMAN POINT, MUMBAI 400021 PAN : AAAFO3975G ....... / APPELLANT / V S. DY. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUHAS P. BORA REVENUE BY : S HRI K.K. MISHRA / DATE OF HEARING : 1 4 - 08 - 2017 / DATE OF PRONOUNCEMENT : 18 - 0 8 - 2017 / ORDER PER VIKAS AWASTHY, JM : ITA NOS. 1686 & 1687/PUN/2015 ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10, RESPECTIVELY. BOTH THE 2 ITA NO S. 1686 TO 1689/PUN/2015 IMPUGNED ORDERS ARE DATED 23 - 11 - 2015. ITA NOS. 1688 & 1689/PUN/2015 ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE DATED 24 - 11 - 2015 COMMON FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 CONFIRMING LEVY OF PENALTY U/S. 271(1)(C) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT ) IN THE IMPUGNED ASSESSMENT YEARS. SINCE, THE ISSUES RAISED IN ALL THESE APPEALS ARE ARISING FROM SAME SET OF FACTS, THESE APPEALS ARE DISPOSED OF VIDE THIS COMMON ORDER. ITA NOS. 1686 & 1687/PUN/2015 (A.YS. 2008 - 09 & 2009 - 10) 2. THE BR IEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF CLEARING AGENT AND FREIGHT FORWARDERS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 ON 15 - 09 - 2008 DECLARIN G TOTAL INCOME OF RS.2,70,98,252/ - , AND FOR ASSESSMENT YEAR 2009 - 10 THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 28 - 09 - 2009 DECLARING TOTAL INCOME OF RS.4,37,46,700/ - . THE SAID RETURNS FILED BY THE ASSESSEE FOR RESPECTIVE ASSESSMENT YEARS WERE PROCESSED U/S. 143(1) OF THE ACT . THEREAFTER, A SURVEY ACTION U/S. 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 29 - 02 - 2012. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE HAS DEBITED CERTAIN NON - GENUINE BILLS. THE ASSESSEE FILED REVISED RETURN OF INCOME ON 02 - 07 - 2012 DECLARING TOTAL INCOME OF RS.7,70,16,794/ - IN ASSESSMENT YEAR 2008 - 09 AND RS.5,93,99,920/ - IN ASSESSMENT YEAR 2009 - 10. THE ABOVE SAID RETURNS FILED BY THE ASSESSEE WERE NON - EST AS THESE RETURNS WERE FILED BEYOND THE PERIOD OF LIMI TATION. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S. 148 OF THE ACT TO THE ASSESSEE ON 3 ITA NO S. 1686 TO 1689/PUN/2015 22 - 10 - 2012 FOR BOTH THE IMPUGNED ASSESSMENT YEARS. ON THE IMMEDIATE NEXT DAY I.E. 23 - 10 - 2012 , THE ASSESSING OFFICER ISSUED NOTICE U/S. 143(2) OF THE ACT. THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE ACT WAS PASSED BY THE ASSESSING OFFICER ON 29 - 10 - 2012 ACCEPTING THE INCOME RETURNED BY THE ASSESSEE VIDE RETURN OF INCOME FILED ON 02 - 07 - 2012. THEREAFTER, PENALTY PROCEEDINGS U/S. 271(1)(C) WERE ALSO INITIATE D AGAINST THE ASSESSEE AND PENALTY OF RS. 34,95,641/ - IN ASSESSMENT YEAR 2008 - 09 AND RS.53,20,254/ - IN ASSESSMENT YEAR 2009 - 10 WERE LEVIED FOR CONCEALMENT OF INCOME. AG AINST THE ASSESSMENT ORDERS FOR THE RESPECTIVE ASSESSMENT YEARS PASSED U/S. 143(3) R.W .S. 147, THE ASSESSEE FILED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING THE VALIDITY OF ASSESSMENT ORDERS . THE CONTENTION OF THE ASSESSEE WAS THAT ASSESSMENTS HAVE BEEN FRAMED ON NON - EST RETURNS AND WITHOUT ISSUING VALID NOTICE U/S . 143(2) OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF ASSESSEE AND UPHELD THE ASSESSMENT ORDERS. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN IMPUGNED ASSESSMENT YEARS UPHOLDING THE VALIDITY OF ASSESSMENT ORDERS PASSED U/S. 143(3) R.W.S. 147 OF THE ACT. 3. SHRI NIKHIL PATHAK & SHRI SUHAS P. BORA APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT CHRONOLOGY OF EVENTS WOULD SHOW THAT THE ASSESSING OFFICER HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE AND THE LAW LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER & ORS. REPORTED AS 259 4 ITA NO S. 1686 TO 1689/PUN/2015 ITR 19. THE LD. AR SUBMITTED THAT ADMITTEDL Y DURING THE COURSE OF SURVEY BOGUS PURCHASES WERE FOUND TO HAVE BEEN DEBITED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEARS. AFTER SURVEY THE ASSESSEE FILED RETURN OF INCOME ON 02 - 07 - 2012 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 OFFERING ADDITIONAL INC OME DECLARED DURING SURVEY. THE ASSESSEE ALSO PAID TAXES ON THE ADDITIONAL INCOME DECLARED. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S. 148 TO THE ASSESSEE ON 22 - 10 - 2012. A COPY OF THE NOTICE ISSUED U/S. 148 FOR ASSESSMENT YEAR 2008 - 09 IS AT P AGE 7 AND FOR ASSESSMENT YEAR 2009 - 10 IS AT PAGE 16 OF THE PAPER BOOK. ON THE IMMEDIATELY NEXT DAY I.E. 23 - 10 - 2012 , THE ASSESSING OFFICER ISSUED NOTICE U/S. 143(2) OF THE ACT. A COPY OF THE SAID NOTICE FOR ASSESSMENT YEAR 2008 - 09 IS AT PAGE 8 AND FOR ASS ESSMENT YEAR 2009 - 10 IS AT PAGE 17 OF THE PAPER BOOK. THE ASSESSMENT ORDERS FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 U/S. 143(2) R.W.S. 147 ACCEPTING THE INCOME RETURNED BY THE ASSESSEE VIDE RETURN OF INCOME DATED 02 - 07 - 2012 W ERE PASSED BY THE ASSESSING O FFICER ON 29 - 10 - 2012 I.E. WITHIN ONE WEEK FROM THE ISSUANCE OF NOTICE U/S. 148 OF THE ACT. 3.1 THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER DID NOT GRANT OPPORTUNITY TO THE ASSESSEE TO FILE OBJECTIONS AGAINST THE REASSESSMENT PROCEEDINGS. THUS, THE ASSESSING OFFICER VIOLATED THE LAW LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER & ORS. (SUPRA). THE ASSESSING OFFICER FURTHER VIOLATED THE TIME FRAME SET OUT BY THE HONBLE BOMBAY HIGH COU RT IN THE CASE OF ASIAN PAINTS LTD. VS. DEPUTY COMMISSIONER OF 5 ITA NO S. 1686 TO 1689/PUN/2015 INCOME TAX & ANR. REPORTED AS 296 ITR 90 TO PROCEED WITH THE ASSESSMENT. 3.2 THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT APPRECIATING THE FACTS THAT THE ASSESSING OFFICER HAS PASSED ASSES SMENT ORDERS U/S. 143(3) R.W.S. 147 IN VIOLATION OF THE PRINCIPLE S OF NATURAL JUSTICE AND THE PROVISIONS OF THE ACT UPHELD THE FINDINGS OF ASSESSING OFFICER. DURING FIRST APPELLATE PROCEEDINGS THE COMMISSIONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT. IN REMAND REPORT THE ASSESSING OFFICER MENTIONED THAT THE ASSESSEE VIDE LETTER DATED 25 - 10 - 2012 IN RESPONSE TO NOTICE U/S. 148 INTIMATED THAT THE REVISED RETURN FILED ON 02 - 07 - 2012 FOR RESPECTIVE ASSESSMENT YEARS BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ACCEPTING THE CONTENTIONS OF THE ASSESSING OFFICER IN REMAND REPORT. THE LD. AR REFERRED TO THE LETTER DATED 25 - 10 - 2012 WRITTEN O N BEHALF OF THE ASSESSEE TO ASSESSING OFFICER . THE SAID LETTERS FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 ARE AT PAGES 32 AND 34 OF THE PAPER BOOK , RESPECTIVELY . THE LD. AR POINTED THAT A PERUSAL OF THE SAID LETTER WOULD CLEARLY SHOW THAT THE ASSESSEE HAS NEVER CONVEYED TO THE ASSESSING OFFIC ER THAT REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 02 - 07 - 2012 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 BE TREATED AS RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT. THE ASSESSEE ONLY INFORMED THE ASSESSING OFFICER THAT THE ASSESS EE HAS FILED REVISED RETURN OF INCOME ON 02 - 07 - 2012 AND THE COPY AS SAME WAS SENT TO THE ASSESSING OFFICER FOR FURTHER REFERENCE. THERE WAS NO EXPRESSION IN THE LETTER INDICATING THAT THE RETURNS FILED ON 02 - 07 - 2012 6 ITA NO S. 1686 TO 1689/PUN/2015 BE TREATED AS RETURN OF INCOME IN RESPO NSE TO NOTICE ISSUED U/S. 148 OF THE ACT. 3.3 THE LD. AR SUBMITTED THAT EVEN IF IT IS PRESUMED THAT REVISED RETURN S OF INCOME FILED ON 02 - 07 - 2012 WERE INTENDED TO BE RETURNS IN RESPONSE TO NOTICE ISSUED U/S. 148 THE ASSESSING OFFICER WAS DUTY BOUND TO I SSUE NOTICE U/S. 143(2) OF THE ACT AFTER 25 - 10 - 2012 WHEN THE ASSESSEE COMMUNICAT ED HIS INTENTION TO TREAT THE RETURNS FILED ON 02 - 07 - 2012 AS RETURNS IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT. 3.4 THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER H AS CONCLUDED THE ENTIRE PROCEEDINGS U/S. 147 R.W.S. 148 WITHIN ONE WEEK IN A HURRIEDLY MANNER. ALL THE PROCEDURES SET OUT UNDER LAW WERE LAID TO REST. IN THE NOTICE DATED 22 - 10 - 2012 ISSUED U/S. 148 THE ASSESSING OFFICER HAD CATEGORICALLY GRANTED 30 DAYS TIME TO FILE RETURN IN THE PRESCRIBED FORM . I N STEAD OF WAITING FOR THE TIME GIVEN IN THE SAID NOTICE TO ELAPSE , THE ASSESSING OFFICER ISSUED NOTICE U/S. 143(2) TO THE ASSESSEE ON VERY NEXT DAY I.E. 23 - 10 - 2012. A PERUSAL OF THE NOTICE U/S. 143(2) WOULD CL EARLY SHOW THAT THERE IS A REFERENCE OF REVISED RETURN FILED BY THE ASSESSEE ON 02 - 07 - 2012. HOWEVER, THE SAID RETURNS FOR BOTH THE ASSESSMENT YEARS UNDER APPEAL WERE NON - EST AS THEY WERE FILED BEYOND THE PERIOD OF LIMITATION. ANY ASSESSMENT MADE ON NON - E ST RETURN IS IN VALID AND IS THEREFORE LIABLE TO BE SET ASIDE. 3.5 IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS : 7 ITA NO S. 1686 TO 1689/PUN/2015 I . ASSTT. COMMISSIONER OF INCOME TAX VS. M/S. KIRTI AGROVET LTD. IN ITA NO. 1029/PUN/2015 FOR ASSESSMEN T YEAR 2009 - 10 DECIDED ON 26 - 05 - 2017; II . SHRI AJAY SHANTILAL LALWANI VS. INCOME TAX OFFICER IN ITA NO. 145/PN/2015 FOR ASSESSMENT YEAR 2005 - 06 DECIDED ON 25 - 11 - 2016; III . SHRI ASHOK JAYARAM JADHAV VS. INCOME TAX OFFICER IN ITA NO. 887/PN/2013 FOR ASSESSMENT YEAR 2 008 - 09 DECIDED ON 30 - 12 - 2015; AND IV . SHRI G.N. MOHAN RAJU VS. INCOME TAX OFFICER IN ITA NOS. 242 & 243/BANG/2013 FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 DECIDED ON 10 - 10 - 2014. 4. ON THE OTHER HAND SHRI K.K. MISHRA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDERS. THE LD. DR SUBMITTED THAT THE CASE LAWS FURNISHED BY THE ASSESSEE IN SUPPORT OF HIS CONTENTIONS ARE DISTINGUISHABLE ON FACTS AND EVEN THE DECISION OF HONBLE SUPREME CO URT OF INDIA IN THE CASE GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER & ORS. (SUPRA) WOULD NOT APPLY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THE INSTANT CASE, THE NOTICE U/S. 148 WAS ISSUED ON ORIGINAL RETURN OF INCOME FILED BY THE A SSESSEE. NO REQUEST WAS MADE BY THE ASSESSEE TO PROVIDE COPY OF REASONS FOR RE - OPENING. THE NOTICE U/S. 148 AND THE NOTICES ISSUED U/S. 143(2) WERE ISSUED TO THE ASSESSEE TO REGULARIZE THE RETURN S OF INCOME FILED BY THE ASSESSEE ON 02 - 07 - 2012. PROPER O PPORTUNITY WAS GIVEN TO THE ASSESSEE. THE ADDITIONAL INCOME ADMITTED BY THE ASSESSEE DURING COURSE OF SURVEY AND INCOME RETURNED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME 8 ITA NO S. 1686 TO 1689/PUN/2015 FILED ON 02 - 07 - 2012 WERE ACCEPTED BY THE ASSESSING OFFICER IN PROCEEDINGS U/S. 143(3) R.W.S. 147 OF THE ACT. THEREFORE, NO PREJUDICE IS CAUSED TO THE ASSESSEE. THE LD. DR PRAYED FOR DISMISSING BOTH THE APPEALS OF THE ASSESSEE AND UPHOLDING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 5. THE LD. AR CONTROVERTING THE SUBMIS SIONS MADE ON BEHALF OF THE DEPARTMENT SUBMITTED THAT THE ASSESSEE IS NOT CHALLENGING ISSUANCE OF NOTICE U/S. 148 OR INVOKING OF REASSESSMENT PROCEEDINGS. THE ASSESSEE IS AGGRIEVED AGAINST THE REASSESSMENT PROCEEDINGS AFTER THE ISSUANCE OF NOTICE U/S. 148 . THE MANNER IN WHICH REASSESSMENT PROCEEDINGS ARE CARRIED OUT WITHOUT GRANTING OPPORTUNITY OF HEARING TO THE ASSESSEE AND WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSEE TO RAISE OBJECTIONS AGAINST REASSESSMENT PROCEEDINGS IS NOT IN ACCORDANCE WITH THE PRO VISIONS OF THE ACT AND THE LAW LAID DOWN BY THE HONBLE APEX COURT. 6. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . WE HAVE ALSO EXAMINED THE DOCUMENTS PLACED ON RECORD B Y THE ASSESSEE AND THE DECISIONS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE IN SUPPORT OF HIS CONTENTIONS. BEFORE DECIDING THE CONTROVERSY RAISED BY THE ASSESSEE IN BOTH THE APPEALS IT WOULD BE RELEVANT TO HAVE A QUICK GLANCE AT THE LIST OF D ATE AND EVENTS : DATE EVENTS 1 5 - 09 - 2008 RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2008 - 09. 28 - 09 - 2009 RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2009 - 10. 09 - 11 - 2010 ASSESSMENT ORDER U/S. 143( 3 ) PASSED FOR ASSESSMENT YEAR 2008 - 09. 9 ITA NO S. 1686 TO 1689/PUN/2015 11 - 04 - 2011 ASSESSMENT ORDER U/S. 143(3) PASSED FOR ASSESSMENT YEAR 2009 - 10. 29 - 02 - 2012 SURVEY ACTION U/S. 133A OF THE ACT. 02 - 07 - 2012 REVISED RETURN OF INCOME FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 22 - 10 - 2012 SEPARATE NOTICES U/S. 148 ISSUED FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 23 - 10 - 2012 SEPARATE NOTICES U/S. 143(2) ISSUED FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 29 - 10 - 2012 ASSESSMENT ORDERS U/S. 143(3) R.W.S. 147 PASSED FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. 7. AFTER SURVEY ACTION THE ASSESSEE FILED REVISED RETURN OF INCOME ON 02 - 07 - 2012 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 OFFERING ADDITIONAL INCOME DECLARED DURING SURVEY. OSTENSIBLY, THE ASSESSEE PAID TAXES ON ADDITIONAL INCOME OFFERED IN THE REVISED RETUR N OF INCOME. UNDISPUTEDLY, THE REVISED RETURN FILED BY THE ASSESSEE FOR BOTH THE IMPUGNED ASSESSMENT YEARS WERE BEYOND THE PERIOD OF LIMITATION AND HENCE, WERE NON - EST. THE ASSESSING OFFICER ISSUED NOTICES U/S. 148 ON 22 - 10 - 2012 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 AND IMMEDIATELY ON THE NEXT DAY I.E. 23 - 10 - 2012 THE ASSESSING OFFICER ISSUED NOTICES U/S. 143(2) FOR BOTH THE AFORESAID ASSESSMENT YEARS. THE ASSESSEE HAD ABSOLUTELY NO OPPORTUNITY TO ASK FOR THE REASONS FOR ISSUING NOTICE U/S. 148 AND TO FILE OBJECTIONS . ISSUANCE OF NOTICES U/S. 148 AND U/S. 143(2) IN QUICK SUCCESSION WITHIN A GAP OF ONE DAY CLEARLY SPEAKS VOLUME OF HASTE IN THE MIND OF ASSESSING OFFICER IN COMPLETING REASSESSMENT PROCEEDINGS . THIS FACT IS FURTHER EVIDENT BY THE ASSESSME NT ORDER PASSED WITHIN A PERIOD OF ONE WEEK ON 29 - 10 - 2012. 10 ITA NO S. 1686 TO 1689/PUN/2015 8. THE SEQUENCE OF EVENTS NARRATED ABOVE CLEARLY INDICATE THAT THE ASSESSMENT FRAMED U/S. 143(3) R.W.S. 147 IN BOTH THE ASSESSMENT YEARS ARE AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THE LAW LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE GKN DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER & ORS. (SUPRA). 9. THE ASSESSEE VIDE LETTER DATED 25 - 10 - 2012 COMMUNICATED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS FILED REVISED RETURN OF INCOME ON 02 - 07 - 2012. THE CONTENTS OF THE SAID LETTER ARE REPRODUCED HERE - IN - BELOW : THIS IS REFERENCE WITH THE NOTICE ISSUED BY YOU UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 DATED 22 - 10 - 2012 FOR AY 2009 - 10. PLEASE NOTE THAT MY CLIENT ORIENTAL CLEARING AGENCIES HAS ALREADY FILED REVISED INCOME TAX RETURN ON 02 - 07 - 2012. COPY OF THE SAME IS ENCLOSED FOR YOUR READY REFERENCE. KINDLY LET ME KNOW IF YOU NEED ANY MORE DETAILS TO COMPLETE THE ASSESSMENT. A PERUSAL OF THE SAID LETTER CLEARLY INDIC ATES THAT NOWHERE IN THE LETTER THE ASSESSEE HAS GIVEN CONCESSION THAT THE RETURN FILED ON 02 - 07 - 2012 BE TREATED AS RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT. SUCH INFERENCE HAS BEEN DRAWN BY THE ASSESSING OFFICER JUST TO CO MPLETE THE FORMALITIES TO HIS UNDERSTANDING. EVEN IF IT IS PRESUMED THAT THE CONTENTS OF THE AFORESAID LETTER IN ANYWAY COMMUNICATE THAT THE RETURN FILED ON 02 - 07 - 2012 IS TO BE TREATED AS RETURN IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT , T HE ASSESS ING OFFICER THEREAFTER WAS REQUIRED TO ISSUE NOTICE U/S. 143(2) OF THE ACT . IN THE PRESENT CASE THE ASSESSING OFFICER HA D ISSUED NOTICE 11 ITA NO S. 1686 TO 1689/PUN/2015 U/S. 143(2) ON 23 - 10 - 2012 I.E. PRIOR TO THE DATE OF COMMUNICATION SENT BY ASSESSEE IN RESPONSE TO NOTICE ISSUED U/S. 14 8 OF THE ACT INTIMATING THAT REVISED RETURN HAS BEEN FILED ON 02 - 07 - 2012. THE ASSESSING OFFICER AGAIN COMMITTED ERROR IN TREATING THE NOTICES ISSUED U/S. 143(2) PRIOR TO THE DATE OF LETTER I.E. 25 - 07 - 2012 AS VALID NOTICE U/S. 143(2) OF THE ACT . A PERUSAL OF THE NOTICE ISSUED U/S. 143(2) AT PAGES 8 AND 17 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10, RESPECTIVELY SHOW THAT THE SAID NOTICE HAS BEEN ISSUED WITH REFERENCE TO RETURNS OF INCOME FILED ON 02 - 07 - 2012, WHICH TILL THAT TIME WERE NON - EST RETURNS. 1 0 . IS SUANCE OF STATUTORY NOTICE U/S. 143(2) OF THE ACT IS NOT MERELY A FORMALITY. THE LEGISLATION IN ITS WISDOM HAS SET OUT THE PROCEDURES UNDER THE PROVISIONS OF THE ACT TO BE COMPLIED WITH IN THE MANNER IN WHICH THEY ARE INTENDED TO BE . NO DOUBT RULES OF PROCEDURES ARE HANDMAID OF JUSTICE, BUT THE FACT REMAINS THAT THE OBJECT OF PRESCRIBING PROCEDURES IS TO ADVANCE THE CAUSE OF JUSTICE. IN THE PRESENT CASE, THE TAX ADMINISTRATING AUTHORITIES BYPASS ED THE PROCEDURES AND TREATED THE SAME AS MERE FORMALITIES . THE ASSESSING OFFICER AFTER HAVING ISSUED NOTICE U/S. 148 SHOULD HAVE AT LEAST WAITED FOR THE TIME GIVEN IN THE NOTICE I.E. 30 DAYS FOR THE REACTION OF THE ASSESSEE, BEFORE PROCEEDING FURTHER. INSTEAD THE ASSESSING OFFICER ISSUED NOTICE U/S. 143(2) ON THE VERY NEXT DAY. THE ACTION OF THE ASSESSING OFFICER WAS CLEARLY VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE . 1 1 . THE ASSESSING OFFICER AFTER HAV ING RECEIVED LETTER DATED 25 - 07 - 2012 FROM ASSESSEE MERELY MENTIONING THAT THE REVISED RETURN HAS ALREAD Y BEEN FILED ON 02 - 07 - 2012 , T HE ASSESSING OFFICER TREATED THE SAME AS 12 ITA NO S. 1686 TO 1689/PUN/2015 CONSENT OF THE ASSESSEE TO TREAT THE RETURN FILED ON 02 - 07 - 2012 AS RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S. 148 OF THE ACT. THEREAFTER, WITHOUT ISSUING FURTHER NOTICE U/S. 14 3(2) THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT. IN OUR CONSIDERED VIEW ISSUANCE OF NOTICE U/S. 143(2) AFTER SUCH CONSENT IS MANDATORY. ASSESSMENT COMPLETED WITHOUT ISSUING VALID NOTICE U/S. 143(2) IS FATAL. NO NOTICE U/S. 143(2) CAN BE ISSUE D IN RESPECT OF NON - EST RETURN OF INCOME. THE NOTICE ISSUED BY ASSESSING OFFICER U/S. 143(2) ON 23 - 10 - 2012 I.E. PRIOR TO THE DATE OF SO CALLED CONSENT LETTER BY ASSESSEE IS NOT A VALID NOTICE. OUR THIS VIEW IS FURTHER FORTIFIED BY THE DECISION RENDERED B Y BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI G.N. MOHAN RAJU VS. INCOME TAX OFFICER (SUPRA). THE RELEVANT EXTRACT OF THE FINDINGS OF THE TRIBUNAL IN THE SAID CASE ARE AS UNDER : .THERE IS NO PROVISION IN THE ACT, WHICH WOULD ALLOW AN AO T O TREAT THE RETURN WHICH WAS ALREADY SUBJECT TO A PROCESSING U/S 143(1) OF THE IT ACT, AS A RETURN FILED PURSUANT TO A NOTICE SUBSEQUENTLY ISSUED U/S 148 OF THE ACT. HOWEVER, ONCE AN ASSESSEE ITSELF DECLARE BEFORE THE AO THAT HIS EARLIER RETURN COULD BE TR EATED AS FILED PURSUANT TO NOTICE U/S 148 OF THE IT ACT, THREE RESULTS CAN FOLLOW. ASSESSING OFFICER CAN EITHER SAY NO, THIS WILL NOT BE ACCEPTED, YOU HAVE TO FILE A FRESH RETURN OR HE CAN SAY THAT 30 DAYS TIME PERIOD BEING OVER I WILL NOT TAKE COGNIZANCE OF YOUR REQUEST OR HE HAS TO ACCEPT THE REQUEST OF THE ASSESSEE AND TREAT THE EARLIER RETURNS AS ONE FILED PURSUANT TO THE NOTICE U/S 148 OF THE IT ACT. IN THE FORMER TWO SCENARIOS, AO HAS TO FOLLOW THE PROCEDURE SET OUT FOR A BEST OF JUDGMENT ASSESSMENT A ND CANNOT MAKE AN ASSESSMENT UNDER SECTION 143(3). ON THE OTHER HAND, IF THE AO CHOSE TO ACCEPT ASSESSEES REQUEST, HE CAN INDEED MAKE AN ASSESSMENT UNDER SECTION 143(3). IN THE CASE BEFORE US, ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) READ WITH SECT ION 147. OR IN OTHER WORDS AO ACCEPTED THE REQUEST OF THE ASSESSEE. THIS IN TURN MAKES IT OBLIGATORY TO ISSUE NOTICE U/S 143(2) AFTER THE REQUEST BY THE ASSESSEE TO TREAT HIS EARLIER RETURN AS FILED IN PURSUANCE TO NOTICES U/S 148 OF THE IT ACT WAS RECEIVE D. THIS REQUEST, IN THE GIVEN CASE, HAS BEEN MADE ONLY ON 05 - 10 - 2010. ANY ISSUE 13 ITA NO S. 1686 TO 1689/PUN/2015 OF NOTICE PRIOR TO THAT DATE CANNOT BE TREATED AS A NOTICE ON A RETURN FILED BY THE ASSESSEE PURSUANT TO A NOTICE U/S 148 OF THE ACT. OR IN OTHER WORDS, THERE WAS NO VALID ISSU E OF NOTICE U/S 143(2) OF THE IT ACT, AND THE ASSESSMENTS WERE DONE WITHOUT FOLLOWING THE MANDATORY REQUIREMENT U/S 143(2) OF THE IT ACT. THIS IN OUR OPINION, RENDER THE SUBSEQUENT PROCEEDINGS ALL INVALID. 1 2 . IN THE INSTANT CASE, SINCE, NO VALID NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE, THE SUBSEQUENT ASSESSMENT PROCEEDINGS ARE THEREFORE, VITIATED. THE ASSESSMENT ORDERS PASSED IN THE IMPUGNED ASSESSMENT YEARS ARE THUS LIABLE TO BE QUASHED. ACCORDINGLY, T HE APPEALS OF THE ASSESSEE ARE ALLOWED AND THE IMPUGNED ORDERS ARE SET ASIDE. ITA NOS. 168 8 & 168 9 /PUN/2015 (A.YS. 2008 - 09 & 2009 - 10) 13. IN CON SEQUENCE TO THE ASSESSMENT ORDERS PASSED U/S. 143(3) R.W.S. 147 OF THE ACT FOR THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 , PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED AGAINST THE ASSESSEE. PENALTY OF RS.34,95,641/ - IN ASSESSMENT YEAR 2008 - 09 AND RS.53,20,254/ - IN ASSESSMENT YEAR 2009 - 10 WERE LEVIED FOR CONCEALMENT OF INCOME. AGGRIEVED BY THE ORDERS LEVYING PENALTY THE ASSESSEE FILED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE LEVY OF PENALTY. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUN AL AGAINST CONFIRMING OF LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. SINCE, WE HAVE ALREADY HELD THAT THE ASSESSMENT PROCEEDINGS ARE INVALID, THE SUBSTRATUM FOR LEVY OF PENALTY HAS ERODED. THEREFORE, THERE IS NO QUESTION OF LEVY OF PENALTY WITHOUT THERE BEING ANY VALID 14 ITA NO S. 1686 TO 1689/PUN/2015 ASSESSMENT. ACCORDINGLY, THE IMPUGNED ORDER CONFIRMING LEVY OF PENALTY IS SET ASIDE AND THE APPEALS OF THE ASSESSEE ARE ALLOWED. 14. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUN CED ON FRIDAY, THE 18 TH DAY OF AUGUST, 201 7 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 18 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3, PUNE 4. THE PR. CIT - 2, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE