DCIT, Circle-6, Kolkata V. NICCO UCO Alliance Credit Ltd., Kolkata

ITA 1715/KOL/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6658 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 15-07-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 07-10-2009
• Court: TRIBUNAL
• Department Lawyers: A MUKHERJEE
• Assessee Lawyers: S L KOCHAR
• Keywords: Reasonable cause; Procedural lapse; Block assessment; Condonation of delay; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 15; 139

Judgement Text

1 , B , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B , KO LKATA [ . . . . . . . . , ,, , , !' ] [BEFORE SHRI B.R.MITTAL, JUDICIAL MEMBER & SRI AKBER BASHA, ACCO UNTANT MEMBER] # # # # / ITA NOS. 1715, 1867 & 1869 (KOL) OF 2009 $%& '( / ASSESSMENT YEARS 2000-01, 2001-02 & 2003-04 DY.COMMISSIONER OF INCOME-TAX CIRCLE-6, KOLKATA . NICCO UCO ALLIANCE CREDIT LTD. KOLKATA. (PAN-AABCN5012H) (+, / APPELLANT ) - % - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 !/ FOR THE APPELLANT: SMT. A.MUKHERJEE /0+, 1 2 ! / FOR THE RESPONDENT: SRI S.L. KOCHAR ! / ORDER PER BENCH : THESE ARE THE APPEALS FILED BY THE DEPARTMENT FOR ASSESSMENT YEARS 2000-01, 2001-02 AND 2003-04 AGAINST THE ORDERS OF LD. C.I. T.(A)-VI, KOLKATA, DATED 07/7/2009, 06/8/2009 AND 10/8/2009 RESPECTIVELY. 2. THE APPEAL FILED FOR ASSESSMENT YEAR 2000-01 IS TIME BARRED BY TWO DAYS AND THE DEPARTMENT HAS FILED THE APPLICATION FOR CONDONATIO N OF DELAY. AT THE TIME OF HEARING, THE LD. A/R HAS NOT DISPUTED THE REASONS GIVEN BY T HE DEPARTMENT IN THE APPLICATION FOR CONDONATION OF DELAY AND THE LD. DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT THE DELAY WAS DUE TO A REASONABLE CAUSE. AFTER CONSIDERING T HE SUBMISSIONS OF THE LEARNED REPRESENTATIVE OF THE PARTIES AND THE APPLICATION F OR CONDONATION OF DELAY DATED 07/10/2009, WE DECIDED TO CONDONE THE DELAY AND TO ENTERTAIN THE APPEAL ON MERIT. 3. ALL THESE APPEALS ARE ARISING OUT OF THE REASSE SSMENT ORDERS PASSED BY THE A.O. U/S. 147/143(3) OF THE I.T. ACT, 1961. THERE IS NO DISPUTE TO THE FACT THAT THE A.O. RECORDED REASONS BEFORE INITIATING REASSESSMENT PRO CEEDINGS AND THE SAID ISSUE OF INITIATION OF REASSESSMENT PROCEEDINGS IS NOT BEFOR E US. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE FILED THE RETURNS PURSUANT TO NOTICES ISSU ED U/S. 148 OF THE ACT. 2 4. IN ALL THESE APPEALS THERE IS A COMMON ISSUE AS TO WHETHER THE LD. C.I.T.(A) HAS ERRED TO HOLD THAT THE REASSESSMENT PROCEEDINGS ARE INVALID AS THE A.O. HAD NOT ISSUED NOTICE U/S. 143(2) OF THE ACT FOR ALL THE ASSESSMEN T YEARS UNDER CONSIDERATION, AFTER INITIATION OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE ACT. 5. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL RE PRESENTATIVE SUBMITTED THAT NON- ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT DOES NOT MAKE THE REASSESSMENTS INVALID AS THE ASSESSEE WAS AFFORDED REASONABLE OPPORTUNITY BY THE A.O. BEFORE PASSING THE ASSESSMENT ORDERS FOR ALL THE ASSESSMENT YEARS UNDE R CONSIDERATION. THE LD. DEPARTMENTAL REPRESENTATIVE RELYING ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF AREVA T & D INDIA LTD. VS. ACIT [294 ITR 23 3 (MAD)] SUBMITTED THAT FAILURE TO ISSUE NOTICE U/S. 143(2) OF THE ACT IS MERELY A PRO CEDURAL IRREGULARITY AND DOES NOT VITIATE THE ASSESSMENT ORDERS. THE LD. DEPARTMENTA L REPRESENTATIVE FURTHER SUBMITTED THAT SIMILAR ISSUE HAS BEEN CONSIDERED BY I.T.A.T., MUMBAI BENCH IN THE CASE OF KIRAN NAGJI NISAR VS. ITO [114 ITD 319 (MUM)] AND BY I.T. A.T., JODHPUR BENCH IN THE CASE OF HARI SINGH & ASSOCIATES VS. ITO [118 ITD 564 (JODH. )] WHEREIN IT HAS BEEN HELD THAT IF NO NOTICE U/S/ 143(2) OF THE ACT HAS BEEN ISSUED BE FORE PASSING THE REASSESSMENT ORDERS, IT IS ONLY A PROCEDURAL IRREGULARITY AND TH E SAME COULD BE SET RIGHT BY RESTORING THE MATTER TO THE FILE OF THE A.O. FOR A FRESH DECI SION AFTER ISSUING NOTICE U/S. 143(2) OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO REFERRED THE PROVISIONS OF SEC. 293BB OF THE ACT AND SUBMITTED THAT THE REASSESSMEN T ORDER CANNOT BE HELD TO BE INVALID IF THE ASSESSEE HAD NOT RAISED SUCH AN OBJE CTION IN RESPECT OF NOTICE BEFORE COMPLETION OF REASSESSMENT. 6. ON THE OTHER HAND, THE LD. A/R SUPPORTED THE OR DERS OF LD. C.I.T.(A). HE SUBMITTED THAT THE LD. C.I.T.(A) CALLED FOR A REMAN D REPORT FROM THE A.O. AND THE A.O. IN HIS REPORT SPECIFICALLY STATED THAT NOTICE U/S. 143 (2) OF THE ACT WAS NOT ISSUED AFTER ISSUING OF NOTICE U/S. 148 OF THE ACT. THE LD. A/R SUBMITTED THAT THE SIMILAR ISSUE HAD BEEN CONSIDERED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. C. PALANIAPPAN [284 ITR 257 (MAD)] WHEREIN IT WAS SPECIFICALLY HEL D THAT COMPLETION OF REASSESSMENT, AFTER REOPENING OF THE ASSESSMENT U/S. 147 OF THE A CT, WITHOUT ISSUE OF NOTICE U/S. 143(2) WITHIN 12 MONTHS IS NOT VALID. THE LD. A/R SUBMITTED THAT I.T.A.T., LUCKNOW BENCH 3 HAS RECENTLY CONSIDERED THE SAME ISSUE VIDE ITS ORD ER DATED 17/1/2011 IN ITA NO. 699 (LKW)/2010 IN THE CASE OF DCIT VS. K.M. SUGAR MILLS LTD., A COPY OF WHICH HAS BEEN FILED BY THE ASSESSEE BEFORE US, AND THE TRIBUNAL AFTER C ONSIDERING THE DECISION OF HONBLE APEX COURT IN THE CASE OF ACIT VS. HOTAL BLUE MOON [321 ITR 362 (SC)] AND THE DECISION OF HONBLE ALLAHABAD HIGH COURT (LUCKNOW BENCH) IN THE CASE OF CIT VS. RAJEEV SHARMA [(2010) 232 CTR 303 (ALL)/192 TAXMAN 197] HAVE HELD THAT PROVISION CONTAINED IN SEC. 143(2) OF THE ACT IS MANDATORY IN NATURE AND IT IS OBLIGATORY FOR THE A.O. TO ISSUE NOTICE U/S. 143(2) OF THE ACT BEFORE PROCEEDING TO DECIDE THE CONTROVERSY REGARDING ESCAPED ASSESSMENT AND NON-ISSUANCE OF NOTICE U/S. 143(2) O F THE ACT AFTER FILING OF RETURN BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 OF THE ACT VITIATES THE REASSESSMENT PROCEEDINGS. THE LD. A/R FURTHER SUBMITTED THAT SI MILAR ISSUE HAD ALSO BEEN CONSIDERED BY SPECIAL BENCH OF I.T.A.T., DELHI IN THE CASE OF RAJ KUMAR CHAWLA VS. ITO [94 ITD 1 (SB-DEL)], WHEREIN IT WAS HELD THAT ISSUANCE OF NOT ICE U/S. 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED, TO THE RETURN FILED PURSUANT TO SE C. 148 OF THE ACT IS MANDATORY AND IF SUCH A NOTICE IS NOT ISSUED WITHIN THE TIME PRESCRI BED, THE ASSESSMENT IS A NULLITY. THE LD. A/R FURTHER REFERRED THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CW T VS. HUF OF H.H. LATE J.M.SCINDIA [300 ITR 193 (BOM)] AN D SUBMITTED THAT IN THE SAID CASE THE REASSESSMENT PROCEEDING WAS INITIATED UNDER THE WEALTH-TAX ACT, 1957 AND THE A.O. COMPLETED THE ASSESSMENT WITHOUT ISSUING NOTICE U/S . 16(2) OF THE W.T. ACT WITHIN THE TIME PRESCRIBED UNDER THE PROVISION AND IN THE SAID CIRCUMSTANCES IT WAS HELD THAT THE REASSESSMENT WAS NOT VALID. HE SUBMITTED THAT THE PROVISIONS OF SEC. 16(2) OF W.T. ACT ARE IN PARI MATERIA WITH THE PROVISIONS OF SEC. 143 (2) OF I.T. ACT. THE LD. A/R ALSO PLACED RELIANCE ON THE DECISION OF HONBLE GAUHATI HIGH CO URT IN THE CASE OF SMT. BANDANA GOGOI VS. CIT [289 ITR 28 (GAU)] AND SUBMITTED THAT IN TH E SAID CASE ALSO WHEN THE A.O. FAILED TO ISSUE NOTICE U/S. 143(2) OF THE ACT AFTER THE BL OCK RETURN WAS FILED BY THE ASSESSEE, IT WAS HELD THAT THE RETURN FILED BY THE ASSESSEE BECA ME FINAL AND NO SCRUTINY PROCEEDING COULD BE STARTED IN RESPECT OF THAT RETURN AS THE A .O. FAILED TO ISSUE NOTICE U/S. 143(2) OF THE ACT WITHIN THE STIPULATED TIME. 6.1. THE LD. A/R FURTHER SUBMITTED THAT THE PROVIS IONS OF SEC. 292BB OF THE ACT REFERRED TO BY THE LD. DEPARTMENTAL REPRESENTATIVE ARE NOT APPLICABLE TO THE CASE OF THE 4 ASSESSEE AS IN THE INSTANT CASES NO NOTICE AT ALL U /S. 143(2) OF THE ACT WAS ISSUED BY THE A.O. AND WHEREAS SEC. 292BB OF THE ACT INSERTED BY FINANCE ACT, 2008 W.E.F. 1 ST APRIL, 2008 DEALS ONLY THAT THE NOTICE WILL BE DEEMED TO B E VALID IN CASE THE NOTICE HAS BEEN ISSUED BY THE A.O. BUT IT IS NOT SERVED UPON THE AS SESSEE OR NOTICE NOT SERVED UPON HIM IN TIME OR THE NOTICE HAS BEEN SERVED BUT NOT PROPERLY . THE LD. A/R FURTHER SUBMITTED THAT EVEN OTHERWISE PROVISIONS OF SEC. 292BB OF THE ACT DO NOT APPLY TO THE ASSESSMENT YEARS UNDER CONSIDERATION AS THE SAME HAS BEEN EFFECTED F ROM ASSESSMENT YEAR 2008-09. HE SUBMITTED THAT THE ORDERS OF THE LD. C.I.T.(A) SHOU LD BE CONFIRMED AND THAT REASSESSMENT ORDERS PASSED BY THE A.O. ARE INVALID. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND ORDERS OF THE AUTHORITIES BELOW. W E HAVE ALSO GONE THROUGH THE CASES CITED BY THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE RELEVANT PROVISIONS OF THE ACT. AT THE OUTSET WE AGREE WITH THE LD. A/R THAT THE PROVISIONS OF SEC. 292BB OF THE ACT DO NOT APPLY TO THE FACTS OF THE CASES BEFORE U S AS IN THE CASES BEFORE US THERE IS NO DISPUTE THAT THE A.O. DID NOT ISSUE NOTICE AT ALL U /S. 143(2) OF THE ACT AND WHEREAS PROVISIONS OF SEC. 292BB OF THE ACT DEAL ONLY IN RE SPECT OF THE IRREGULARITIES IN SERVING OF NOTICE ON THE ASSESSEE. HENCE THE CONTENTION OF TH E LD. DEPARTMENTAL REPRESENTATIVE HAS NO MERIT THAT THE ASSESSEE CANNOT QUESTION THE VALIDITY OF NOTICE IN THE APPELLATE PROCEEDINGS AS THE ASSESSEE FAILED TO TAKE ANY OBJE CTION BEFORE THE A.O. THAT THE NOTICE WAS NOT SERVED UPON IT PROPERLY OR IN TIME OR SERVE D IN AN IMPROPER MANNER. MOREOVER, THE SAID PROVISION HAS BEEN INSERTED BY THE FINANCE ACT, 2008 W.E.F. 1 ST APRIL, 2008, I.E. APPLICABLE FOR ASSESSMENT YEAR 2008-09 AND WHEREAS THE ASSESSMENT YEARS UNDER CONSIDERATION ARE 2000-01, 2001-02 AND 2003-04. 8. NOW COMING TO THE ISSUE AS TO WHETHER NON-ISSUA NCE OF NOTICE U/S. 143(2) OF THE ACT GOES TO THE VERY ROOT OF THE VALIDITY OF THE RE ASSESSMENT ORDER OR NOT, WE FIND THAT BY VIRTUE OF SEC. 143(2) OF THE ACT, THE ASSESSES H AVE BEEN GIVEN OPPORTUNITY TO SUBSTANTIATE THE RETURN FILED. AS PER PROVISO TO S UB-SEC. (2) OF SEC. 143, NO NOTICE UNDER THIS SUB-SECTION SHALL BE SERVED ON THE ASSESSEE AF TER THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN U/S. 139 O R IN RESPONSE TO NOTICE U/S. 142(1) IS FURNISHED. THEREFORE, FOR INITIATING SCRUTINY AND/ OR REASSESSMENT PROCEEDING, SERVICE OF 5 NOTICE U/S. 143(2) OF THE ACT IS A CONDITION PRECED ENT. IN THE INSTANT CASES, ADMITTEDLY NO NOTICE U/S. 143(2) OF THE ACT HAD EVER BEEN SERV ED UPON THE ASSESSEE AND THIS FACT IS ALSO EVIDENT FROM THE REMAND REPORT OF THE A.O. STA TING THAT NOTICE U/S. 143(2) OF THE ACT WAS NOT ISSUED AFTER ISSUING OF NOTICE U/S. 148 OF THE ACT. WE FIND THAT THE I.T.A.T., MUMBAI BENCH AS WELL AS JODHPUR BENCH IN THE CASES OF KIRAN NAGJI NISAR VS. ITO (SUPRA) AND HARI SINGH & ASSOCIATES VS. ITO (SUPRA) RESPECT IVELY HAVE HELD THAT IT IS ONLY A PROCEDURAL IRREGULARITY AND THE SAME COULD BE SET R IGHT BY SETTING ASIDE THE ASSESSMENT ORDER. ON THE OTHER HAND, WE FIND THAT HONBLE BOM BAY HIGH COURT IN THE CASE OF CW T VS. HUF OF H.H. LATE J.M. SCINDIA (SUPRA) HAS HELD THAT THOUGH NOTICE U/S. 16(2) OF THE W.T. ACT MAY BE PROCEDURAL, THE PROVISO TO SEC. 16( 2) IS NOT PROCEDURAL. IT IS IN THE NATURE OF A LIMITATION ON THE POWER OF THE A.O. NOT TO PROCEED FURTHER IN A CASE WHERE RETURN HAS BEEN FILED U/S. 14 OR 15 OF THE W.T. ACT AND THIS HAS TO BE READ AS APPLICABLE TO A CASE OF REASSESSMENT U/S. 17 OF THE W.T. ACT A S WELL. THE PROVISIONS OF SECS. 16(2) AND 17 OF W.T. ACT ARE IN PARI MATERIA WITH THE PRO VISIONS OF SEC. 143(2) AND SEC. 147 OF I.T. ACT RESPECTIVELY AND, THEREFORE, THE RATIO OF THE SAID DECISION OF HONBLE BOMBAY HIGH COURT IS APPLICABLE TO THE INSTANT CASES. SIM ILARLY, HONBLE GAUHATI HIGH COURT IN THE CASE OF SMT. BANDANA GOGOI VS. CIT (SUPRA) HAS HELD THAT WHEN THE A.O. FAILED TO ISSUE NOTICE U/S. 143(2) OF THE ACT AFTER THE BLOCK RETUR N WAS FILED BY THE ASSESSEE, THE RETURN FILED BY THE ASSESSEE BECAME FINAL AND NO SC RUTINY PROCEEDING COULD BE STARTED IN RESPECT OF THAT RETURN AS THE A.O. FAILED TO ISSUE NOTICE U/S. 143(2) OF THE ACT WITHIN THE STIPULATED TIME. MOREOVER, LUCKNOW BENCH OF I.T.A. T. IN THE CASE OF DCIT VS. K.M. SUGAR MILLS LTD. (SUPRA) HAS CONSIDERED THE SAME VERY ISS UE AND AFTER CONSIDERING THE DECISIONS OF HONBLE APEX COURT IN THE CASE OF ACIT VS. HOTAL BLUE MOON (SUPAR) AND HONBLE ALLAHABAD HIGH COURT (LUCKNOW BENCH) IN THE CASE OF CIT VS. RAJEEV SHARMA (SUPRA) HAS HELD THAT NON-ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT AFTER FILING OF RETURN BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 VITIATES TH E REASSESSMENT PROCEEDINGS. WE CONSIDER IT PRUDENT TO REPRODUCE PARA-6 OF THE SAID ORDER, WHICH READS AS UNDER :- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI VIVEK MIS HRA, LD.CIT(DR) SUBMITTED THAT THE LD.CIT(A) FAILED TO APPRECIATE THAT THE HO NBLE ALLAHABAD HIGH COURT- LUCKNOW BENCH IN THE CASE OF CIT VS. RAJEEV SHARMA (2010) 232 CTR (ALL.) 303 NEVER INTENDED THAT THE NOTICE UNDER SECTION 143(2) SHOULD BE ISSUED IN ALL THE CASES WHERE ACTION UNDER SECTION 148 IS CONTEMPLATE D. BUT WHAT THE HONBLE HIGH 6 COURT INTENDED WAS THAT THE NOTICE U/S 143(2) SHOUL D BE ISSUED IN THOSE CASES ONLY WHERE THE ASSESSEE HAS FILED A FRESH RETURN IN RESP ONSE TO NOTICE U/S 148 OF THE ACT AND NOT IN THOSE CASES WHERE THE RETURN ALREADY FILED IS DEEMED TO HAVE BEEN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. ON THE OTHER HAND, SHRI AMIT SHUKLA, ADVOCATE, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT BEFORE MAKING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 OF THE ACT, THE AO WAS OBLIGED UNDER THE LAW TO ISSUE NOTICE UNDER SECTION 143(2) AND SERVE THE SAME ON THE ASSESSEE WITHIN A STIPULATED PERIOD OF ONE YEAR . ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE ISSUE IS NO LONGER RES INTE GRA THAT SUCH A NOTICE IS MANDATORY AND IN THE ABSENCE OF SUCH MANDATORY NOTI CE BEING SERVED ON THE ASSESSEE, THE AO DOES NOT GET JURISDICTION TO MAKE AN ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 148 OF THE ACT. WE FIND SU BSTANTIAL FORCE IN THE ABOVE SUBMISSION OF SHRI AMIT SHUKLA, ADVOCATE,LD. COUNSE L FOR THE ASSESSEE. IT IS SEEN THAT WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSE SSEE, THE LD.CIT(A) HAS RELIED ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF ACIT AND ANOTHER VS. HOTEL BLUE MOON (2010) 321 ITR 362(SC) AND THAT OF THE HO NBLE JURISDICTIONAL HIGH COURT-LUCKNOW BENCH IN THE CASE OF CIT VS. RAJEEV S HARMA (2010) 232 CTR (ALL.)303. THE1D. CIT(A) HAS REPRODUCED THE DECISIO NS OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AND TH AT OF HONBLE ALLAHAHAD HIGH COURT- LUCKNOW BENCH IN THE CASE OF RAJEEV SHARMA ( SUPRA) IN PARA 3.3 OF THE IMPUGNED ORDER. IN OUR VIEW, THE ABOVE DECISIONS AR E SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE AND THEREFORE, THE LD. CI T(A) WAS JUSTIFIED IN FOLLOWING THE SAME. IN THE CASE OF RAJEEV SHARMA (SUPRA), THE HONBLE ALLAHABAD HIGH COURT - LUCKNOW BENCH HELD THAT THE PROVISION CONTAINED I N SECTION 143(2) IS MANDATORY IN NATURE AND IT IS OBLIGATORY FOR THE AO TO APPLY HIS MIND TO THE CONTENTS OF THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 14 8 AND THEREAFTER ISSUE NOTICE UNDER SECTION 143(2) BEFORE PROCEEDING TO DECIDE TH E CONTROVERSY REGARDING ESCAPED ASSESSMENT; NON-ISSUANCE OF NOTICE UNDER SE CTION 143(2) AFTER FILING OF RETURN BY ASSESSEE VITIATED THE REASSESSMENT PROCEE DINGS. IN THE CASE OF HOTEL BLUE MOON (SUPRA), THE HONBLE SUPREME COURT RULED THAT IF THE AO, FOR ANY REASON, REPUDIATES THE RETURN FILED BY AN ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 158BC(A) OF THE INCOME-TAX ACT,1961 RELATIN G TO A BLOCK ASSESSMENT, THE AO MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143( 2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2). IN TH E CASE OF VIRENDRA DEV DIXIT VS. ACIT (2010) 41 DTR (ALL.) 43, THE HONBLE JURISDICT IONAL HIGH COURT HAS HELD THAT SERVICE OF NOTICE ON THE ASSESSEE UNDER SECTION 143 (2) WITHIN THE PRESCRIBED PERIOD OF TIME IS A PRE-REQUISITE FOR FRAMING THE B LOCK ASSESSMENT; NON-ISSUANCE OF NOTICE IS NOT A MERE PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE. IN VIEW OF THE ABOVE DECISIONS, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF SHRI VIVEK MISHRA, LD. CIT(DR). KEEPING IN VIEW THE JUDGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AND THAT OF THE HONBIE JURISDICTIONAL HIGH COURT-LUCKNOW BENCH IN THE CASE OF RAJEEV SHARMA (S UPRA), WE UPHOLD THE ORDER OF THE ID. CIT(A) AND DISMISS THE APPEAL OF THE REV ENUE. 7 8.1. FURTHER, HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VIPAN KHANNA VS. C.I.T. [255 I.T.R. 220 (P&H)] HELD AS UNDER : (II) THAT IT WAS AN ADMITTED POSITION THAT NO NO TICE UNDER SECTION 143(2) OF THE ACT HAD BEEN SERVED ON THE ASSESSEE WITHIN THE STIP ULATED PERIOD AND AS SUCH HIS RETURN HAD BECOME FINAL. IN VIEW OF THE AMENDMENT MADE IN SECTION 147 OF THE ACT WITH EFFECT FROM APRIL 1, 1989, THE ASSESSING O FFICER COULD NOT ONLY ASSESS OR REASSESS THE ESCAPED INCOME IN RESPECT OF WHICH PRO CEEDINGS UNDER SECTION 147 HAVE BEEN INITIATED BUT ALSO ANY OTHER INCOME CHARG EABLE TO TAX WHICH MAY HAVE ESCAPED ASSESSMENT AND WHICH COMES TO HIS KNOWLEDGE SUBSEQUENTLY IN THE COURSE OF SUCH PROCEEDINGS. FROM THE LETTER DATED JULY 30 , 1998, IT WAS EVIDENT THAT THE ASSESSING OFFICER WAS SEEKING GENERAL INFORMATION O N OTHER ISSUES MERELY TO VERIFY THE RETURN. SUCH GENERAL INQUIRY COULD ONLY BE MADE BY ISSUING A NOTICE UNDER SUB-SECTION (2) OF SECTION 143 WITHIN THE STI PULATED PERIOD WHICH IN THE PRESENT CASE HAD ALREADY EXPIRED. 8.2. CONSIDERING THE FACTS OF THE CASE BEFORE US A ND RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRONOUNCEMENTS INCLUDING THAT OF HONBLE APEX COURT IN THE CASE OF ACIT VS. HOTAL BLUE MOON (SUPRA), WE ARE OF THE CON SIDERED VIEW THAT THE A.O. IS BOUND TO SERVE ON THE ASSESSEE A NOTICE U/S. 143(2) OF TH E ACT REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND AT THE A.O.S O FFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED THERE, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN FURNISHED BY HIM. THAT NOT BEING DONE IN THE INSTA NT CASE, THE ASSESSMENTS FRAMED ON 20/12/2007 FOR THE ASSESSMENT YEARS UNDER CONSIDERA TION ARE BAD IN LAW AND VOID AB INITIO. WE, THEREFORE, UPHOLD THE ORDERS OF THE LD . C.I.T.(A) ON THIS ISSUE. 9. SINCE WE HAVE UPHELD THE ORDERS OF THE LD. C.I. T.(A) THAT THE REASSESSMENT ORDERS PASSED BY THE A.O. ARE INVALID ON ACCOUNT OF NON-IS SUANCE OF MANDATORY NOTICE TO BE ISSUED U/S. 143(2) OF THE ACT, WE DO NOT CONSIDER I T NECESSARY TO GO TO THE OTHER GROUNDS TAKEN BY THE DEPARTMENT DISPUTING THE DELETION OF T HE ADDITIONS MADE BY THE A.O. 10. IN THE RESULT, ALL THE THREE APPEALS BY THE DE PARTMENT ARE DISMISSED. 3 ! '4! 5 4% 6 37 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 06.05.2011. SD/- SD/- ( ), !' ( . . . . . . . . ) (AKBER BASHA) , ACCOUNTANT MEMBER (B.R.MITTAL) , JUDICIAL MEMBER ( (( (8' 8' 8' 8') )) ) DATE: 06 -05-2011 8 # # # # / ITA NOS. 1715, 1867 & 1869 (KOL) OF 2009 ! 1 /$$9 :!9';- COPY OF THE ORDER FORWARDED TO : 1. +, / THE APPELLANT : DCIT, CIRCLE-6. KOLKATA. 2 /0+, / THE RESPONDENT : NICCO UCO ALLIANCE CREDIT LTD., 2, HARE STREET, KOL-1 3. $ % () : THE CIT(A) -VI, KOLKATA. 4. $ %/ THE CIT, KOL- 5 . ?$6 /$% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6 . GUARD FILE . 09 /$/ TRUE COPY, ! %4/ BY ORDER, (DKP) @ A / DY/ASSTT. REGISTRAR .