Preksha Textile Pvt. Ltd., Ahmedabad V. The Income tax Officer, Ward-3(1)(4), Ahmedabad

ITA 1793/AHD/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4953 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Procedural lapse; Block assessment
• Section: 143(3); 143(2); 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL COURT] BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1793/AHD/2019 (ASSESSMENT YEAR: 2010-11) PREKSHA TEXTILES PVT. LTD. 462/3, OPP. PATEL MARKET, SAKAR BAZAR, AHMEDABAD- 380002 VS. ITO WARD-3(1)(4), AHMEDABAD [ PAN NO. AAA CP6 762 H ] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S. N. SOPARKAR, SR. ADV. RESPONDENT BY : SHRI VIDHYUT TRIVEDI , SR. D.R. DATE OF HEARING 1 3 . 1 0 .20 20 DATE OF PRONOUNCEMENT 15.10.2020 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 25.10.2019 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 4, AHMEDABAD ARISING OUT OF THE ORDER DATED 29.12.2 016 PASSED BY THE ITO, WARD-3(1)(4), AHMEDABAD UNDER SECTION 143 R.W.S. 14 7 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FO R ASSESSMENT YEAR 2010- 11. 2. THE CHALLENGES OF THE PETITIONER IS AGAINST THE VALIDITY OF THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT I N THE ABSENCE OF THE ISSUANCE OF THE NOTICE UNDER SECTION 143(2) OF THE ACT BY THE AUTHORITIES BELOW. ITA NO.1793/AHD/2019 PREKSHA TEXTILES PVT. LTD. VS. ITO ASST. YEAR 2010-11 - 2 - 3. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL THE LD. SENIOR COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE NOTICE UNDER SECTION 143(2) HAS NEVER BEEN ISSUED BY THE AUTHORI TIES BELOW. WHEN THIS PARTICULAR FACT WAS BROUGHT TO THE NOTICE OF THE LD . CIT(A) THE APPELLANT WAS DIRECTED TO FILE AN AFFIDAVIT TO THAT EFFECT. IT I S THE FURTHER CASE OF THE APPELLANT THAT THE ENTIRE RECORDS AS SUPPLIED UNDER THE APPLICATION BY VIRTUE OF THE RTI ACT, 2005 DO NOT SHOW THE ISSUANCE OF TH E SAID NOTICE UNDER SECTION 143(2) OF THE ACT. HE HAS FURTHER TAKEN US TO THE SAID RECORDS APPEARING AT PAGES 1, 2 AND 3 OF THE SUPPLEMENTARY PAPER BOOK FILED BEFORE US BY THE APPELLANT WHEREFROM THE ISSUANCE OF THE S AID NOTICE UNDER SECTION 143(2) BY THE AUTHORITIES BELOW IS NOT REFLECTING A T ALL. UNDER THIS PREMISE HE URGES BEFORE US THAT WHEN THE PRESCRIBED PROCEDU RE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) HAS NOT BEEN FOLLOWED ASSUMPTI ON OF JURISDICTION OF ISSUANCE OF NOTICE OF REOPENING UNDER SECTION 147 O F THE ACT ITSELF IS NOT SUSTAINABLE AND THUS THE ENTIRE ORDER IS LIABLE TO BE SET-ASIDE. 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE LA ST PARAGRAPH OF THE ORDER IMPUGNED PASSED BY THE LD. CIT(A) WHICH SPEAK S OF POSSIBILITIES OF MISPLACEMENT OF SOME PAGES OF THE RECORD DURING TRA NSIT FROM AO TO RANGE HEAD/PCIT OR AO TO AUDIT OR AO TO REVENUE AUDIT OR AO TO INSPECTION OFFICE. MORESO, WITHOUT ANY AFFIDAVIT AFFIRMED BY THE APPELLANT OF NOT BEING RECEIVED SUCH NOTICE UNDER SECTION 143(2) OF THE ACT, THIS POINT OF MAINTAINABILITY OF THE PROCEEDING ON THIS ISSUE COU LD NOT BE SETTLED IN FAVOUR OF THE ASSESSEE. ON THE SAME BREATH THE LD. DR REL IED UPON THE COMMUNICATION SENT BY THE LD. AO WHERE IT WAS SPECI FICALLY MENTIONED THAT ITA NO.1793/AHD/2019 PREKSHA TEXTILES PVT. LTD. VS. ITO ASST. YEAR 2010-11 - 3 - NO NOTICE UNDER SECTION 143(2) FOUND TO BE ISSUED B Y THE AUTHORITY TO THE APPELLANT. 5. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE AL SO PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. WE HAVE PARTICULARLY PERUSED THE ENTIRE SET OF REC ORDS WHICH WAS SUPPLIED TO THE APPELLANT UPON DISPOSING OF THE APP LICATION UNDER RTI ACT, 2005 UNDER SECTION 7(1) OF THE SAID ACT WHICH DO NO T SHOW ANY SUCH ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. IT IS PERTINENT TO MENTION THAT THE ENTIRE FILES/RECORDS WERE SUPPLIED AS APPLIED FOR UNDER THIS RTI ACT, 2005 BY THE APPELLANT AND THEREFORE, THERE SHOULD NOT HAVE BEEN ANY PROBABILITY OF HAVING ANY OTHER SEPARATE PAGES GOT MISPLACED DURING TRANSIT AS CLAIMED BY THE LD. CIT(A). WE HAVE ALSO TAKEN NOTE OF THE SUBMISSIONS AND PERUSED THE LETTER DATED 31.07.2020 SUPPLIED BY THE LD. AO WHICH CLARIFIES THAT NO SUCH NOTICE UNDER SECTION 1 43(2) IS FOUND TO HAVE BEEN SERVED UPON THE ASSESSEE. FURTHER THAT THE LD . AO MENTIONED ALL THE NOTICES ISSUED BY HIM IN THE ASSESSMENT ORDER PASSE D UNDER SECTION 143(3) OF THE ACT. BUT THERE WAS NO MENTIONING OF THE NOT ICE ISSUE UNDER SECTION 143(2) OF THE ACT WHICH SUBSTANTIATES THAT NO SUCH NOTICE UNDER SECTION 143(2) OF THE ACT WAS EVEN ISSUED BY THE LD. AO. U NDER THIS CIRCUMSTANCES, WE DO NOT HESITATE TO COME TO THE CO NCLUSION THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT ISSUED AT A LL BY THE AUTHORITIES BELOW. THE SECOND QUESTION AS TO WHETHER IN THE AB SENCE OF ISSUANCE OF NOTICE UNDER SECTION 143(2), THE REOPENING UNDER SE CTION 147 OF THE ACT IS VALID OR NOT HAS BEEN ARGUED BY THE LD. SENIOR COUN SEL FOR THE ASSESSEE IN FAVOUR OF THE ASSESSEE RELYING UPON THE JUDGMENT PA SSED BY THE HONBLE ITA NO.1793/AHD/2019 PREKSHA TEXTILES PVT. LTD. VS. ITO ASST. YEAR 2010-11 - 4 - JURISDICTIONAL HIGH COURT IN THE MATTER OF CIT VS. SUKHINI P. MODI REPORTED IN [2014] 52 TAXMANN.COM 50 (GUJARAT), A COPY WHERE OF HAS BEEN SUBMITTED BEFORE US. IN THAT PARTICULAR MATTER BOTH THE LD. CIT(A) AND THE LD. TRIBUNAL WERE PLEASED TO HOLD THAT PROCEDURE PRESCR IBED FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) WERE NOT FOLLOWED AND T HEREFORE, THE ASSUMPTION OF THE JURISDICTION OF ISSUANCE OF NOTIC E OF REOPENING ITSELF WOULD NOT BE SUSTAINABLE. RELYING UPON THE JUDGMEN T PASSED BY THE HONBLE APEX COURT THE HONBLE JURISDICTIONAL HIGH COURT WAS PLEASED TO FIND NO REASON OF REQUIREMENT TO INDULGE INTO THE C ONCURRENT FINDINGS OF BOTH THE AUTHORITIES IN THE ABSENCE OF FULFILLMENT OF MA NDATORY REQUIREMENT OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THE RELEVANT PORTION OF SAID JUDGMENT IS AS FOLLOWS:- 8. THE APEX COURT IN THE CASE OF ASSTT. CIT V. HOT EL BLUE MOON [2010] 321 ITR 362/188 TAXMAN 113 HAS CONSIDERED THE VERY ISSUE. T HE APEX COURT HELD THAT THE ASSESSING OFFICER HAS TO NECESSARILY FOLLOW THE PRO VISIONS OF SECTION 142 AND SUB- SECTIONS (2) AND (3) OF SECTION 143. IT DID NOT ACC EPT THE SUBMISSION OF THE REVENUE THAT THE REQUIREMENT OF THE NOTICE UNDER SECTION 14 3 CAN BE DISPENSED WITH AND THE SAME IS MERE PROCEDURAL IRREGULARITY. IN THE WORDS OF THE APEX COURT, IT IS HELD AS UNDER (PAGE 370): THE CASE OF THE REVENUE IS THAT THE EXPRESSION SO FAR AS MAY BE APPLY INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PRO VISIONS OF SECTION 142, SUB- SECTIONS (2) AND (3) OF SECTION 143 STRICTLY FOR TH E PURPOSE OF BLOCK ASSESSMENTS. WE DO NOT AGREE WITH THE SUBMISSIONS O F THE LEARNED COUNSEL FOR THE REVENUE, SINCE WE DO NOT SEE ANY REASON TO REST RICT THE SCOPE AND MEANING OF THE EXPRESSION SO FAR AS MAY BE APPLY. IN OUR VIEW, WHERE THE ASSESSING OFFICER IN REPUDIATION OF THE RETURN FILE D UNDER SECTION158BC(A) PROCEEDS TO MAKE AN ENQUIRY, HE HAS NECESSARILY TO FOLLOW THE PROVISIONS OF SECTION 142, SUB-SECTIONS (2) AND (3) OF SECTION 143. 9. IN THE INSTANT CASE, WE NOTICE THAT BOTH THE COM MISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL HAVE HELD THAT THE PROCE DURE PRESCRIBED OF ISSUANCE OF NOTICE UNDER SECTION 143(2) HAS NOT BEEN FOLLOWED A T ALL. THIS REALM OF FACT HAS NOT BEEN DISPUTED BY THE REVENUE. IN VIEW OF THIS DECIS ION OF THE APEX COURT, THE ASSUMPTION OF THE JURISDICTION OF ISSUANCE OF NOTIC E OF REOPENING ITSELF WOULD NOT BE SUSTAINABLE, AND, THEREFORE, THIS COURT DOES NOT RE QUIRE TO INDULGE INTO THE CONCURRENT FINDINGS OF BOTH THE AUTHORITIES. IN THE ABSENCE OF FULFILLMENT OF MANDATORY ITA NO.1793/AHD/2019 PREKSHA TEXTILES PVT. LTD. VS. ITO ASST. YEAR 2010-11 - 5 - REQUIREMENT OF ISSUANCE OF NOTICE UNDER SECTION 143 (2) BOTH THE AUTHORITIES RIGHTLY AND VALIDLY HELD AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. RESULTANTLY, THE TAX APPEALS DESERVE NO FURTHER CONSIDERATION AND AR E DISMISSED WITH NO ORDER AS TO COSTS. RESPECTFULLY RELYING UPON THE ABOVE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT WE DO NOT HESITATE TO QUA SH THE ENTIRE PROCEEDING UNDER SECTION 147 OF THE ACT IN THE ABSENCE OF ISSU ANCE OF STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT UPON THE APPELLANT. THE ASSESSEES APPEAL IS, THUS, ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 15/10/2020 SD/- SD/- (AMARJIT SINGH) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 15/10/2020 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD