MUTHUKUMARAN RANGARAJAN, CHIDAMBARAM V. ITO WARD 3, CUDDALORE

ITA 1841/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2043 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N GOPIKRISHNA IRS JCIT
• Assessee Lawyers: N V BALAJI
• Keywords: Principle of natural justice; Assessment record; Set aside; Capital Gains
• Section: 143(3); 201; 13; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NOS. 1841 & 1842/CHNY/2019. #$% &$ / ASSESSMENT YEARS : 2013-14 & 2013-14. MUTHUKUMARAN RANGARAJAN, 149-A, BHARATHIDASAN STREET, KANAGASABAI NAGAR, CHIDAMBARAM 608 001. VS. THE INCOME TAX OFFICER, WARD 3, CUDDALORE. [PAN AABPR 6319Q] ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : SHRI. N.V. BALAJI, ADVOCATE +,'( ) * /RESPONDENT BY : SHRI. N. GOPIKRISHNA, IRS, JCIT. # - ) . /DATE OF HEARING : 13-11-2019 /0&% ) . /DATE OF PRONOUNCEMENT : 04-12-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THESE ARE APPEALS FILED BY THE ASSESSEE DIRECTED AG AINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- PUDUCHERRY, (CIT(A) FOR SHORT) DATED 23.05.2019 A ND 24.05.2019 FOR THE ASSESSMENT YEAR (AY) 2013-14. ITA NO.1841 & 1842 /2019 :- 2 -: 2. FIRST, WE TAKE UP ITA NO.1841/CHNY/2019 FOR ASS ESSMENT YEAR 2013-14 FOR ADJUDICATION . 3. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - PUDUCHERRY [CIT(A)] IS CONTRARY TO TH E FACTS AND CIRCUMSTANCES OF THE CASE AND AGAINST THE PRINCIPLE S OF EQUITY AND NATURAL JUSTICE. 2. THE CIT (A) FAILED TO APPRECIATE THE SALE CONSID ERATION OF RS. 1,60,00,000/- INCLUDES THE CONSIDERATION OF THE VAL UE OF CLOSING STOCK. 3. THE CIT (A) FAILED TO APPRECIATE THAT IT WAS ONL Y AN INADVERTENT ERROR THAT THE APPELLANT HAD NOT INCLUDED THE VALUE OF TH E CLOSING STOCK IN THE SALE DEED. THE CIT (A) ERRED IN UPHOLDING THE ADDIT ION EVEN AFTER THE APPELLANT HAD PROVED BEYOND DOUBT THAT THE SALE CON SIDERATION OF RS.1,60,00,000 INCLUDES VALUE OF CLOSING STOCK. 4. THE CIT (A) FAILED TO APPRECIATE THAT THE APPELL ANT HAD PRODUCED CONFIRMATION LETTER FROM THE PURCHASERS AND HAD ALS O PRODUCED THE PURCHASERS ON SUMMONS. IT IS SUBMITTED MAKING ADDIT ION BY MERELY DISREGARDING SUCH EVIDENCES IS BAD IN LAW. 5. THE CIT (A) FAILED TO APPRECIATE THAT THE APPELL ANT HAD SOLD HIS TEA FACTORY AS A GOING CONCERN INCLUDING CLOSING STOCK FOR A CONSIDERATION OF RS.1,60,00,000/-. THE CIT (A) ERRED IN CONFIRMING T HE ADDITION OF RS.53,84,394/- IN RESPECT OF CLOSING STOCK BY CONSI DERING THE BOOKS OF ACCOUNTS OF THE PURCHASER MERELY BASED ON BOOKS OF THE PURCHASER. 6. THE CIT (A) FAILED TO APPRECIATE INCORRECT ACCOU NTING IN THE BOOKS OF THE PURCHASER WILL NOT AMOUNT TO ADDITION IN THE HA NDS OF THE APPELLANT. 7. THE CIT (A) FAILED TO APPRECIATE MERELY BECAUSE THE PURCHASERS HAVE FAILED TO SHOW THE STOCK IN THEIR RETURN OF INCOME, WILL NOT ALTER THE FACT THAT STOCK OF RS.53,84,394/- WAS TRANSFERRED TO THE PURCHASERS ALONG WITH OTHER ASSETS. THE CIT (A) OUGHT TO HAVE APPREC IATED THE OTHER EVIDENCES IN THIS REGARD. 8. THE APPELLANT CRAVES THE LEAVE OF THE HONBLE TR IBUNAL TO ADDUCE ADDITIONAL GROUNDS IN SUPPORT ITS CONTENTIONS BEFOR E AND DURING THE COURSE OF HEARING OF THIS APPEAL. ITA NO.1841 & 1842 /2019 :- 3 -: 4. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL, ENGAGED IN THE BUS INESS OF MEDICAL PROFESSION AND MANUFACTURING TEA. THE RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS FILED ON 25.03.201 5 DISCLOSING TOTAL INCOME OF RS.18,78236/-. AGAINST THE SAID RET URN OF INCOME, THE ASSESSMENT WAS ORIGINALLY COMPLETED BY THE ASSES SING OFFICER VIDE ORDER DATED 30.11.2015 PASSED U/S. 143(3) OF THE I NCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS. 20,05,530/-. SUBSEQUENTLY, THE LD. PR. COMMISSIONER OF INCOME TAX, PONDICHERRY ON EXAMINATION OF THE ASSESSMENT RECORD HAD FORMED AN OPINION THAT THE ASSESSING OFFICER HAD FAILED TO ENQUIRE INTO TH E ISSUE OF SALE OF CLOSING STOCK. ACCORDINGLY, THE LD. PCIT SET ASIDE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER VIDE ORDER DATED 28.03.2018 PASSED U/S.263 OF THE ACT. CONSEQUENT TO THE REVISIONARY ORDER PASSED BY THE LD. PCIT, THE ASSESSING OFFICER COMPLETED THE ASS ESSMENT VIDE ORDER DATED 18.09.2018 PASSED U/S.143(3) R.W.S. 263 OF TH E ACT BY BRINGING TO TAX THE VALUE OF THE CLOSING STOCK TRANSFERRED T O THE VENDOR OF RS.53,54,394/-. 5. THE BRIEF BACKGROUND OF THE CASE ARE AS UNDER:- ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO ASSES SMENT YEAR HAD SOLD IMMOVABLE PROPERTIES CONSISTING OF LAND, BUILDING AND TEA ITA NO.1841 & 1842 /2019 :- 4 -: FACTORY FOR CONSIDERATION OF RS.1,60,00,000/- TO O NE MR. RAMAN AND MR. R. SARAVANAN VIDE SALE DEED NO.217/213, DATED 0 1.02.2013. APPARENTLY, THE SALE DEED HAD GIVEN BIFURCATION AS UNDER:- SL.NO SURVEY NOS EXTENT ACRES NATURE OF PROPERTY MARKET VALUE AS PER EXECUANTS ASSESSMENT 1 671/20,672/3 AND 672/4A 1.23 ACRE LAND 67,03,500/- 2 FACTORY BUILDING 62,76,500/- 30,00,000/- TOTAL 1.23 ACRE LAND WITH FACTORY, BUILDINGS AND MACHINERY 1,59,80,000/- WELL .20,000/- TOTAL .1,60,00,000/- NO SALE CONSIDERATION WAS APPORTIONED TOWARDS CL OSING STOCK. CONTENTION OF THE ASSESSEE WAS THAT ASSETS WERE SO LD ON SLUMP SALE BASIS OR GOING CONCERN BASIS. THEREFORE, NO SPECI FIC CONSIDERATION WAS ASSIGNED TOWARDS SALE OF CLOSING STOCK. THIS CONTENTION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER AND BROUGHT TO TAX. 6. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED THE ACTION OF THE ASSESSING OFFICER. ITA NO.1841 & 1842 /2019 :- 5 -: 7. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFO RE US IN THE PRESENT APPEAL. IT IS CONTENDED THAT ASSETS WERE SO LD ON GOING CONCERN, SLUMP SALE BASIS AND NO CONSIDERATION WAS ASSIGNED TOWARDS SALE OF CLOSING STOCK. IT IS FURTHER CONTENDED TH AT NO STOCK WAS LYING WITH THE ASSESSEE AND THE STOCK SHOULD BE DEEM ED TO HAVE LOST VALUE AND NO ADDITION CAN BE MADE. 8. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPR ESENTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 9. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, STOCK WAS LYING WITH THE ASSES SEE ON THE DATE OF SALE OF OTHER FIXED ASSETS. ASSESSEE CEASED TO CAR RY ON THE BUSINESS. THE CONTENTION OF THE ASSESSEE THAT ASSET WAS SOLD ON SLUMP SALE AS GOING CONCERN CANNOT BE ACCEPTED IN VIEW OF THE FAC T THAT LIABILITY WERE NOT TAKEN OVER AND CAPITAL GAINS UNDER SLUMP SALE A S PRESCRIBED U/S.50B OF THE ACT WERE NOT OFFERED TO TAX. ADMITT EDLY, CLOSING STOCK WAS NOT LYING WITH THE ASSESSEE. THEREFORE, THE IM PLIEDLY STOCK HAD BEEN SOLD TO SAME PARTY, AS THE PURCHASER ALSO CONF IRMED. APPARENTLY, THE CONSIDERATION RECEIVED ON ACCOUNT OF SALE OF CLOSING STOCK WAS NOT OFFERED TO TAX. CONTENTION OF THE ASS ESSEE THAT STOCK WAS SOLD AS PART OF IMMOVABLE ASSET HAD NO CREDENC E, IN AS MUCH AS, ITA NO.1841 & 1842 /2019 :- 6 -: NO DOCUMENTARY EVIDENCE TO THIS EFFECT WAS PRODUCE D. THE MERE FACT THAT PURCHASERS HAD SHOWN CLOSING STOCK IN HIS HAN DS WOULD GO TO SHOW THAT SOME CONSIDERATION WAS RECEIVED TOWARDS SALE OF CLOSING STOCK. STATEMENT AND THE CONFIRMATION GIVEN BY THE PURCHASERS HAS NO CREDENCE IN AS MUCH AS, IT IS COLLUSIVE STATEMENT M ADE BY THE PURCHASER. THE AMOUNT OF ADDITION IS SAME AS VALU E ADOPTED BY THE ASSESSEE. THEREFORE, THERE CANNOT BE ANY DISPUTE A S TO THE QUANTUM OF THE ADDITION ON THIS ISSUE. OTHER CONTENTION O F THE ASSESSEE DURING THE HEARING OF THE APPEAL IS THAT STOCK WAY LYIN G WITH THE ASSESSEE HIMSELF AND IN THE ABSENCE OF ANY VALUE, THE COST SHOULD BE TREATED AS NIL IS REJECTED FOR TWO REASONS. FIRSTLY, THIS P LEA WAS NOT TAKEN BEFORE LOWER AUTHORITIES AND SECONDLY, THIS ISSUE IS PURELY FACTUAL ISSUE WHICH CANNOT BE ADJUDICATED BY THIS TRIBUNAL IN THE ABSENCE OF ANY APPLICATION BY THE ASSESSEE TO CONSIDER THE AD DITIONAL EVIDENCE AND IN FACT NO EVIDENCE WAS FILED BEFORE US EXCEP T BY MAKING BALD ASSERTION BEFORE US. FURTHER, THIS CONTENTION MIL ITATE AGAINST THE VERY STATEMENT OF THE ASSESSEE THAT CLOSING STOCK WAS SO LD AS PART OF THE IMMOVABLE ASSETS. THERE IS YET ANOTHER REASON TO CO NFIRM THE ADDITION, EVEN ASSUMING THAT NO SPECIFIC CONSIDERAT ION WAS ASSIGNED TO THE SALE OF CLOSING STOCK, PROVISIONS OF SECTION 5 0C OF THE ACT ARE ATTRACTED ON THE SALE OF FIXED ASSETS. THUS, THE ADDITION IS REQUIRED TO BE CONFIRMED EVEN UNDER THE PROVISIONS OF SECTION 5 0C OF THE ACT, IN ITA NO.1841 & 1842 /2019 :- 7 -: THE LIGHT OF THE FACT THAT THE SALE CONSIDERATION RECEIVED EXACTLY MATCHES WITH THE GUIDELINE VALUE PRESCRIBED FOR STA MP DUTY PURPOSE IN RESPECT OF FIXED ASSETS. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIE S AND WE DISMISS THE APPEAL FILED BY THE ASSESSEE. 10. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.1842/CHNY/2019 FOR ASSESSMENT YEAR 2013-2014 F OR ADJUDICATION. 11. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS FILED ON 25.03.2015 DISCLOSING TOTAL INCOME OF R S.18,78236/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS ORI GINALLY COMPLETED BY THE ASSESSING OFFICER VIDE ORDER DATED 30.11. 2015 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS. 20,05,530/-. SUBSEQUENTLY, THE LD. PR. COMMISSIONER OF INCOME TAX, PONDICHERRY EXERCISING HIS POWERS VE STED WITH HIM U/S.263 OF THE ACT HAD SET ASIDE THE ASSESSMENT SIN CE THE ASSESSING OFFICER HAD FAILED TO EXAMINE THE ISSUE OF SALE OF CLOSING STOCK. PURSUANT TO THE ORDER PASSED U/S.143(3) R.W.S. 263 OF THE ACT THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 18.09.201 8 BRINGING INTO TAX THE VALUE OF CLOSING STOCK OF RS.53,84,394/-. 12. EVEN IN APPEAL BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS), THE COMMISSIONER OF INCOME TAX (APPEAL S) ADDITION WAS ITA NO.1841 & 1842 /2019 :- 8 -: CONFIRMED AND IN FURTHER APPEAL BEFORE THE TRIBUNA L, THE TRIBUNAL IN ITA NO.1841/CHNY/2019 HAD CONFIRMED THE ADDITION. 13 WHILE THE MATTER STOOD THUS, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.274 R.WS. 271 (1) ( C) OF T HE ACT . ACCORDINGLY, SHOW CAUSE NOTICE WAS ISSUED FOR CONCEALMENT OF PA RTICULARS OF INCOME. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSE SSEE HAS SUBMITTED THAT CLOSING STOCK WAS SOLD AS A PART OF SALE OF ASSET FOR A CONSIDERATION OF RS.1,60,00,000/-. HOWEVER, THE AS SESSING OFFICER CONSIDERING THE FACT THAT SALE CONSIDERATION WAS A PPORTIONED OF VARIOUS ASSETS HAD CONCLUDED THAT CLOSING STOCK WAS NOT SOLD AS PART OF SALE OF ASSETS, ACCORDINGLY HE CONCLUDED THAT A SSESSEE HAS CONCEALED PARTICULARS OF INCOME BY NOT DISCLOSING SALE CONSIDERATION OF CLOSING STOCK. ACCORDINGLY, LEVIED PENALTY OF I16 ,63,777/- U/S.271(1) (C) OF THE ACT. 14. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEF ORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 15. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL B EFORE US IN THE PRESENT APPEAL. IT IS CONTENDED THAT IN SHOW CAUSE NOTICE, THE ASSESSING OFFICER HAD NOT STUCK OFF THE RELEVANT L IMB OF SHOW CAUSE NOTICE AND THEREFORE BASED ON THE RATIO OF DECISIO N LAID DOWN BY ITA NO.1841 & 1842 /2019 :- 9 -: HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 THAT NO PENALTY COULD BE LEVIED. HE FURTHER SUBMITTED THAT MERE REJECTION O F EXPLANATION DOES NOT WARRANT LEVY OF PENALTY, PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD, 322 ITR 158 . 16. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REP RESENTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 17. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IN THE PRESENT APPEAL RELAT ES TO LEVY OF PENALTY U/S.271 (1) (C) OF THE ACT IN RESPECT OF ADDITION M ADE ON ACCOUNT OF UNDISCLOSED SALE VALUE OF THE CLOSING STOCK. FROM THE PERUSAL OF THE ORDER OF ASSESSING OFFICER AS WELL AS LD. CIT(A) , THE ADDITION WAS MADE CONSIDERING SALE VALUE APPORTIONED TO VARIOU S ASSETS. ADMITTEDLY, NO SALE CONSIDERATION WAS APPORTIONED TOWARDS SALE OF THE CLOSING STOCK AND THE CLOSING STOCK WAS NOT PHYSICA LLY AVAILABLE WITH THE ASSESSEE AND THE CLOSING STOCK WAS ADMITTEDLY TRANSFERRED TO THE BUYER. THESE ADMITTED MATERIAL FACTS LED TO ADDI TION. THE ONLY CONTENTION MADE BY THE ASSESSEE IS THAT THIS WAS SOLD AS PART OF SALE OF ASSETS, WHICH IS NOT SUPPORTED BY ANY EVIDENCE. THE TRIBUNAL HAD RECORDED A FINDING THAT HIS STATEMENT IS NOT SUPPOR TED BY ANY EVIDENCE ITA NO.1841 & 1842 /2019 :- 10 -: ON RECORD. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF BADRI PRASAD OM PRAKASH VS. CIT, [1987] 163 ITR 440 HAD HELD THAT WHEREVER THE ASSESSEE HAD FAILED TO REBUT THE FACTUAL POSIT ION ON THE BASIS OF WHICH ADDITION WAS MADE, THE LEVY OF PENALTY U/S.2 71(1) (C) OF THE ACT WAS JUSTIFIED. THUS, IT IS CLEAR CASE OF CONCEALMEN T AND ASSESSING OFFICER HAD RIGHTLY LEVIED PENALTY U/S.271 (1) (C) OF THE ACT. THE CONTENTION OF THE ASSESSEE THAT IN SHOW CAUSE NO TICE, THE ASSESSING OFFICER HAD NOT STRUCK OFF THE RELEVANT LIMB HAS NO RELEVANCE, SINCE HE HAD FILED EXPLANATION IN RESPONSE TO SHOW CAUSE, W HICH MEANS THAT ASSESSEE VERY WELL UNDERSTOOD THE SHOW CAUSE NOTICE , AND THEREFORE THE RATIO OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CANNOT BE APPLIED AS THE ASSESSEE UNDERSTOOD THE SHOW CAUSE AND FILED EXPLANATION. THE BANGALORE BENCH OF THE TRIBUNAL, TO WHICH ONE OF US I.E. THE ACCOUNTANT MEMBER IS THE AUTHOR OF THE ORDER, IN TH E CASE OF P.M.ABDULLA VS. ITO (IN ITA NOS.1223 & 1224/BANGAL ORE/2012, DATED 17.10.2016 ) HAD HELD THAT THIS CANNOT BE A VALID REASON FOR D ELETION OF THE PENALTY U/S.271(1) (C) OF THE ACT BY HOLDING AS UNDER:- 9. WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IS WHETHER LEVY OF PENALTY U/S. 271(1) ( C) IS VALID IN LAW KEEPING IN VIEW THE DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF MANJUNATHA COTTON &GINNING FACTORY (SUP RA). THE CONTENTION OF THE ASSESSEE IS THAT SINCE THE ASSESS ING OFFICER HAD NOT TICKED OFF THE RELEVANT COLUMN IN THE SHOW CAUSE NO TICE, IT GOES TO PROVE THAT THE ASSESSING OFFICER HAD NOT REACHED SA TISFACTION BEFORE INITIATING PROCEEDINGS U/S.271(1) ( C). THE CONTEN TION OF THE LEARNED ITA NO.1841 & 1842 /2019 :- 11 -: COUNSEL FOR ASSESSEE THAT THE RELEVANT COLUMN HAS N OT BEEN TICKED, CANNOT BE ACCEPTED AS IT IS FOUND FROM MATERIAL PLA CED BEFORE US THAT FOR BOTH THE YEARS, THE COLUMN RELEVANT TO CONCEALM ENT OF PARTICULARS OF INCOME HAS BEEN TICKED BY THE ASSESSING OFFICER. IN ANY EVENT, IT IS FOUND THAT THE ASSESSEE HAD OFFERED AN EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME ONLY. THE ASSESSEE, AT NO STAGE OF PENALTY PROCEEDINGS AND AT NO STAGE HAD COMPLAINED OF VIOLA TION OF THE PRINCIPLES OF NATURAL JUSTICE. THUS, NO PREJUDICE I S CAUSED ON ACCOUNT OF ANY OMISSION OR COMMISSION IN THE SHOW CAUSE ISS UED. THE PROVISIONS OF SECTION 292B CLEARLY LAY DOWN THAT :- RETURN OF INCOME, ETC, NOT TO BE INVALID ON CERT AIN GROUNDS: 292B:- NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUM MONS OR OTHER PROCEEDING FURNISHED OR MADE OR ISSUED OR TAK EN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT S HALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON O F ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OT HER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. THE HONBLE JURISDICTIONAL HIGH COURT HAD NEITHER C ONSIDERED NOR BROUGHT TO THE NOTICE OF THE HONBLE HIGH COURT, PR OVISIONS OF SECTION 292B OF THE ACT. EVEN ASSUMING THAT THERE IS A DEFE CT IN THE SHOW CAUSE NOTICE ISSUED, AS CANVASSED BY THE LEARNED CO UNSEL FOR ASSESSEE THAT WILL VITIATE THE ENTIRE PENALTY PROC EEDINGS, THE JUDGMENT WAS RENDERED BY THE HONBLE HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) WITHOUT CONSIDERING THE PROVISIONS OF SECTION 292B. SUBSEQUENTLY, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SRI DURGA ENTER PRISES (2014) 44 TAXMANN.COM 442 (KAR) WHILE DEALING WITH THE VALIDI TY OF NOTICE U/S.148 OF THE ACT AS VALID AND RESPONDED TO IT IN LETTER AND SPIRIT AND PARTICIPATED IN THE PROCEEDINGS AND IN LIGHT OF THE PROVISIONS OF SECTION 292B, NOTICE ISSUED U/S.148 WAS HELD TO BE VALID. THE RELEVANT PARAGRAPH OF JUDGMENT IS EXTRACTED BELOW:- 9. IN THE PRESENT CASE, AS OBSERVED EARLIER, THE AS SESSEE NOT ONLY RESPONDED TO THE NOTICE UNDER SECTION 148 OF T HE ACT WITHIN ONE MONTH, BUT ON THE BASIS OF THE RETURN FI LED EARLIER, PARTICIPATED IN THE PROCEEDINGS TILL THE MATTER REA CHED THE FAA AND WAS DISPOSED OF. A GLANCE AT SECTION 292B OF TH E ACT, SHOWS THAT UNDER THIS PROVISION, CERTAIN ACTS ARE N OT TO BE ITA NO.1841 & 1842 /2019 :- 12 -: TREATED AS INVALID, MAY BE BY REASON OF ANY MISTAKE , DEFECT OR OMISSIONS, EITHER IN RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS. IN OTHER WORDS, A NOT ICE CANNOT BE INVALIDATED BY REASON OF ANY MISTAKE, SUC H AS THE ONE OCCURRED IN THE PRESENT CASE, NAMELY, THE PERIO D OF FILING RETURN OF INCOME WAS NOT SPECIFIED AS CONTEMPLATED BY SECTION 148 OF THE ACT. IF SUCH A DEFECT IS NOT ALLOWED TO BE CURED, OR TREATED AS INVALID SO AS TO DECLARE THE NOTICE INVA LID, DESPITE THE FACT THAT ASSESSEE HAD TAKEN THAT NOTICE AS VAL ID AND RESPONDED TO IT IN LETTER AND SPIRIT AND PARTICIPAT ED IN THE PROCEEDINGS, THE VERY PURPOSE/OBJECTIVE OF THE PROV ISIONS CONTAINED IN SECTION 292B OF THE ACT WOULD STAND FRUSTRATED/DEFEATED. THE INTENT OF THE LEGISLATURE IS CLEAR FROM THE LANGUAGE EMPLOYED IN THIS PROVISION WHICH STATE S THAT A DEFECTIVE NOTICE, SUCH AS THE ONE IN THE PRESENT CA SE, CANNOT BE DECLARED INVALID BY REASON OF ANY MISTAKE, DEFEC T OR OMISSION, IF THE NOTICE IN `SUBSTANCE' AND IN `EFFE CT' IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT OF PURPO SE OF THIS ACT. THE INTENT OR PURPOSE OF ISSUING THE NOTICE IS TO CALL UPON THE ASSESSEE TO FILE RETURN, IF THE ASSESSING OFFIC ER FINDS THAT INCOME HAS ESCAPED THE ASSESSMENT. THIS BEING THE I NTENT AND PURPOSE OF THE PROVISIONS CONTAINED IN SECTION 148 OF THE ACT, IN OUR OPINION, IT STANDS SATISFIED IF THE NOTICE I S RESPONDED WITHIN REASONABLE TIME, WHICH IN THE PRESENT CASE W AS 30 DAYS, IRRESPECTIVE OF THE FACT WHETHER THE PERIOD WAS SPE CIFIED OR NOT IN THE NOTICE FOR FILING RETURN OF INCOME. IN THE P RESENT CASE, IF THE ASSESSEE HAD NOT RESPONDED TO THIS NOTICE AT AL L AND HAD RAISED SUCH GROUND OF CHALLENGE, PERHAPS, HE WOULD NOT SUCCEED. BUT HAVING RESPONDED AND PARTICIPATED IN T HE PROCEEDINGS, HE CANNOT BE ALLOWED TO TURN AROUND AN D RAISE OBJECTION FOR THE FIRST TIME BEFORE THE TRIBUNAL SE EKING INVALIDATION OF THE PROCEEDINGS INITIATED BY ISSUIN G NOTICE UNDER SECTION 148 OF THE ACT. IN THE CIRCUMSTANCE, WE ALLOW THIS APPEAL ANSWERING BOTH THE SUBSTANTIAL QUESTION S OF LAW IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN VIEW OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. THUS, HAVING REGARD TO THE RATIO LAID DOWN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE SUBSEQUENT DECISIO N IN THE CASE OF SRI DURGA ENTERPRISE (SUPRA) WE HOLD THAT SHOW CAUSE NO TICE ISSUED U/S.274 R.W.S 271(1) ( C) CANNOT BE HELD TO BE INVA LID. ITA NO.1841 & 1842 /2019 :- 13 -: RECENTLY, THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF AMTEX SOFTWARE SOLUTIONS PVT. LTD VS. ACIT (2019) 418 IT R 99 HAD REITERATED THE SAME RATIO. HENCE, WE DO NOT FIND ANY MERITS IN THE APPEAL FILED BY THE ASSESSEE 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IN ITA NO.1842/CHNY/2019 FOR ASSESSMENT YEAR 2013-2014 STA NDS DISMISSED. 19. TO SUMMARIZE THE RESULTS, THE APPEALS FILED BY THE ASSESSEE IN ITA NOS.1841 & 1842/CHNY/2019 FOR ASSESSMENT YEAR 2 013-2014 STAND DISMISSED. ORDER PRONOUNCED ON 4TH DAY OF DECEMBER, 201 9, AT CHENNAI. SD/- SD/- ( . ! ) (DUVVURU RL REDDY) ' #$ /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED: 4 TH DECEMBER, 2019. KV 3 ) +.4 5' !6 5&. / COPY TO: 1 . !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF