ITO, Ward - 6(1), Kolkata , Kolkata V. Pinnacle Commodities Pvt. Ltd., , Kolkata

ITA 1901/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4825 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: MANISH TIWARI
• Keywords: Reopening of assessment; Unexplained cash credit; Opportunity of being heard; Question of law; Procedural lapse; Assessment record; Block assessment; Revised return; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 143(1); 147; 68; 148; 28; 144; 139

Judgement Text

1 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1901/KOL/2018 ASSESSMENT YEAR: 2010-11 INCOME-TAX OFFICER, WD-6(1), KOLKATA VS. PINNACLE C OMMODITIES PVT. LTD. (PAN: AACCD4929L) APPELLANT RESPONDENT DATE OF HEARING 28.06.2019 DATE OF PRONOUNCEMENT 09.08.2019 FOR THE APPELLANT SHRI C. J. SINGH, JCIT, SR. DR FOR THE RESPONDENT SHRI MANISH TIWARI, AR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A)-2, KOLKATA DATED 12.06.2018 FOR AY 2010-11. 2. THIS APPEAL OF REVENUE IS TIME BARRED BY 11 DAYS AND CONDONATION PETITION HAS BEEN FILED. AFTER PERUSING THE CONDONATION PETITION AND FINDING NO OBJECTION ON BEHALF OF THE LD. AR, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR H EARING. 3. THE SOLE ISSUE THAT HAS BEEN RAISED BY THE REVEN UE IS AGAINST THE ACTION OF THE LD. CIT(A) IN QUASHING THE REASSESSMENT ORDER OF AO DAT ED 22.12.2017 ON THE BASIS THAT THE STATUTORY NOTICE U/S. 143(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS NOT ISSUED AGAINST THE ASSESSEE AFTER RE OPENING THE ASSESSMENT OF THE ASSESSEE. THE GROUNDS OF APPEAL OF THE REVENUE READ AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN HOLDING THE IMPUGNED ASSESSMENT ORDER AS INVALID, V OID AB INITIO. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED BY NOT CONSIDERING THE PROVISION AS LAID DOWN IN SEC. 292B B WHERE IT HAS BEEN STATED THAT. 2 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 ' WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR RE ASSESSMENT, IT SHAL L BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROV ISION OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTI ON IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS A) NOT SERVED UPON HIM; OR B) NOT SERVED UPON HIM ON TIME; OR C) SERVED UPON HIM IN AN IMPROPER MANNER ... ' 3. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELE TE, AMEND OR MODIFY, ANY GROUND BEFORE OR AT THE TIME OF APPELLATE PROCEEDINGS. 4. BRIEFLY STATED THE FACTS AS NOTED BY THE AO ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF COMMODITY BROKING, TRADING IN SH ARES AND SECURITIES AND TRADING IN DERIVATIVES. THE AO NOTES THAT THE CASE OF ASSESSE E WAS REOPENED FOR REASSESSMENT AS THERE WAS INFORMATION THAT THE ASSESSEE BOOKED BOGUS LOSS OF RS.334.36 LAKHS IN ITS BOOKS AND AS A RESULT THE CONSEQUENT AMOUNT ESCAPED ASSESSMENT. AC CORDING TO AO, HE ISSUED NOTICE U/S. 148 OF THE ACT ON 31.03.2017 AND SERVED ON 31.03.20 17 VIA E-MAIL PROVIDED IN THE ITR REQUIRING THE ASSESSEE TO FILE RETURN IN THE PRESC RIBED FORM WITHIN 30 DAYS. ACCORDING TO AO, THE SAID NOTICE WAS ALSO SENT BY POST BUT THE P OSTAL AUTHORITIES RETURNED THE SAME UNSERVED. THEREAFTER THE AO NOTES THAT SINCE THE A SSESSEE FAILED TO COMPLY WITH NOTICES U/S. 148 & 142(1) OF THE ACT, THE LOSS CLAIMED BY THE AS SESSEE REMAINED UNVERIFIED. HENCE, THE AMOUNT OF LOSS OF RS.334.36 LAKHS WAS DISALLOWED TO BE SET OFF AGAINST INCOME/PROFIT AVAILABLE IN THE BOOKS OF THE ASSESSEE BY AN ORDER OF REASSESSMENT DATED 22.12.2017 U/S. 143(3)/154/147/144 OF THE ACT. AGGRIEVED, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO ALLOWED THE LEGAL ISSUE RAISED BY THE A SSESSEE. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US RAISING THE AFORESAID GROUNDS. 5. ASSAILING THE DECISION OF LD. CIT(A), THE LD. D R CONTENDED THAT THE AO ISSUED NOTICE FOR REOPENING ON 31.03.2017 DIRECTING THE AS SESSEE TO FILE THE RETURN OF INCOME WITHIN 30 DAYS OF TIME. HOWEVER, THE ASSESSEE DID NOT FIL E ANY RETURN OF INCOME AND DID NOT RESPOND TO HIS NOTICE. SO HE RIGHTLY MADE THE DISAL LOWANCE EX PARTE U/S. 144 OF THE ACT. ACCORDING TO LD. DR, THE RETURN OF INCOME FILED AFT ER THE PERIOD OF TIME PRESCRIBED BY THE 3 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 AO IN THE NOTICE U/S. 148 OF THE ACT IS NON-EST AND , THEREFORE, THE AO RIGHTLY PROCEEDED TO ASSESS THE INCOME OF THE ASSESSEE U/S. 144 OF THE A CT. THE LD. CIT, DR ASSISTING THE DR CITED THE DECISION OF THE HONBLE JAMMU & KASHMIR H IGH COURT WHEREIN THE HONBLE HIGH COURT IN PCIT VS. M/S. BROADWAY SHOE CO., ITA NO. 1 0/2017 DATED 11.10.2018 HELD THAT THE RETURN OF INCOME FILED AFTER THE TIME LIMIT PRE SCRIBED IS NON-EST. ACCORDING TO LD. DR, THAT THIS TRIBUNAL IN THE CASE OF PANKAJ DUTTA VS. ITO IN ITA NO. 2206/KOL/2016 FOR AY 2009-10 DATED 17.11.2017 HAS HELD AS UNDER; AND DRE W OUR ATTENTION SPECIFICALLY TO PARA 8 TO UNDERSCORE THAT IF THE ASSESSEE PURSUANT TO SEC. 14 8 NOTICE DOES NOT FILE RETURN, THEN AO HAVE TO COMPLETE THE ASSESSMENT U/S. 144 OF THE ACT AND THEN THERE IS NO NEED TO ISSUE NOTICE U/S. 143(2) OF THE ACT: 4. AFTER HEARING RIVAL CONTENTIONS PERUSING THE PAP ERS ON RECORD AND ORDER OF THE AUTHORITIES BELOW, I HOLD AS FOLLOWS. 5. I HAVE PERUSED THE ASSESSMENT RECORD PRODUCED BY THE LD. DEPARTMENTAL REPRESENTATIVE. ON PERUSAL OF THE ORDER SHEET ENTRIE S MADE FROM 20.03.2014 , IT IS CLEAR THAT NO NOTICE UNDER SECTION 143(2) OF THE INCOME TA X ACT, 1961 (ACT) WAS ISSUED TO THE ASSESSEE. THE SUBMISSION OF THE LEARNED DR THAT THE ASSESSEE DID NOT FILE A RETURN OF INCOME AND HENCE NO NOTICE IS REQUIRED TO BE ISSUED UN DER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (ACT) IS FACTUALLY INCORRECT. THE ASS ESSEE HAD FILED ITS RETURN OF INCOME . ON THESE FACTS THE PROPOSITION OF LAW IS BROUGHT OUT B Y THE SMC 2, BENCH, NEW DELHI, IN THE CASE OF MS. MEENAKSHI AGGARWAL, ITA NO. 4171/DEL/20 15 ORDER DATED 16.10.2015 WHEREIN AT PARA 4 AND 5 IT IS HELD AS FOLLOWS: 4. ON THIS FACTUAL MATRIX, I FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE ITAT, C BENCH, BANGALORE IN ITS ORDER DATED 10.10.2014 IN THE CASE OF SHRI G.N. MOHAN RAJU VS ITO PASSED IN ITA NO. 24 2 & 243(BANG) 2013 (A.YRS 2006-07 & 2007-08), HAS BEEN HELD AS FOLLOWS: 7. THIS BRINGS AS TO THE CRUX OF THE ISSUE I.E. WHE THER NOTICES UNDER SECTION 143(2) IS MANDATORY IN A REOPENED PROCEDURE AND WHETHER NOTICES ISSUED PRIOR TO THE REOPENING WOULD SATISFY THE REQUIREMENT SPECIFIED U/S 143(2) OF THE ACT. THAT I SSUE OF A NOTICE U/S 143(2) OF THE ACT, IS MANDATORY EVEN IN A REASSESSMENT PROCEEDING INITIAT ED U/S 148 OF THE ACT HAS BEEN CLEARLY LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S. ALPINE ELECTRONICS ASIA PTE LTD., CONSIDERING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AT PARA 24 OF THE JUDGMENT THEIR LORDSHIP HAS HELD THA T SECTION 143(2) WAS APPLICABLE TO A PROCEEDINGS U/S 147/148 ALSO, SINCE PROVISO TO SECT ION 148 OF THE ACT, GRANTED CERTAIN SPECIFIC LIBERTIES TO THE REVENUE, WITH REGARD TO EXTENSION OF TIME FOR SERVING SUCH NOTICES. NO DOUBT, HONBLE MADRAS HIGH COURT IN THE CASE OF AREVA T AN D D INDIA LTD., (SUPRA) HAD HELD THAT ISSUE OF NOTICE U/S 143(2) WAS PROCEDURAL IN NATURE. HOWE VER, COORDINATE BENCH IN THE CASES OF M/S. AMIT SOFTWARE TECHNOLOGIES PVT. LTD, (SUPRA) AFTER CONSIDERING THE DECISION OF THE HONBLE MADRAS HIGH COURT AS WELL AS DELHI HIGH COURT HAD H ELD THAT SECTION 143(2) OF THE ACT, WAS A MANDATORY REQUIREMENT AND NOT A PROCEDURAL ONE. OF COURSE, IN THE CASE BEFORE US A NOTICE U/S 4 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 143(2) OF THE ACT HAS BEEN ISSUED TO THE ASSESSEE, BUT ON THE DATE WHEN SUCH NOTICE WAS ISSUE VIZ., 23.09.2010 ASSESSEE HAD NOT FILED ANY RETURN PURSUANT TO THE REOPENING NOTICE UNDER SECTION 148 OF THE ACT. FIRST INSTANCE WHEN THE ASSESSEE REQUESTED THE AO TO TREAT THE RETURNS ORIGINALLY FILED BY IT AS RETURNS FILED PURSUANT TO THE NOTICES U/S 148 OF THE ACT, WAS ON 05.10.2010 WHICH IS CLEAR FROM THE NARRATION IN THE ORDER SHE ET WHICH IS REPRODUCED HERE UNDER: SRI M. SRINIVAS RAO MANNAN, CA APPEARED IN RESPONSE TO NOTICES ISSUED U/S 143(2) & 142(1) AND REQUESTED THAT THE RETURN OF INCOME FILED ORIGI NALLY SHALL BE TREATED AS RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148. HE HAS BEEN ASKED TO EXPLAIN AS TO WHY A SUM OF RS. 1,00,00,000/- (RS. ONE CRORE) RECEIVED FROM WIFI NETWORKS PVT. LT D. SHOULD NOT BE TREATED AS REVENUE RECEIPT AND TAXED ACCORDINGLY. THE CASE IS POSTED FOR FINAL HEARING ON 20.10.2010 AT 3.30 PM. NO FURTHER ADJOURNMENT WILL BE GRANTED. IF NO COMPLIAN CE IS FORTHCOMING ON THAT DAY, ASSESSMENT WILL BE COMPLETED BRINGING TO TAX RS. 1.00 (RS. ONE CRORE) AS REVENUE RECEIPT AS PER THE PROVISIONS OF SEC. 28 (VA) OF THE ACT. 8. A LOOK AT SECTION 143(2) IS CALLED FOR AT THIS J UNCTURE. IT IS REPRODUCED HEREUNDER: 143(2) WHERE A RETURN HAS BEEN FURNISHED UNDER SECT ION 139 , OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142, THE AO SHALL (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE, SERVE ON THE ASSESSEE A NOTICE SPECIFYING PARTICULARS OF SUC H CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO B E SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED ANY EVIDENCE OR PARTICULARS SPECIFIED THER EIN OR ON WHICH THE ASSESSEE MAY RELY, IN SUPPORT OF SUCH CLAIM: (PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL B E SERVED ON THE ASSESSEE ON OR AFTER THE 1 ST DAY OF JUNE, 2003). (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( 1), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID HIS TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICER OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPP ORT OF THE RETURN. (PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE A FTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED ). ONCE THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS SUBJECT TO PROCESSING U/S 143(1) OF THE ACT, PROCEDURE OF ASSESSMENT PURSUANT TO SUCH A RETURN, IN OUR OPINION COME TO AN END, SINCE AO DID NOT ISSUE ANY NOTICE WITHIN THE 6 MONTHS PERIOD MEN TIONED IN PROVISO TO SECTION 143(2)(II). NO DOUBT, IF THE INCOME HAS BEEN UNDERSTATED OR THE IN COME HAS ESCAPED ASSESSMENT, ON AO IS HAVING THE POWER TO ISSUE NOTICE U/S 148 OF THE IT ACT. NOTICE U/S 148 OF THE ACT, ISSUED TO THE ASSESSEE REQUIRED IT TO FILE A RETURN WITHIN 30 DAY S FROM THE DATE OF SERVICE OF SUCH NOTICE. THERE IS NO PROVISION IN THE ACT, WHICH WOULD ALLOW ON AO TO TREAT THE RETURN WHICH WAS ALREADY SUBJECT TO A PROCESSING U/S 143(1) OF THE IT ACT, A S A RETURN FILED PURSUANT TO A NOTICE SUBSEQUENTLY ISSUED U/S 148 OF THE ACT. HOWEVER, ON CE AN ASSESSEE ITSELF DECLARE BEFORE THE AO THAT HIS EARLIER RETURN COULD BE TREATED AS FILED P URSUANT TO NOTICE U/S 148 OF THE IT ACT, THREE RESULTS CAN FOLLOW. ASSESSING OFFICER CAN EITHER SA Y NO, THIS WILL NOT BE ACCEPTED, YOU HAVE TO FILE A FRESH RETURN OR HE CAN SAY THAT 30 DAYS TIME PERI OD 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 ASSESS MENT AND CANNOT MAKE AN ASSESSMENT UNDER SECTION 143(3). ON THE OTHER HAND, IF THE AO CHOSE TO ACCEPT ASSESSEES REQUEST, HE CAN INDEED 5 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 MAKE AN ASSESSMENT UNDER SECTION 143(3). IN THE CASE BEFORE US, ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147. OR IN O THER 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 PU RSUANCE TO NOTICES U/S 148 OF THE IT ACT WAS RECEIVED. THIS REQUEST, IN THE GIVEN CASE, HAS BEEN MADE ONLY ON 05.10.2010. ANY ISSUE 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 ISSUE OF NOTICE U/S 143(2) OF THE IT ACT, AND THE ASSESSMENTS WERE DONE WITHOUT FOLLO WING THE MANDATORY REQUIREMENT U/S 143(2) OF THE IT ACT. THIS IN OUR OPINION, RENDER THE SUBS EQUENT PROCEEDINGS ALL INVALID. LEARNED CIT (A) HAD ONLY ADJUDICATED ON A POSITION WHERE THERE WAS NO SERVICE OF NOTICES U/S 143(2) OF THE IT ACT. HE HAD NOT DEALT WITH THE SCENARIO, WHERE N OTICE WAS ISSUED PRIOR TO THE FILING OF RETURN BY THE ASSESSEE. WE, THEREFORE, QUASH THE ASSESSMEN T DONE FOR THE IMPUGNED ASSESSMENT YEARS. SINCE THE APPEALS OF THE ASSESSEE ARE ALLOWED ON IT S GROUND 3, OTHER GROUNDS ARE NOT ADJUDICATED. 6. RESPECTFULLY FOLLOWING THE PROPOSITIONS OF LAW L AID DOWN IN VARIOUS CASE LAWS CITED IN THIS TRIBUNAL ORDER REFERRED ABOVE, I HOLD THAT THE ASSESSMENT MADE IN THIS CASE AS BAD IN LAW. HENCE THE SAME IS QUASHED. (EMPHASIS GIVEN BY US) 6. THEREAFTER, THE LD. CIT, DR DREW OUR ATTENTION T O THE ORDER OF THE HONBLE J&K HIGH COURT IN PCIGT VS. M/S. BROADWAY SHOE CO. (SUPRA) WHEREIN THE HONBLE HIGH COURT HELD AS AT PARA 8 AS UNDER: 8. ADMITTEDLY IN THE INSTANT CASE, THE RETURN WAS FILED BY THE ASSESSEE AFTER THE TIME PRESCRIBED FOR FILING RETURN UNDER SECTIONS 139(1) AND 139(4) HAD EXPIRED. THEREFORE, THE RETURN FILED BY THE ASSESSEE HAS TO BE TREATED AS N ON-EST. THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED ON THE GROUND THAT THE RE TURN FOR THE ASSESSMENT YEAR 2005-06 WAS THE FIRST EVER RETURN FILED BY THE ASSESSEE AND WAS FILED ON 13.02.2008. THE ASSESSING OFFICER ASKED TO EXPLAIN THE OPENING CAPITAL AND SOURCE OF ADVANCES THROUGH NOTICES ON VARIOUS DATES FROM DECEMBER 2012 TO FEBRUARY 2013. HOWEVER, NO RESPONSE WAS MADE BY THE ASSESSEE. SUBSEQUENTLY, THE ASSESSING OFFICER VIDE DRAFT LETTER DATED 28.02.2013 ASKED TO COMPLY AND GIVE RESPONSE TO THE DRAFT ASSESSMENT OR DER ON 11.03.2013. THE ASSESSEE DID NOT RESPOND TO THE DRAFT ASSESSMENT ORDER WHERE CERTAIN ADDITIONS WERE PROPOSED ON ACCOUNT OF UNEXPLAINED OPENING CAPITAL BALANCES OF PARTNER, UN EXPLAINED LOAN EXTENDED TO MR. AND MRS. SHAH AND DISALLOWANCE OF INTEREST. IN ABSENCE OF AN Y EXPLANATION, THE ASSESSING OFFICER MADE THE ADDITIONS. THE NOTICE UNDER SECTION 143(2) IS REQUIRED TO BE GIVEN ONLY WHEN RETURN IS FURNISHED. FURNISHING OF THE RETURN IS A SINE QUA NON FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. IF NO RETURN IS FURNISHED BY THE ASSESSEE, THERE C AN BE NO REASON FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY A DIVISION BENCH OF THIS COURT IN THE CASE OF AZZIZ Q AZI & BROTHERS V. ITO, (1974) TAX LR 540 (J& K). 7. THUS, ACCORDING TO LD. CIT, DR, THE AO ACTED IN CONSONANCE WITH THE ORDER OF HONBLE J&K HIGH COURT AND TREATED THE RETURN OF IN COME FILED BY THE ASSESSEE BELATEDLY ON 20.11.2017 AS NON-EST AND PROCEEDED TO PASS BEST JU DGMENT ASSESSMENT U/S. 144 OF THE ACT 6 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 WHICH IS IN ACCORDANCE TO LAW AND AOS ORDER HAS TO BE UPHELD BY REVERSING THE LD. CIT(A)S ORDER. 8. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE CON TENDED THAT THE NOTICE U/S. 143(2) OF THE ACT IS A MANDATORY IN NATURE AND THE AO IS DUTY BOUND TO ISSUE AS WELL AS SERVE UPON THE ASSESSEE NOTICE U/S.143(2) OF THE ACT BEFORE FRAMIN G THE ASSESSMENT. IT WAS POINTED OUT BY THE LD. COUNSEL THAT THE ASSESSEE HAD FILED THE RET URN OF INCOME THOUGH BELATEDLY ON 21.09.2017 AND 20.11.2017 AND, THEREFORE, ACCORDING TO HIM, THE AO HAD TO ISSUE 143(2) NOTICE AND THEN HE SHOULD HAVE ONLY FRAMED ASSESSME NT U/S. 143(3) OF THE ACT AND NOT U/S. 144 OF THE ACT. THE LD. AR ALSO RELIED ON THE ORDE R OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF U. P. STATE INDUSTRIAL DEVELOPMENT CORP ORATION LTD. VS. CIT 2016(7) TMI 1327 WHEREIN THE HONBLE HIGH COURT HAS UPHELD THE CONT ENTION OF THE ASSESSEE ON THIS LEGAL ISSUE AND ALSO RELIED UPON THE CASE LAWS OF HONBLE APEX COURT IN HOTEL BLUE MOON (SUPRA) AND HEAVILY RELIED UPON THE DECISION OF HONBLE DEL HI HIGH COURT IN SHRIJAI SHIV SHANKAR TRADERS (P.) LTD. (SUPRA) IN WHICH SIMILAR ISSUE AR OSE AND ALSO PLACED RELIANCE ON OTHER CASE LAWS CITED BY THE LD. CIT(A) TO QUASH THE REASSESSM ENT ORDER. AND HE DOES NOT WANT US TO INTERFERE IN THE ORDER OF LD. CIT(A). 9. AFTER HEARING BOTH PARTIES IT IS NOTED THAT ASSE SSEE IS A COMPANY ENGAGED IN THE BUSINESS OF COMMODITY BROKING TRADING IN SHARES AND SECURITIES AND TRADING IN DERIVATIVES. FOR THE RELEVANT ASSESSMENT YEAR, IT FILED ITS RETU RN OF INCOME U/S. 139(1) OF THE ACT ON 15.09.2010 DECLARING LOSS OF RS.15,13,240/-. THE S AID RETURN OF INCOME WAS PICKED UP FOR SCRUTINY ASSESSMENT AND AN ORDER OF ASSESSMENT U/S. 143(3) OF THE ACT WAS FRAMED ON 22.03.2013 AT AN ASSESSED LOSS OF RS.9,14,048/-. S UBSEQUENTLY THE CASE OF ASSESSEE WAS REOPENED FOR THE FIRST TIME BY ISSUE OF NOTICE U/S. 148 OF THE ACT TO CONSIDER THE DISALLOWANCE OF DELAYED PAYMENT OF PF&ESI AMOUNTING TO RS.70,578 /-. THE SAID REASSESSMENT ORDER WAS PASSED ON 30.10.2014 U/S. 143(3) R.W.S. 147 OF THE ACT WHEREIN THE ASSESSED LOSS WAS COMPUTED AT RS.8,43,470/-. SUBSEQUENTLY ANOTHER NO TICE DATED 31.03.2017 U/S. 148 OF THE ACT WAS ALLEGEDLY ISSUED VIA EMAIL TO THE APPELLAN T IN RESPONSE TO SUCH NOTICE U/S. 148 THE ASSESSEE FILED A LETTER DATED 21.09.2017 REITERATIN G THE RETURN OF INCOME ORIGINALLY FILED 7 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 DURING ORIGINAL ASSESSMENT U/S. 143(2) AND THEREAFT ER THE ASSESSEE ALSO FILED BEFORE THE AO A COPY OF ITS ORIGINAL RETURN OF INCOME ON 20.11.2017 DISCLOSING THE LOSS OF RS.15,13,237/- (WHICH WAS FILED IN THE ORIGINAL RETURN OF INCOME F ILED U/S. 139 OF THE ACT DATED 15.09.2010). [ THESE FACTS OF ASSESSEE FILING LETTER DATED 21.09.2 017 AND FURNISHING A COPY OF ORIGINAL RETURN OF INCOME BEFORE AO ON 20.11.2017 HAS NOT BE EN MENTIONED IN THE IMPUGNED REASSESSMENT ORDER PASSED BY AO ON 22.12.2017. HOW EVER, THESE FACTS WERE CULLED OUT OF THE REMAND REPORT OF AO WHEN CALLED UPON BY LD. CIT (A ).] COMING BACK TO IMPUGNED REASSESSMENT ORDER, THE AO NOTING THAT THERE BEING ONLY PARTIAL COMPLIANCE BY THE ASSESSEE, HE PASSED THE SECOND REASSESSMENT U/S. 143(3)/154/1 47/144 DATED 22.12.2017 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT A SUM OF RS.3,3 4,36,000/- BY DISALLOWING A LOSS OF RS.3,34,36,000/-, WHICH ACTION OF AO WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT(A) WHO WAS PLEASED TO QUASH THE REASSESSMENT ORDER BY PASSING THE ORDER WHICH IN TURN IS IMPUGNED BEFORE US. THE LD. CIT(A) HAS QUASHED THE AOS ORDER BY HOLDING AS UNDER: THIS BRINGS AS TO THE CRUX OF THE ISSUE I.E. WHE THER NOTICES UNDER SECTION 143(2) IS MANDATORY IN A REOPENED PROCEDURE. THAT ISSUE OF A NOTICE U/ S 143(2) OF THE ACT, IS MANDATORY EVEN IN A REASSESSMENT PROCEEDING INITIATED U/S 148 OF THE AC T HAS BEEN CLEARLY LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF M/S. ALPINE ELECTRO NICS ASIA PTE LTD., CONSIDERING THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF H OTEL BLUE MOON (SUPRA) AT PARA 24 OF THE JUDGMENT THEIR LORDSHIP HAS HELD THAT SECTION 143(2 ) WAS APPLICABLE TO A PROCEEDINGS U/S 147/148 ALSO. NO DOUBT, IF THE INCOME HAS BEEN UNDE RSTATED OR THE INCOME HAS ESCAPED ASSESSMENT, ON AO IS HAVING THE POWER TO ISSUE NOTI CE U/S 148 OF THE I T ACT. NOTICE U/S 148 OF THE ACT, ISSUED TO THE ASSESSEE REQUIRED IT TO FILE A RETURN WITHIN 30 DAYS FROM THE DATE OF SERVICE OF SUCH NOTICE. IN THE LIGHT OF THE ABOVE, I AM OF THE VIEW THAT THE AO HAS NOT ISSUED NOTICE U/S 143(2) WHICH IS MANDATORY. I ALSO OF THE VIEW THAT IN COMPLETING THE ASSESSMENT U/S 148 OF THE ACT, COMPLIANCE OF THE PROCEDURE LAID DO WN U/S 143 AND 143(2) IS MANDATORY. AS PER RECORD, I FIND THAT THERE WAS NO NOTICE ISSUED U/S 143(2) OF THE ACT WHICH IS VERY MUCH ESSENTIAL FOR REASSESSMENT AND IT IS A FAILURE ON T HE PART OF THE AO FOR NOT COMPLYING WITH THE PROCEDURE LAID DOWN IN SECTION 143(2) OF THE ACT. I F THE NOTICE IS NOT ISSUED TO THE ASSESSEE BEFORE COMPLETION OF THE ASSESSMENT, THEN THE REASS ESSMENT IS NOT SUSTAINABLE IN THE EYES OF THE LAW AND DESERVES TO BE CANCELLED. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ISSUE IN DISPUTE RAISED IN ADDITIONAL GRO UND RELATING TO NON-ISSUE OF THE MANDATORY NOTICE U/S. 143(2) OF THE ACT IS DECIDED IN FAVOUR OF THE ASSESSEE AND I HOLD THAT THE IMPUGNED ASSESSMENT ORDER DATED 22.12.2017 PASSED U/S.143(3) /154/147/144 OF THE ACT BY THE AO IS INVALID. MY VIEW IS SUPPORTED BY THE VARIOUS JUDGM ENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT. THE RELEVANT PORTION OF THE HEAD NOTES OF VA RIOUS JUDGMENTS OF THE HON'BLE COURTS HAVE ALREADY DISCUSSED IN THE BODY OF THE ORDER. I FIND THAT THE AO HAS NOT ISSUED THE NOTICE U/S 143(2) OF THE ACT IN THIS CASE BEFORE COMPLETING TH E SCRUTINY ASSESSMENT, THEREFORE THE IMPUGNED ASSESSMENT ORDER BEFORE US IS INVALID, VOI D AB INITIO AND SO THE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW AND HENCE, I CAN CEL THE SAME BY ALLOWING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE ON THIS ISSUE. IN THE RESULT, THE ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED. RESPECTFULLY FOLLOWING THE PROPOSITIONS OF LAW LAID DOWN IN VARIOUS 8 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 CASE LAWS REFERRED ABOVE, I HOLD THAT THE NON-ISSUE OF NOTICE U/S 143(2) AFTER FILING OF THE RETURN OF THE ASSESSEE, BY WAY OF ONLINE, MAKES THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S, 147 BAD IN LAW. HENCE, I QUASH THE SAME AND ALLOW T HE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. SINCE I HAVE ALREADY QUASHED THE ASSESSME NT PROCEEDINGS ON THIS JURISDICTIONAL GROUND AND THE ASSESSMENT ORDER IS HELD TO BE VOID AB INITIO, THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE FORM OF GROUNDS OF APPEAL AND ALSO IN THE FORM OF ADDITION GROUNDS OF APPEAL HAVE BECOME ACADEMIC IN NATURE, HENCE, THE SAME ARE NOT BEING ADJUDICATED UPON. THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. WE NOTE THAT LD. CIT(A) HAS RELIED UPON THE FOL LOWING JUDICIAL PRECEDENTS TO ARRIVE AT HIS DECISION TO QUASH THE ASSESSMENT ORDER FOR NON- ISSUE OF NOTICE U/S. 143(2) OF THE ACT. I) ON THIS ISSUE AS TO WHETHER NOTICE U/S. 143(2) WAS MANDATORY TO PASS THE ASSESSMENT ORDER, THE HON'BLE SUPREME COURT OF INDIA IN THE CA SE OF HOTEL BLUE MOON [2010] 188 TAXMAN 113 SC) HAS HELD AS UNDER:- 'WHETHER FOR DETERMINATION OF UNDISCLOSED INCOME FO R A BLOCK PERIOD UNDER PROVISIONS OF SECTION 158BC, PROVISIONS OF SECTION 142 AND SUB-SE CTIONS (2) AND (3) OF SECTION 143 ARE APPLICABLE AND NO ASSESSMENT CAN BE MADE WITHOUT IS SUING NOTICE UNDER SECTION 143(2) - HELD, YES WHETHER, THEREFORE, WHERE ASSESSING OFFICER, FOR AN Y REASON, REPUDIATES RETURN FILED BY ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 158BC( A), HE MUST NECESSARILY ISSUE A NOTICE UNDER SECTION 143(2) WITHIN TIME PRESCRIBED IN PROV ISO TO SECTION 143(2) HELD, YES THE APPELLATE TRIBUNAL HELD THAT NON-ISSUE OF A NOT ICE UNDER SECTION 143(2) IS ONLY A PROCEDURAL, IRREGULARITY AND THE SAME IS CURABLE. ON APPEAL, THE HIGH COURT, DISAGREEING WITH THE TRI BUNAL, HELD THAT THE PROVISIONS OF SECTION 142 AND SUB-SECTIONS (2) AND (3) OF SECTION 143 WOU LD HAVE MANDATORY APPLICATION IN A CASE WHERE THE ASSESSING OFFICER IN REPUDIATION OF RETUR N FILED IN RESPONSE TO' A NOTICE ISSUED UNDER SECTION 158BC(A) PROCEEDS TO MAKE AN INQUIRY. A READING OF THE PROVISION WOULD CLEARLY INDICATE T HAT IF THE ASSESSING OFFICER, FOR ANY REASON REPUDIATES THE RETURN FILED BY THE ASSESSEE IN RESP ONSE TO NOTICE UNDER SECTION 158BC (A), HE MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2). OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURAB LE AND, THEREFORE, THE REQUIREMENT OF A NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WIT H. THE CLARIFICATION GIVEN BY THE CBDT IN ITS CIRCULAR NO. 717, DATED 14-8-1995, HAS A BINDING EFFECT ON THE DEPARTMENT, BUT NOT ON THE COURT. THI S CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPECT OF SERVICE OF NOTICE UNDER SUB-SECTION (2) OF SECTION 143. ACCORDINGLY, EVEN FOR THE PURPOSE OF CHAPTER XLV-B , FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF SECTION 158BC, THE PROVISIO NS OF SECTION 142 AND SUB-SECTIONS (2) AND 9 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 (3) OF SECTION 143 ARE APPLICABLE AND NO ASSESSMENT CON BE MODE WITHOUT ISSUING A NOTICE UNDER SECTION 143(2). [PARA 15] SECTION 158BH PROVIDES FOR APPLICATION OF THE OTHER PROVISIONS OF THE ACT. IT READS: 'SAVE AS OTHERWISE PROVIDED IN THIS CHAPTER, ALL THE OTHER P ROVISIONS OF THIS ACT SHALL APPLY TO ASSESSMENT MADE UNDER THIS CHAPTER.' THIS IS AN ENA BLING PROVISION, WHICH MAKES ALL THE PROVISIONS OF THE ACT, SAVE AS OTHERWISE PROVIDED, APPLICABLE TO PROCEEDINGS OF BLOCK ASSESSMENT. THE PROVISIONS WHICH ARE SPECIFICALLY I NCLUDED ARE THOSE WHICH ARE AVAILABLE IN CHAPTER XIV-B, WHICH INCLUDES SECTION 142 AND SUB-S ECTIONS (2) AND (3) OF SECTION 143. ON A CONSIDERATION OF THE PROVISIONS OF CHAPTER XIV-B, T HE REASONING AND THE CONCLUSION REACHED BY THE HIGH COURT ARE TO BE UPHELD. [PARA 18]' [EMP HASIS GIVEN BY US] II) SIMILARLY, HON'BLE MADRAS HIGH COURT IN THE CASE OF C. PALANIAPPAN (SUPRA) EXACTLY ON SIMILAR CIRCUMSTANCES HELD THAT THE REOPEN ASSESSME NT U/S. 147 R.W.S. 148 OF THE ACT, NOTICE U/S. 143(2) OF THE ACT WITHIN A PERIOD OF 12 MONTHS IS MANDATORY. HON'BLE MADRAS HIGH COURT HELD AS UNDER: 'WE HEARD LEARNED COUNSEL FOR THE PARTIES. LEARNED COUNSEL APPEARING FOR THE REVENUE SUBMITTED THAT THE APPELLATE TRIBUNAL FAILED TO APP RECIATE THE FACT THAT THE ASSESSMENT WAS COMPLETED ONLY UNDER SECTION 143(1) OF THE ACT AND HENCE THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT TO CONSIDER THE CORRECT QUAN TUM OF INTEREST ALLOWABLE AS DEDUCTION IN COMPUTING THE INCOME FROM HOUSE PROPERTY WAS CORREC T AS THE ASSESSEE HAD NOT FURNISHED RELEVANT FACTS AND EVIDENCE ALONG WITH THE RETURN. LEARNED COUNSEL FURTHER SUBMITTED THAT THE APPELLATE TRIBUNAL ERRED IN ITS CONCLUSION THAT IN THE CASE OF REOPENED ASSESSMENT, ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN 12 MO NTHS IS STATUTORY AND THE TRIBUNAL WAS ALSO WRONG IN DELETING THE ISSUE ON TECHNICAL GROUNDS WI THOUT GOING INTO THE MERITS OF THE CASE. IN RESPECT OF QUESTION NO. 1, WE FIND THAT ON A SIM ILAR ISSUE WHICH CAME UP FOR CONSIDERATION IN CIT V. M. CHELLAPPAN [2006] 281 ITR 444, A DIVIS ION BENCH OF THIS COURT, IN WHICH ONE OF US WAS A PARTY (P.D. DINAKARAN J.) APPLYING THE RAT IO LAID DOWN BY THE PUNJAB AND HARYANA HIGH COURT IN VIPAN KHANNA V. CIT [2002] 255 ITR 22 0 (P & H), HELD AS FOLLOWS (PAGE 445): ' ..... ADMITTEDLY, NO NOTICES UNDER SECTION 143(2) OF THE ACT WERE SERVED ON THE ASSESSES WITHIN THE STIPULATED PERIOD OF TWELVE MONTHS AND, THEREFO RE, THE PROCEEDINGS UNDER SECTION 143 OF THE ACT COME TO AN END AND THE MATTER BECOMES FINAL . IN VIEW OF THE ABOVE, THE FIRST QUESTION NOW RAISED , THEREFORE, STANDS CONCLUDED IN FAVOUR OF THE ASSESSEE.' [EMPHASIS GIVEN BY US] III) SIMILARLY, HON'BLE CALCUTTA HIGH COURT IN THE CASE OF MA KAMAKHYAYA ENTERPRISES (SUPRA) EXACTLY ON SIMILAR CIRCUMSTANCES HELD THAT NOTICE U /S. 143(2) OF THE ACT WITHIN A PERIOD OF 12 MONTHS IS MANDATORY. HON'BLE CALCUTTA HIGH COURT DI SCUSSED THE FACTS AS UNDER: 'THERE IS NO DISPUTE THAT THE ASSESSEE FILED RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 31ST OCTOBER,2006 AND THE SAID RETURN WAS TAKEN UP FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 25TH OCTOBER, 2007, AS IT APPEARS FROM THE POSTAL RECEIPT PLACED ON RECORD BY THE REVENUE. HOWEVER, THE SAID NOTICE WAS RECEIVED BY THE ASSESSEE ON 3RD NOVEMBER, 2007 I.E. AFTER THE EXPIRY OF THE PER IOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED BY THE ASSESSEE.' AND FINALLY, HON'BLE HIGH COURT HAS HELD AS UNDER: 10 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 'ON ,A PLAIN READING OF THE AFORESAID PROVISION, IT IS ABUNDANTLY CLEAR THAT 'SERVICE' ON THE ASSESSEE WITHIN 12 MONTHS FROM THE END THE MONTH IN WHICH THE RETURN WAS FURNISHED IS THE ESSENTIAL REQUIREMENT OF LAW AND NOT MERELY ISSUE O F SUCH NOTICE WITHIN THE SAID DATE. WE, THUS, FIND THAT IN THE CASE BEFORE US, THE TRIB UNAL WAS QUITE JUSTIFIED IN HOLDING THAT BY MERE ISSUE OF NOTICE BEFORE THE EXPIRY OF 12 MONTH FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FURNISHED, IF THE SAME WAS RECEIVED AFTE R THE EXPIRY OF 12 MONTHS BY THE ASSESSEE WILL NOT VALIDATE THE PROCEEDING FOR ASSESSMENT WE, THEREFORE, FIND THAT NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS PEAL AND, CONSEQUENTLY, WE DISMISS THIS APPEAL SUMMARILY .' [EMPHASIS GIVEN BY US] IV) THE HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF MUKESH KUMAR AGRAWAL [2012] 25 TAXMANN.COM 112 (ALLAHABAD) HAS AFTER TAKING NOTE O F THE OBJECTION RAISED BY THE DEPARTMENT THAT EVEN IF NOTICE IS NOT SERVED UPON THE ASSESSEE IN THE LIGHT OF SEC. 292BB IT SAVES THE ACTION OF THE AO, THE HONBLE HIGH COURT HELD AS UNDER:- 'SHRI A. N. MAHAJAN, LEARNED COUNSEL APPEARING FOR THE REVENUE, STATES THAT THOUGH THE CASE APPEARS TO BE COVERED BY THE JUDGMENT IN ASSTT CIT V. HOTEL BLUE MOON [2010] 321 ITR 362/188 TAXMAN 113 (SC) THE SUPREME COURT DID NOT H AVE THE OCCASION TO CONSIDER SECTION 292BB AS INSERTED BY THE FINANCE ACT; 2008, WITH EF FECT FROM APRIL 1, 2008. WE HAVE GONE THROUGH THE JUDGMENT IN HOTEL BLUE MOO N (SUPRA) AND SECTION 292BB AS INSERTED IN THE INCOME-TAX ACT BY THE FINANCE ACT, 2008, AND DO NOT FIND THAT THE CONSIDERATION OF SECTION 292 BB WOULD HAVE MADE ANY DIFFERENCE TO THE REASONING AND THE CONCLUSIONS IN THE JUDGMENT. THE SUPREME COURT HELD IN HOTEL BLUE MOON'S CASE (S UPRA) THAT IF THE ASSESSING OFFICER, FOR ANY REASON, REPUDIATES THE RETURN FILED BY AN ASSES SEE IN RESPONSE TO THE NOTICE UNDER SECTION 158BC (A) OF THE ACT RELATING TO A BLOCK ASSESSMENT ; THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2). IT WAS FURTHER HELD THAT BY MAKING THE ISSU E OF NOTICE MANDATORY, SECTION 158BC, DEALING WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE T HE VERY FOUNDATION FOR JURISDICTION. SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON, WHO IS FOUND TO HAVE UNDISCLOSED INCOME. THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT B E DISPENSED WITH. SECTION 292BB IS A RULE OF EVIDENCE, WHICH VALIDATE S THE NOTICE IN CERTAIN CIRCUMSTANCES. THE NEWLY INSERTED SECTION 292BB PROVIDES THAT WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDINGS OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF TH IS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCOR DANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OB JECTION IN ANY PROCEEDING OR INQUIRY UNDER THE ACT THAT THE NOTICE WAS NOT SERVED UPON HIM OR NOT SERVED UPON HIM IN TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. IN THE PRESENT CASE, THE TRIBUNAL HAS RETURNED THE FINDINGS THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ADMITTEDLY NOT ISSUED IN THIS CASE. THE ASSESSING AUTHORITY THUS DID NOT HAVE JURISDICTION TO PROCEED FURTHER AND MAKE ASSESSMENT WE DO NOT FIND THAT THE NON-CONSIDERATION OF SECTIO N 292BB, WHICH IS RULE OF EVIDENCE, AND A DEEMING PROVISION TO VALIDATE THE NOTICE IN CERTAIN CIRCUMSTANCES, WILL HAVE ANY EFFECT ON THE 11 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 JUDGMENT IN HOTEL BLUE MOON (SUPRA). IT WAS HELD IN HOTEL BLUE MOON'S CASE (SUPRA) THAT THE VERY FOUNDATION OF THE JURISDICTION OF THE ASSESSIN G OFFICER IS ON THE ISSUANCE OF THE NOTICE UNDER SECTION 143(2). THE INCOME-TAX APPEAL IS DISMISSED.' [EMPHASIS GIVE N BY US] V) THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF TRA VANCORE DIAGNOSTICS (P.) LTD. [2016] 74 TAXMANN.COM 239 (KERALA) HAS HELD AS UNDER: 'IT IS INDUBITABLE FROM SECTION 143(2) THAT THE ASS ESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE SPECIFYING THE PARTICULARS OF SUCH CLAIM OF LOSS, EX ION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN, IF HE HAS REASON TO BELIEVE THA T ALL SUCH INADMISSIBLE. THE NOTICE IS ALSO TO DIRECT THE ASSESSEE TO PRODUCE OR CAUSE TO BE PRODU CED ANY EVIDENCE OR PARTICULATES SPECIFIED THEREIN OR ON WHICH THE ASSESSEE MAY RELY. A NOTIC E UNDER SECTION 143(2) IS THE HYPOSTASIS ON WHICH ANY PROCEEDINGS UNDER SECTION 143(3) OR A REA SSESSMENT UNDER SECTION 147 (IF THE TIME FOR REGULAR ASSESSMENT IS NOT OVER) WILL HAVE TO BE RESTED ON. [EMPHASIS GIVEN BY US] VI) IN PR. CITV. SHRIJAI SHIV SHANKAR TRADERS (P.) LTD. [IT APPEAL NO. 519 OF2015, DATED 14-10- 2015], THE HONBLE DELHI HIGH COURT HAS ALSO DISCUSSED THE DISTINCTION BETWEEN A FAILURE TO ISSUE NOTICE AND A FAILURE TO 'SERVE' A NOTICE ON AN ASSESSEE AND HELD THAT SECTION 292BB WOULD APPLY INSOFAR AS FAILURE OF 'SERVICE' O F NOTICE WAS CONCERNED AND NOT WITH REGARD TO THE FAILURE TO 'ISSUE' NOTICE. IN OTHER W ORDS, THE FAILURE OF THE ASSESSING OFFICER, IN RE-ASSESSMENT PROCEEDINGS, TO ISSUE NOTICE UNDER SE CFION143(2), PRIOR TO FINALIZING THE RE- ASSESSMENT, ORDER, CANNOT BE CONDONED BY REFERRING TO SECTION 292BB. VII) THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF SILVER LINE REPORTED UNDER [2016] 65 TAXMANN.COM 137 (DELHI) HAS HELD THAT MERELY BECAUS E THE ASSESSEE PARTICIPATES IN THE PROCEEDINGS PURSUANT TO SUCH NOTICE UNDER SECTION 1 48, IT DOES NOT OBVIATE THE MANDATORY REQUIREMENT OF THE ASSESSING OFFICER HAVING TO ISSU E TO THE ASSESSEE A NOTICE UNDER SECTION 143(2) BEFORE FINALIZING THE ORDER OF THE RE-ASSESS MENT. THE ASSESSING OFFICER HAS THE DISCRETION TO ISSUE A NOTICE UNDER SECTION 143(2) I F HE CONSIDERS IT 'NECESSARY OR EXPEDIENT', 'TO DO SO. THIS EXERCISE BY THE ASSESSING OFFICER U NDER SECTION 143(2) IS QUALITATIVELY DIFFERENT FROM THE ISSUANCE OF A NOTICE UNDER SECTI ON 142(1). WITH THE LEGAL POSITION BEING ABUNDANTLY CLEAR THAT A RE-ASSESSMENT ORDER CANNOT BE PASSED WITHOUT COMPLIANCE WITH THE MANDATORY REQUIREMENT OF NOTICE BEING ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE UNDER 12 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 SECTION 143(2), THE TRIBUNAL WAS RIGHT IN CONCLUDIN G THAT THE RE-ASSESSMENT ORDERS IN QUESTION WERE LEGALLY UNSUSTAINABLE. VIII) THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF SHRI JAI SHIV SHANKAR TRADERS (P.) LTD. [2015] 64 TAXMANN.COM 220 (DELHI) ON SIMILAR F ACTS AS IN THE PRESENT CASE HAS HELD AS UNDER.- THIS APPEAL BY THE REVENUE IS AGAINST AN ORDER DAT ED 18TH FEBRUARY, 2015 PASSED BY THE INCOME TAX APPELLATE TRIBUNA (ITAT) IN ITA NO.L068/ DEL/2013 FOR THE ASSESSMENT YEAR ('AY') 2008-09. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY IN QUESTION ON 16TH SEPTEMBER, 2008. THE SAID RETURN WAS ACCEPTED BY THE DEPARTMENT AND AN A CKNOWLEDGEMENT WAS ISSUED UNDER SECTION 143(1) OF THE ACT IT APPEARS THAT SUBSEQUENTLY THE RETURN WAS PICKED UP FOR SCRUTINY: AFTER RECORDING REASONS, NOTICE APPARENTLY WAS ISSUED BY THE ASSESSING OFFIC ER (AO) TO THE ASSESSEE ON 30TH MARCH, 2010 UNDER SECTION 148 OF THE ACT IT IS NOT IN DISP UTE THAT THIS NOTICE WAS NEVER SERVED ON THE ASSESSEE. SUBSEQUENTLY, ON 1ST OCTOBER, 2010, A NOTICE WAS IS SUED UNDER SECTION 143(2) OF THE ACT BY THE AO STATING THAT THERE WERE CERTAIN POINTS IN CONNEC TION WITH THE RETURN FILED FOR THE AY IN QUESTION ON WHICH THE AO 'WOULD LIKE SOME FURTHER I NFORMATION'. THE DATE FOR THE ASSESSEE TO ATTEND THE AO'S OFFICE WAS FIXED FOR 25TH OCTOBER, 2010. AGAIN, IT IS NOT IN DISPUTE THAT THIS NOTICE UNDER SECTION 143(2) OF THE ACT WAS ALSO NEV ER SERVED ON THE ASSESSEE . ON 21ST OCTOBER,2010, A NOTICE WAS ISSUED UNDER SEC TION 142 (1) OF THE ACT FIXING THE RETURNABLE DATE AS 29TH OCTOBER, 2010. A FURTHER NO TICE UNDER SECTION 142 (1) OF THE ACT WAS ISSUED ON 10TH DECEMBER, 2010 WITH A RETURNABLE DAT E OF 16TH DECEMBER, 2010. ON 16TH DECEMBER, 2010, THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE APPEARED AND INFORMED THE AO THAT THE RETURN ORIGINALLY FILED ON 16TH SEP TEMBER, 2008 SHOULD BE TREATED AS THE RETURN FILED PURSUANT TO THE NOTICE UNDER SECTION 148 OF T HE ACT. THE AO THEN PROCEEDED TO PASS AN ASSESSMENT ORDER O N 31ST DECEMBER, 2010 WHEREBY, INTER ALIA, AN ADDITION OF RS. L CRORE WAS MADE TO THE IN COME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CREDITS. IN THE APPEAL BEFORE TH E COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE, INTER ALIA; RAISED THE ISSUE THAT IN THE ABSENCE OF A NOTICE UNDER SECTION 143(2) OF THE ACT THE ORDER OF RE-ASSESSMENT WAS INVALID. THE CIT (A) NEGATIVED THE ABOVE CONTENTION HOLDING THAT NO SPECIFIC NOTICE WAS REQUIRED TO BE ISSUED UNDER SECTION 143(2) OF THE ACT AND THAT QUESTIONNAIRES DATED 11TH NOVEMBER, 2003 AND 2 1ST JANUARY, 2004 ISSUED BY THE AO HAD PROVIDED THE ASSESSEE'S SUFFICIENT OPPORTUNITY TO S UPPORT HIS RETURN BY DOCUMENTARY EVIDENCE. SECONDLY, IT WAS HELD THAT NON-ISSUE OF NOTICE UNDE R SECTION 143(2) DID NOT RENDER THE REASSESSMENT INVALID. THE NARRATION OF FACTS AS NOTED ABOVE BY THE COURT MAKES IT CLEAR THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE AFTER 16TH DECEMBER 2010, THE DATE ON WHICH THE ASSESSEE INFORMED THE AO THAT THE RETURN ORIGINALLY FILED SHOULD BE TREATED AS THE RETURN FILED PURSUANT TO THE NOTICE UNDER SECTION 148 OF THE ACT ~ 13 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 THE RESULTANT POSITION IS THAT AS FAR AS THE PRESEN T CASE IS CONCERNED THE FAILURE BY THE AO TO ISSUE A NOTICE TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT SUBSEQUENT TO 16TH DECEMBER 2010 WHEN THE ASSESSEE MADE A STATEMENT BEFORE THE AO TO THE EFFECT THAT THE ORIGINAL RETURN FILED SHOULD BE TREATED AS A RETURN PURSUANT TO A N OTICE UNDER SECTION 148 OF THE ACT, IS FATAL IN THE ORDER OF REASSESSMENT. IX) THE MADRAS HIGH COURT HELD IN SAPTHAGIRI FINANCE & INVESTMENTS V. ITO [2012] 25 TAXMAN.COM 341/210 TAXMAN 78 (MAD.) (MAG.). THE FAC TS OF THAT CASE WERE THAT A NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSE SSEE SEEKING TO REOPEN THE ASSESSMENT FOR AY 2000-01. HOWEVER, THE ASSESSEE DID NOT FILE A RETURN AND THEREFORE A NOTICE WAS ISSUED TO IT UNDER SECTION 142 (1) OF THE ACT PURSU ANT THERETO, THE ASSESSEE APPEARED BEFORE THE AO AND STATED THAT THE ORIGINAL RETURN FILED SH OULD BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT. THE HIG H COURT OBSERVED THAT IF THEREAFTER, THE AO FOUND THAT THERE WERE PROBLEMS WITH THE RETURN W HICH REQUIRED EXPLANATION BY THE ASSESSEE THEN THE AO OUGHT TO HAVE FOLLOWED UP WITH A NOTICE UNDER SECTION 143(2) OF THE ACT. IT WAS OBSERVED THAT: 'MERELY BECAUSE THE MATTER WAS DISCUSSED WITH THE A SSESSEE AND THE SIGNATURE IS AFFIXED IT DOES NOT MEAN THE REST OF THE PROCEDURE OF NOTICE U NDER SECTION 143(2) OF THE ACT WAS COMPLIED WITH OR THAT ON PLACING THE OBJECTION THE ASSESSEE HAD WAIVED THE NOTICE FOR FURTHER PROCESSING OF THE REASSESSMENT PROCEEDINGS. THE FAC T THAT ON THE NOTICE ISSUED U/S 143(2) OF THE ACT, THE ASSESSEE HAD PLACED ITS OBJECTION AND REITERATED ITS EARLIER RETURN FILED AS ONE FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT AND THE OFFICER HAD ALSO NOTED THAT THE SAME WOULD BE CONSIDERED FOR COMPLETING OF ASSESSMENT, W OULD SHOW THAT THE AO HAS THE DUTY OF ISSUING THE NOTICE UNDER SECTION 143(3) TO LEAD ON TO THE PASSING OF THE ASSESSMENT. IN THE CIRCUMSTANCES, WITH NO NOTICE ISSUED U/S 143(2) AND THERE BEING NO WAIVER, THERE IS NO JUSTIFIABLE GROUND TO ACCEPT THE VIEW OF THE TRIBUN AL THAT THERE WAS A WAIVER OF RIGHT OF NOTICE TO BE ISSUED U/S 143(2) OF THE ACT. 11. TAKING INTO CONSIDERATION THE RATIO DECIDENDI L AID BY THE HONBLE SUPREME COURT IN HOTEL BLUE MOON (SUPRA); THE HONBLE JURISDICTIONAL HIGH COURT AND VARIOUS OTHER HONBLE HIGH COURTS THAT NON-ISSUE OF NOTICE U/S. 143(2) V ITIATES THE VERY USURPATION OF JURISDICTION TO FRAME ASSESSMENT ORDER U/S. 143(3) OF THE ACT, T HE LD. CIT(A) TAKING NOTE OF THE FACT THAT AO HAS NOT ISSUED NOTICE U/S. 143(2) OF THE ACT DES PITE ASSESSEE FILING THE RETURN OF INCOME DATED 20.11.2017 HAS FOUND THE USURPATION OF JURISD ICTION BY AO TO BE BAD IN LAW AND CONSEQUENTLY QUASHED THE SAME AFTER TAKING NOTE OF THE REMAND REPORT FILED BY THE AO WHICH IS REPRODUCED FOR EASY REFERENCE. THE LD. CIT(A) OB SERVES THAT THE AO VIDE HIS LETTER DATED 14 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 25.05.2018 HAS DULY FORWARDED THE REMAND REPORT TH ROUGH RANGE HEAD VIDE HIS LETTER DATED 29.05.2018 WHEREIN THE AO HAS SUBMITTED THE REMAND REPORT WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) AT PAGE 11 OF THE IMPUGNED ORDER AS UNDER:- IN COMPLIANCE TO YOUR ORDER OF REQUISITION DATED 0 6.04.2018 OF REMAND REPORT AT THE GROUND 'WHETHER THE NOTICE U/S 143(2) WAS ISSUED BEFORE TH E COMPLETION OF THE ORDER.' THE ASSESSMENT WAS COMPLETED U/S 143(3)/154/147/144 ON 22.12.2017 . ON THE PROCESS OF SUCH ASSESSMENT THE NOTICES, REFIXATION AND SUFFICIENT O PPORTUNITIES WERE GIVEN. DATE OF ISSUE OF NOTICE DATE OF HEARING FIXATION RE MARKS U/S. 148 31.3.2017 WITHIN 30 DAYS THE RETURN WAS REQUIRED TO FILE. BUT THE ASSESSEE NOT FILED THE RETURN IN RESPONSE TO THE SAID NOTICE. U/S. 142(1) 29.06.2017 12.07.2017 NOT ATTENDED REFIXATION LETTER DATED 06.09.2017 22.09.2017 NOT ATTENDED SHOW CAUSE LETTER DATED 03.11.2017 08.11.2017 NOT ATTENDED EVEN NOT FILED ANY WRITTEN COMPLIANCE. THIS IS FOR YOUR KIND INFORMATION THAT THE ASSESSE E NOT FILED ANY LETTER OF FILING RETURN WITH THE COPY OF THE RETURN. (WITH THE ENCLOSURES OF YOUR REMAND LETTER, IT IS FOUND THAT THE ASSESSEE FILED THE RETURN ON 20.11.2017. AS NO COMPLIANCE WAS MADE EVEN SEVERAL OPPORTUNITIE S WERE GIVEN TO THE ASSESSEE AND NO DOCUMENTARY EVIDENCE WAS FOUND IN RECORD FOR FILING OF RETURN , WHICH ASSESSEE WAS REQUIRED TO SUBMIT WITHIN 30 D AYS OF SERVICE OF THE NOTICE U/S 148, OMITTING TO FILE BEF ORE THE AO AT THE TIME OF ASSESSMENT, THE NOTICE U/ S 143(2) WAS NOT ISSUED. ACCORDINGLY, ON THE BASIS OF DOCUME NTS AVAILABLE ON RECORD THE ASSESSMENT WAS COMPLETE D AT THE END OF DE CEMBER 2017. . AFTER RECEIVING THE ORDER U/S 143(3)/154/147/144 ON 22.12.2017 THE COPY OF RETURN FILED BEFORE YOU WHI CH SHOWS THE MALAFIED INTENTION OF THE ASSESSEE RAISIN G SUCH QUESTION. IT IS PERTINENT TO MENTION THAT ACKNOWLEDGEMENT OF-RETURN FILED BEFORE ORIGINAL ASS ESSMENT U/S 143(3) WAS SUBMITTED AT THE TIME OF ASSESSMENT U/S 147 ON 21.09.2017 WHICH THE ACKNOWLE DGEMENT FOR THE YEAR 2010-11 ON 03.09.2011 BUT THE ASSESSEE DID NOT GIVEN EVIDENCE OF FILING RETURN U/ S 148.{EMHASIS GIVEN BY US} 12. SO FROM READING OF THE AFORESAID REMAND REPORT OF AO, THE FOLLOWING FACTS ARE DISCERNED (I) THAT AO ISSUED 148 NOTICE ON 31.03. 2017, (II) THE TIME GIVEN TO ASSESSEE TO FILE RETURN OF INCOME WAS THIRTY DAYS, (III) ACKNOW LEDGMENT OF RETURN FILED BEFORE ORIGINAL ASSESSMENT U/S. 143(3) OF THE ACT WAS SUBMITTED AT THE TIME OF ASSESSMENT U/S. 147 ON 21.09.2017 WHICH THE ACKNOWLEDGMENT FOR THE YEAR 20 10-11 ON 03.09.20-11, (IV) COPY OF RETURN WAS FILED BEFORE AO ON 20.11.2017. HOWEVER, THE AO FINDS FAULT WITH THE ASSESSEES ACTION OF NOT FILING ANY LETTER WHILE FILING THE CO PY OF RETURN. AND THE MAIN REASON THE AO STATES REGARDING NON-ISSUE OF NOTICE U/S. 143(2) OF THE ACT WAS THE OMISSION ON THE PART OF 15 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 THE ASSESSEE TO FILE RETURN OF INCOME WITHIN THIRTY DAYS AFTER ISSUE OF NOTICE U/S. 148 OF THE ACT. FOR THAT THE AO STATES THAT AS NO COMPLIANCE WAS MADE EVEN SEVERAL OPPORTUNITIE S WERE GIVEN TO THE ASSESSEE AND NO DOCUMENTARY EVIDE NCE WAS FOUND IN RECORD FOR FILING OF RETURN, WHICH ASSESSEE WAS REQUIRED TO SUBMIT WITHI N 30 DAYS OF SERVICE OF THE NOTICE U/S 148, OMITTING TO FILE BEFORE THE AO AT THE TIME OF ASSESSMENT, THE NOTICE U/S 143(2) WAS NOT ISSUED . ACCORDINGLY, ON THE BASIS OF DOCUMENTS AVAILABLE ON RECORD THE ASSESSMENT WAS COMPLETED AT THE END OF DECEMBER 2017 . THUS, WE NOTE THAT THE MAIN REASON FOR NON-ISSU E OF NOTICE U/S. 143(2) WAS THAT THE ASSESSEE DID NOT FILE RETURN WITHIN THIRTY DAYS OF ISSUE OF 148 NOTICE. 13. AS WE HAVE NOTED EARLIER, THIS ASSESSEE HAD FIL ED ORIGINAL RETURN OF INCOME U/S 139(1) OF THE ACT ON 15.09.2010 WHICH WAS PICKED UP FOR SC RUTINY AND ORIGINAL ASSESSMENT U/S. 143(3) WAS FRAMED ON 22.03.2013. THEREAFTER, FOR T HE FIRST TIME THE ASSESSMENT OF ASSESSEE WAS REOPENED AND THE FIRST REASSESSMENT ORDER WAS P ASSED ON 30.10.2014 U/S. 143(3) R.W.S. 147 OF THE ACT. THEREAFTER, FOR THE SECOND TIME, R EOPENING NOTICE WAS ISSUED U/S. 148 ALLEGEDLY ON 31.03.2017 VIA E-MAIL; AND FROM A PERU SAL OF THE REMAND REPORT (SUPRA) IT IS UNDERSTOOD THAT THE ASSESSEE HAD RESPONDED BY A LET TER FIRSTLY TO AO ON 21.09.2017 WHICH FACT THE AO IN HIS REMAND REPORT, STATES IN HIS OWN WORDS IT IS PERTINENT TO MENTION THAT ACKNOWLEDGEMENT OF-RETURN FILED BEFORE ORIGINAL ASS ESSMENT U/S 143(3) WAS SUBMITTED AT THE TIME OF ASSESSMENT U/S 147 ON 21.09.2017 WHICH THE ACKNOWLEDGEMENT FOR THE YEAR 2010-11 ON 03.09.2011. THEREAFTER, WE NOTE FROM THE REMAND REPORT THAT AO HAD ISSUED SHOW CAUSE NOTICE DATED 03.11.2017, WHEREIN WE NOTE THAT HE HAS NOT REJECTED THE RETURN OF INCOME AS REITERATED BY ASSESSEE IN THE LETTER DATED 21.09 .2017. THEREAFTER BEFORE THE AO, THE ASSESSEE FILED A COPY OF THE RETURN ORIGINALLY FILE D DATED 15.09.2010 ON 21.11.2017 [SEE REMAND REPORT OF AO, SUPRA.] WE NOTE THAT THE AO HAS NOT BOTHERED TO REJECT THE LETTER DATED 21.09.2017 OF ASSESSEE IN WHICH THE ASSESSEE REITERATED THE RETURN OF INCOME PURSUANT TO NOTICE U/S. 148 OF THE ACT OR EVEN THE COPY OF R ETURN OF INCOME FILED ON 20.11.2017. THEREAFTER, THE AO HAD FRAMED THE RE-ASSESSMENT ORD ER U/S. 143(3)/154/147/144 ON 22.12.2017 WITHOUT REJECTING THE RETURN OF INCOME F ILED PURSUANT TO THE NOTICE U/S. 148 OF 16 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 THE ACT, AND WITHOUT ISSUING NOTICE U/S. 143(2) OF THE ACT, WHICH ACTION OF AO ACCORDING TO ASSESSEE AND LD. CIT(A). VITIATES THE VERY USURPAT ION OF JURISDICTION BY THE AO. IT HAS TO BE UNDERSTOOD THAT AS PER THE SCHEME OF THE ACT, THE A O AFTER GIVING NOTICE U/S. 148 AND RECEIVES THE RETURN OF INCOME IS SATISFIED WITH THE INCOME RETURNED BY THE ASSESSEE CAN ACCEPT THE RETURN OF INCOME AND DROP THE PROCEEDING S. IF HE DOES NOT ACCEPT THE RETURN OF INCOME FILED PURSUANT TO NOTICE U/S. 148, THEN HE IS DUTY BOUND TO REJECT IT AND THEN ISSUE NOTICE U/S. 143(2) OF THE ACT AND THEREAFTER USURP JURISDICTION TO FRAME ASSESSMENT/REASSESSMENT ORDER U/S. 143(3)/144 OF TH E ACT. SECTION 144 THAT IS THE BEST JUDGMENT ASSESSMENT CAN BE RESORTED TO ONLY IF THER E IS FAILURE AS STIPULATED U/S. 144 OF THE ACT AND NOT OTHERWISE. FOR BETTER UNDERSTANDING TH IS LEGAL ASPECT LET US HAVE A LOOK AT SECTION 144 OF THE ACT. 144. BEST JUDGMENT ASSESSMENT (1) 1 ] IF ANY PERSON- (A) FAILS TO MAKE THE RETURN REQUIRED 2 UNDER SUB- SECTION (1) OF SECTION 139] AND HAS NOT MADE A RETURN OR A REVISED RETURN UNDER SUBSECTION (4) OR SUB- SECTION (5) OF THAT SECTION,] OR (B) FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISS UED UNDER SUBSECTION (1) OF SECTION 142 3 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB- SECTIO N (2A) OF THAT SECTION], OR (C) HAVING MADE A RETURN, FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB- SECTION (2) OF SECTION 143, THE 4 ASSESSING] OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH THE 5 ASSESSING] OFFICER HAS GATHERED, 6 SHALL, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, MAKE THE ASSESSMENT] OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE SUM PAYABLE BY THE ASSESSEE 7 ] ON THE BASIS OF SUCH ASSESSMENT: 8 PROVIDED THAT SUCH OPPORTUNITY SHALL BE GIVEN BY THE ASSESSING OFFICER BY SERVING A NOTICE CALLING UPON THE ASSESSEE TO SHOW CAUSE, ON A DATE AND TIME TO BE SPECIFIED IN T HE NOTICE, WHY THE ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF HIS JUDGMENT: PROVIDED FUR THER THAT IT SHALL NOT BE NECESSARY TO GIVE SUCH OPPORTUNITY IN A CASE WHERE A NOTICE UNDER SUB- SEC TION (1) OF SECTION 142 HAS BEEN ISSUED PRIOR TO THE MAKING OF AN ASSESSMENT UNDER THIS SECTION.] (2) 9 THE PROVISIONS OF THIS SECTION AS THEY STOOD IMMED IATELY BEFORE THEIR AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 (4 OF 1988 ), SHALL APPLY TO AND IN RELATION TO ANY ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL, 1988 , OR ANY EARLIER ASSESSMENT YEAR AND REFERENCES IN THIS SECTION TO THE OTHER PROVISIONS OF THIS ACT SHALL BE CONSTRUED AS REFERENCES TO THOSE PROVISIONS AS FOR THE TIME BEING IN FORCE AND APPLICABLE TO THE RELEVANT ASSESSMENT YEAR.] 14. FROM A READING OF THE AFORESAID PROVISION IT IS UNDER STOOD THAT CLAUSE (A) AND (B) OF SUB-SECTION (1) OF SECTION 144 IS NOT APPLICABLE TO THE F ACTS OF THE CASE AS DISCUSSED AFTER GOING THROUGH THE REMAND REPORT OF THE AO. SO COMI NG TO CLAUSE (C), WE NOTE THAT IF THE ASSESSEE HAS FILED THE RETURN, AND THEREAFTER ASSES SEE FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB-SECTION (2) OF SECTION 143, THEN AO CAN RESORT TO BEST JUDGMENT 17 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 ASSESSMENT. HERE IN THIS CASE THE ASSESSEE HAD FIL ED RETURN OF INCOME BEFORE THE AO ON 21.09.2017 AND 20.11.2017, THEREFORE, AS PER CLAUSE (C) THE AO WAS DUTY BOUND TO GIVE THE MANDATORY NOTICE U/S. 143(2) AND IN CASE IF THE ASS ESSEE FAILED TO COMPLY WITH ALL THE TERMS OF THE NOTICE ISSUED U/S. 143(2) THEN ONLY HE COULD HAVE RESORTED TO BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT. 15. COMING TO THE MAIN REASON GIVEN BY THE AO FOR N ON-ISSUE OF NOTICE U/S. 143(2) IS THAT THE ASSESSEE DID NOT FILE RETURN WITHIN THIRTY DAYS. IN ORDER TO APPRECIATE THIS ARGUMENT, WE NEED TO HAVE A LOOK AT SECTION 148 OF THE ACT WH ICH IS REPRODUCED AS UNDER: SECTION 148(1) IN THE INCOME- TAX ACT, 1995 (1) 3 ] BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RE COMPUTATION UNDER SECTION 147, THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOT ICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, NOT BEING LESS THAN THIRTY DAYS, AS MAY BE SPECIFIE D IN THE NOTICE, A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE I S ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PART ICULARS AS MAY BE PRESCRIBED; AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDIN GLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139.] 16. FROM A READING OF THE AFORESAID PROVISION IT IS UNDERSTOOD THAT BEFORE MAKING REASSESSMENT U/S. 147 OF THE ACT, THE AO SHALL SERV E ON THE ASSESSEE NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE A RETURN OF INCOME. AND ONCE THE RETURN IS FILED PURSUANT TO SECTION 148 NOTICE, THE PROVISIONS OF THIS ACT SHALL SO FAR AS MAY BE APPLY AS IF SUCH RETURN WERE A RETURN REQUIR ED TO BE FURNISHED U/S. 139 OF THE ACT. THUS, WE NOTE THAT WHEN THE ASSESSEE RECEIVES A NOT ICE U/S. 148, HE IS REQUIRED TO FILE A RETURN OF INCOME WITHIN THE TIME SPECIFIED BY THE AO IN TH AT NOTICE; AND ONCE THE ASSESSEE FILES THE RETURN OF INCOME PURSUANT TO NOTICE U/S. 148, THE R ETURN WILL BE TREATED AS A RETURN U/S. 139 AND THE PROVISION OF SECTION 139 SO FAR AS MAY BE A PPLICABLE WOULD APPLY. SINCE SECTION 139(1) TO (3) DOES NOT APPLY TO THE FACTS OF THE CA SE, WE REPRODUCE SUB-SECTION (4) OF SEC. 139 WHICH READS AS UNDER: 139(4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDR SUB- SECTION (1), OR WITHIN THE TIME ALLOWED UNDER A NOT ICE ISSUED UNDER SUB-SECTION (1) OR SECTION 142, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR A T ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEF ORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. 18 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 17. FROM A READING OF THE AFORESAID PROVISION IT IS UNDERSTOOD THAT IF THE ASSESSEE DID NOT FURNISH THE RETURN WITHIN THE TIME (IN THIS CASE AS SPECIFIED BY AO IN THE NOTICE U/S. 148) THEN THE ASSESSEE IS ALLOWED TO FILE THE RETURN BEF ORE THE COMPLETION OF THE ASSESSMENT. THAT MEANS IN THE PRESENT CASE THOUGH THE ASSESSEE DID N OT FILE THE RETURN OF INCOME WITHIN THE SPECIFIED TIME GIVEN BY AO, THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 21.09.2017 AND ON 20.11.2017 BEFORE THE REASSESSMENT WAS FRAMED ON 22.12.2017. SO, ON A CON-JOINT READING OF SECTION 148(1) WITH SEC. 139(4) AND SECT ION 144 MAKES IT ABUNDANTLY CLEAR THAT PURSUANT TO A NOTICE U/S. 148 OF THE ACT, IF AN ASS ESSEE FILES BELATEDLY A RETURN OR A LETTER REITERATING HIS EARLIER RETURN THEN THE AO IS BOUND TO ISSUE NOTICE U/S. 143(2) OF THE ACT, IF HE HAS TO FRAME RE-ASSESSMENT ORDER U/S 143(3)/144 OF THE ACT. THEREFORE, THE CONTENTION RAISED BY THE LD. CIT, DR AND REASONING GIVEN BY AO CANNOT BE COUNTENANCED. SINCE, IT IS NOT THE CASE OF THE AO/LD. CIT, DR, THAT ASSESSEE HAS NOT F ILED RETURN OF INCOME PURSUANT TO NOTICE U/S. 148 OF THE ACT, AND WHEN THE FACT WAS THAT ASS ESSEE HAD FILED RETURN OF INCOME, THE AO IN ORDER TO SUCCESSFULLY USURP THE JURISDICTION TO FRAME ASSESSMENT HAD TO ISSUE NOTICE U/S. 143(2) WHICH WAS A JURISDICTIONAL NOTICE AND MANDAT ORY FOR FRAMING OF ASSESSMENT ORDER U/S. 143(3) OR U/S. 144 OF THE ACT AS DISCUSSED. WE FIND THAT THE LD. CIT(A) HAS RIGHTLY TAKEN NOTE OF THE JUDICIAL PRECEDENTS ESPECIALLY THAT OF HONBLE SUPREME COURT IN HOTEL BLUE MOON (SUPRA) AS WELL AS THE ORDER OF HONBLE DELHI HIGH COURT IN SIMILAR CASE IN SHRIJAI SHIV SHANKAR TRADERS (P.) LTD. (SUPRA) TO DECIDE TH E LEGAL ISSUE WHICH WE ENDORSE. 18. BEFORE WE PART WE WOULD LIKE TO TAKE NOTE OF TH E ORDER OF THE HONBLE J&K HIGH COURT IN THE CASE OF PR. CIT VS. BROADWAY SHOE CO. (SUPRA) WHICH HAS BEEN HEAVILY RELIED UPON BY THE LD. CIT, DR. WE NOTE THAT IN THAT CASE FOR AY 2005-06, THE ASSESSEE HAD FILED ITS RETURN FOR THAT YEAR BELATEDLY ONLY ON 13.02.20 18 AND THEREAFTER, ONCE THE NOTICE U/S. 148 OF THE ACT WAS ISSUED DIRECTING THE ASSESSEE TO FIL E RETURN OF INCOME WITHIN THIRTY DAYS FROM THE DATE OF SERVICE OF THE NOTICE THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME THOUGH SEVERAL NOTICES WERE SENT TO THE ASSESSEE FROM DECE MBER, 2012 TO FEBRUARY, 2013. THEREFORE, THE AO IN THAT CASE FIRSTLY ISSUED THE D RAFT ASSESSMENT ORDER DATED 11.03.2013 AND 19 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 THEREAFTER, FRAMED THE ASSESSMENT ON WHICH FACTS T HE HONBLE HIGH COURT HELD THAT THE ACTION OF THE AO NEED TO BE UPHELD. IN THIS FACTUA L BACKDROP, THE HONBLE HIGH COURT HAS HELD THAT FURNISHING OF RETURN BY AN ASSESSEE IS S INE QUA NON FOR THE ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT. HOWEVER, THE FACTS IN THIS CASE IS DISTINGUISHABLE TO THE CASE IN HAND FOR THE SIMPLE REASON THAT THE ASSESSEE HAD FILED THE R ETURN OF INCOME FOR THE AY 2010-11 U/S. 139(1) OF THE ACT ON 15.09.2010 WITHIN THE PRESCRIB ED TIME AND NOT BELATEDLY AS IN THE OTHER CASE. THE ASSESSEES CASE IN HAND, THE SCRUTINY AS SESSMENT U/S. 143(3) WAS PASSED ON 22.03.2013 THEREAFTER REASSESSMENT ORDER WAS PASSED ON 30.10.2014 AND THEREAFTER, THE IMPUGNED SECOND RE-ASSESSMENT ORDER WAS PASSED ON 2 2.12.2017. IN THIS CASE, IN THE REMAND REPORT THE AO HAS ACKNOWLEDGED THAT THE ASSE SSEE HAD FILED THE RETURN OF INCOME ON 20.11.2017 AND ALSO HAD STATED IN THE REMAND REPORT IT IS PERTINENT TO MENTION THAT ACKNOWLEDGMENT OF RETURN FILED BEFORE ORIGINAL ASSE SSMENT U/S. 143(3) WAS SUBMITTED AT THE TIME OF ASSESSMENT U/S. 147 ON 21.09.2017 WHICH THE ACKNOWLEDGMENT FOR THE YEAR 2010-11 ON 03.09.2011... IN SUCH A SCENARIO, IN THIS CASE, THE ASSESSEE HA D FILED THE RETURN OF INCOME BEFORE THE REASSESSMENT ORDER WAS PASSED ON 22.12.2017 AND, THEREFORE, THIS CASE LAW IS NOT APPLICABLE IN THIS CASE. AND THE OTHER CASE LAW OF THE TRIBUNAL IS ALSO DISTINGUISHABLE AND IN THE LIGHT OF THE APEX COURT DECISION, HONBLE JURISDICTIONAL HIGH COURTS ORDER AND OTHER HONBLE HIGH COURTS ORDER. THEREFORE FOR THE REASONS DISCUSSED AFTER TAKING NOTE OF THE FACTS AND LAW AS DISCUSSED AS WELL AS KEEPING IN MIND THE RATIO- DECIDENDI OF JUDICIAL PRECEDENCE CITED SUPRA, WE AR E INCLINED TO UPHOLD THE ACTION OF THE LD. CIT(A) AND DISMISS THE REVENUE APPEAL. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 9TH AUGUS T, 2019. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9TH AUGUST, 2019 JD.(SR.P.S.) 20 ITA NO. 1901/KOL/2018 PINNACLE COMMODITIES PVT. LTD. , AY- 2010-11 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-6(1), KOLKATA. 2 RESPONDENT PINNACLE COMMODITIES PVT. LTD., 56E, HEMANTA BASU SARANI, 1 ST FLOOR, ROOM NO. 2, STEPHEN HOUSE, KOLKATA-700 001. 3. 4. CIT(A)-2, KOLKATA (SENT THROUGH E-MAIL) CIT-, , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR