Mallika Investment Co. Private Limited, Kolkata V. ITO, Ward - 4(2), Kolkata, Kolkata

ITA 1911/KOL/2010

• Counselvise Citation: 191123514 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 04-08-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 11-10-2010
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: SOMNATH GHOSH
• Keywords: Procedural lapse
• Section: 139; 143(3); 142(1)

Judgement Text

1 , B , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- B, KOL KATA [ , . .. . ! ! ! !. .. . , , , , '# ] BEFORE SRI N.VIJAYAKUMARAN, JUDICIAL MEMBER & SRI C.D. RAO, AC COUNTANT MEMBER $ $ $ $ / ITA NO. 1911 (KOL) OF 2010 %& '( / ASSESSMENT YEAR 2000-01 MALLIKA INVESTMENT CO. PVT.LTD. KOLKATA. (PAN-AABCM7336B) INCOME-TAX OFFICER, WARD-4(2), KOLKATA. (+, / APPELLANT ) - - - VERSUS - (/0+,/ RESPONDENT ) +, 1 2 '/ FOR THE APPELLANT: / SRI SOMNATH GHOSH /0+, 1 2 ' / FOR THE RESPONDENT: / SRI S.K. ROY 3 1 !# / DATE OF HEARING : 08/12/2011 4' 1 !# / DATE OF PRONOUNCEMENT : 09/12/2011 '5 / ORDER ( ), (N. VIJAYAKUMARAN), JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. C.I.T.(A)-IV, KOLKATA DATED 23/08/2010. THE ASSESSMENT YEAR INVOL VED IS 2000-01. THE ASSESSEE HAS RAISED SEVERAL GROUNDS WHICH ARE IN RESPECT OF VALI DITY OF NOTICE U/S. 148 OF THE ACT AND PASSING CONSEQUENTIAL ASSESSMENT ORDER U/S. 143(3)/ 147 OF THE ACT AND ALSO IN RESPECT SEVERAL OTHER DISALLOWANCES/ADDITIONS MADE ON MERIT AND UPHELD BY THE LD. C.I.T.(A). 2. THE FACTS RELEVANT ARE THAT THE ASSESSEE IS A C OMPANY CARRYING ON A BUSINESS OF LETTING OUT ITS LEASEHOLD PROPERTIES AS WELL AS EAR NING INCOME FROM INVESTMENTS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, RETURN OF INCO ME WAS FILED ON 30/11/2000 SHOWING LOSS. THE LD. A.O. ISSUED NOTICE U/S. 148 OF THE A CT DATED 11/4/2002. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE INTIMATED THE LD. A.O. ON 20/5/2002 TO TREAT THE ORIGINAL RETURN AS RETURN FILED IN COMPLIANCE TO NOTICE U/S. 148 OF THE ACT. AS ALLEGED BY THE LD. A.O. IN THE ASSESSMENT ORDER, IN RESPONSE TO NOTICE S U/S. 143(2) AND 142(1) OF THE ACT MR. D.K. SAHA, FCA, APPEARED FROM TIME TO TIME AND FILED REQUISITE DETAILS. FINALLY, THE 2 ASSESSMENT U/S. 147/143(3) OF THE ACT WAS FRAMED ON THE POSITIVE INCOME OF RS. 98,59,840/- INSTEAD OF LOSS AS SHOWN BY THE ASSESSE E. 3. ON APPEAL TO THE LD. C.I.T.(A), IT WAS URGED BE FORE HIM THAT NO NOTICE U/S. 143(2) WAS EVER ISSUED. HENCE THE IMPUGNED ASSESSMENT IS AB INITIO VOID. WHILE ADJUDICATING ON THE ISSUE, THE LD. C.I.T.(A) FOUND THAT AS OBSERVED BY THE LD. A.O. THE ASSESSEE HAS COMPLIED WITH THE NOTICE U/S. 143(2) OF THE ACT WIT HOUT ANY PROTEST AND, THEREFORE, THE ASSESSEE CANNOT AGITATE THE ISSUE AGAIN. WITH THIS FINDING, THE LD. C.I.T.(A) REJECTED THE OBJECTION RAISED BY THE ASSESSEE IN THIS REGARD AND UPHELD THE VALIDITY OF THE NOTICE U/S. 148 OF THE ACT. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE AGITATED THE ACTION OF THE LD. C.I.T.(A) IN GROUNDS NO. 1 & 2, WHICH RUN AS FOLLOW S :- 1. FOR THAT THE LD. COMMISSIONER OF INC OME TAX (APPEALS) IV, KOLKATA ACTED UNLAWFULLY IN UPHOLDING THE VALIDITY OF NOTICE ISSU ED U/S. 148 OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THAT NONE OF THE CON DITIONS PRECEDENT FOR THE ASSUMPTION OF JURISDICTION U/S. 147 OF THE INCOME T AX ACT, 1961 EXISTED AND/OR HAS BEEN COMPLIED WITH AND/OR FULFILLED ON T HE PART OF THE LD. INCOME TAX OFFICER, WARD 4(2), KOLKATA AND THE IMPUGNED OR DER PASSED U/S. 147/143(3) OF THE INCOME TAX ACT, 1961 IN PURSUANCE TO SUCH NOTICE IS AB INITIO VOID, ULTRA VIRES AND NULL IN LAW. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IV, KOLKATA ERRED IN UPHOLDING THE VALIDITY OF THE RE-ASSESSMENT ORDER P ASSED U/S. 147/143(3) OF THE INCOME TAX ACT, 1961 BY THE LD. INCOME TAX OFFI CER, WARD 4(2), KOLKATA WITHOUT SERVING THE APPELLANT WITH A NOTICE U/S. 14 3(2) OF THE ACT WHICH IS MANDATORILY REQUIRED UNDER THE STATUTE AND SUCH BLA TANT VIOLATION OF THE STATUTE RENDERS THE ORDER PASSED WITHOUT JURISDICTI ON AND NULL IN LAW. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND ADVANCED HIS ARGUMENTS IN SUPPORT OF THE FINDINGS OF THE LD. C.I.T.(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PAPER BOOK SUBMITTED BY THE AS SESSEE. THE LD. C.I.T.(A) OBSERVED THAT PROVISIONS OF SEC. 292BB OF THE ACT ARE VERY C LEAR THAT NOTICE HAS TO BE OBJECTED BEFORE COMPLETION OF ASSESSMENT OR REASSESSMENT BEF ORE THE LD. A.O. AS IN THIS CASE THE 3 ASSESSEE HAS NOT PROTESTED BEFORE THE LD. A.O., THE ASSESSEE CANNOT BE SAID TO BE AGGRIEVED. WHILE HOLDING SO, THE LD. C.I.T.(A) APP LIED THE RATIO OF DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SA RLA KUMAR & ORS. [171 ITR 14 )MP)], WHEREIN THE HONBLE HIGH COURT HAS HELD THAT WHEN T HE ASSESSEE ATTENDED WITH REFERENCE TO NOTICE AND EXPLAIN THE RETURN CANNOT CHALLENGE T HE ASSESSMENT IN LATER PART. IN THIS CONTEXT, THE LEARNED COUNSEL PLACED HEAVY RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON [(201 0) 321 ITR 362 (SC)], WHEREIN IT HAS BEEN HELD THAT NON-ISSUANCE OF NOTICE U/S. 143(2) O F THE ACT CANNOT BE A MERE PROCEDURAL IRREGULARITY AND HENCE THE SAME IS NOT CURABLE. TH EREFORE, IN VIEW OF THE AFORESAID DECISION OF HONBLE SUPREME COURT, ACCORDING TO THE LEARNED COUNSEL, THE OMISSION ON THE PART OF THE LD. A.O. TO ISSUE NOTICE U/S. 143(2) WI LL MAKE THE ASSESSMENT AB INITIO VOID. ONCE THE ASSESSMENT IS AB INITIO VOID, THE APPEAL O F THE ASSESSEE IS TO BE ALLOWED ON THIS TECHNICAL GROUND. 6.1. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE DEPARTMENT FAILED TO PRODUCE EVIDENCE TO THE SATISFACTION OF T HE TRIBUNAL THAT THERE WAS A VALID NOTICE ISSUED U/S. 143(2) OF THE ACT AND THAT MANDA TORY CONDITION HAS BEEN COMPLIED WITH BEFORE COMPLETING THE REASSESSMENT U/S. 147 READ WI TH SEC. 143(3) OF THE ACT. THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT RELIE D ON BY THE LD. DEPARTMENTAL REPRESENTATIVE IN THE CASE OF CIT VS. SARLA KUMAR & ORS, CITED SUPRA, WILL NOT HELP THE DEPARTMENT TO TAKE SHELTER UNDER THE PROVISIONS OF SEC. 292BB OF THE ACT IN VIEW OF THE RECENT DECISION OF HONBLE SUPREME COURT IN THE CAS E OF ACIT VS. HOTEL BLUE MOON (SUPRA), WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U/S. 143(2) OF THE ACT CANNOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEIR LORDSHIPS F URTHER OBSERVED THAT, THEREFORE, THE REQUIREMENT OF NOTICE U/S. 143(2) OF THE ACT CANNOT BE DISPENSED WITH. THE RATIO OF THE DECISION OF HONBLE SUPREME COURT CLEARLY SUPPORTS THE GROUNDS RAISED BY THE ASSESSEE BEFORE US. 6.2. THE LEARNED COUNSEL FURTHER RELIED ON THE DEC ISION OF I.T.A.T., KOLKATA BENCH C, ORDER DATED 25/5/2011 FOR ASSESSMENT YEAR 2003-04 I N THE CASE OF SMT. KAMALA SAHA VS. 4 JCIT, A COPY OF WHICH IS FILED BEFORE US, WHICH IN OUR OPINION SUPPORTS THE CASE OF THE ASSESSEE. FURTHER, THE DECISION OF HONBLE APEX CO URT IN THE CASE OF R. DALMIA VS. CIT [(1999) 236 ITR 480 (SC)] IS ALSO APPLICABLE TO THE FACTS OF THE ASSESSEES CASE, WHEREIN THE HONBLE APEX COURT HAS LAID DOWN THE RATIO THAT THE ASSESSMENTS U/S. 143(3) AND RE- ASSESSMENTS U/S. 147 OF THE ACT ARE DIFFERENT, BUT IN MAKING ASSESSMENTS AND RE- ASSESSMENTS U/S. 147, THE PROCEDURE LAID DOWN IN SE CTIONS SUBSEQUENT TO SECTION 139 OF THE ACT INCLUDING THAT LAID DOWN BY SEC. 144B OF TH E ACT HAS TO BE FOLLOWED. THE OBSERVATION IS AVAILABLE AT PAGE-488 OF THE SAID CI TATION. HENCE, ACCORDING TO THE RATIO OF THE DECISION OF HONBLE APEX COURT, FOR MAKING A RE-ASSESSMENT U/S. 147 OF THE ACT ALL THE SECTIONS STARTING FROM SEC. 139 INCLUDING THAT LAID DOWN BY SEC. 144B OF THE ACT ARE TO BE FOLLOWED, MEANING THEREBY THE NOTICE U/S. 143 (2) SHOULD ALSO BE FOLLOWED. AS HELD BY THE HONBLE SUPREME COURT THAT OMISSION OR NON-I SSUANCE OF NOTICE U/S. 143(2) OF THE ACT BEFORE COMPLETING THE REASSESSMENT IS NOT A PRO CEDURAL IRREGULARITY AND HENCE IS NOT CURABLE, WE ARE OF THE VIEW THAT IN ABSENCE OF PROO F THAT NOTICE U/S. 143(2) OF THE ACT WAS NOT PROTESTED BY THE ASSESSEE, THE OBJECTION RA ISED BY THE ASSESSEES LEARNED COUNSEL IS ACCEPTABLE THAT THE REASSESSMENT FRAMED U/S. 147 READ WITH SEC. 143(3) OF THE ACT WITHOUT COMPLIANCE OF NOTICE AS ENVISAGED U/S. 143(2) OF THE ACT CANNOT BE TAKEN AS A PROCEDURAL IRREGULARITY AND IT CANNOT BE CURED. HE NCE THE REASSESSMENT BECOMES VOID AB INITIO. 7. AS THE ASSESSMENT ITSELF IS HELD AS AB INITIO V OID, THE OTHER GROUNDS ON MERIT BEING NOS. 3 TO 7 OF THE GROUNDS OF APPEAL BECOME ACADEMI C AND HENCE REQUIRE NO ADJUDICATION. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED . 6 '5 #' 7 8 69 THIS ORDER IS PRONOUNCED IN THE COURT ON 9.12.2011 SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( ) (C.D. RAO), ACCOUNTANT MEMBER (N.VIJAYAKUMARAN) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 9-12-2011 5 $ $ $ $ / ITA NO. 1911 (KOL) OF 2010 '5 1 /%% :'';- COPY OF THE ORDER FORWARDED TO: 1. +, / THE APPELLANT : MALLIKA INVESTMENT CO. PVT. LTD., 10, OLD POST O FFICE STREET, ROOM NO.113, TOP FLOOR, KOLKATA-700 001. 2 . /0+, / THE RESPONDENT : I.T.O., WARD-4(2), KOLKATA. 3. %5 () : THE CIT(A)-IV, KOLKATA. 4 . %5 / THE C.I.T., KOL , KOLKATA. 5. >%8 /% / DR, ITAT, KOLKATA BENCHES, KOLKATA 6. GUARD FILE . 0 /%/ TRUE COPY, '5/ BY ORDER, (DKP) ? / DY/ASSTT. REGISTRAR .