Dalichand H. Oswal, Jalgaon V. Income-tax Officer,

ITA 2081/PUN/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2278 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 19-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASEEM SHARMA
• Keywords: Invalid notice; Period of limitation; Question of law; Time period of passing order; Reassessment proceedings
• Section: 143(3); 142(1); 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 2080 TO 2084/PN/2014 $& ' !(' / ASSESSMENT YEARS : 2005-06 TO 2009-10 SHRI DALICHAND H. OSWAL, PLOT NO. 3, GAURI SHANKAR, TELEPHONE NAGAR, JALGAON PAN : AAAPO4133C ....... / APPELLANT )& / V/S. INCOME TAX OFFICER, WARD 1(1), JALGAON / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI ASEEM SHARMA / DATE OF HEARING : 08-12-2015 / DATE OF PRONOUNCEMENT : 11-12-2015 * / ORDER PER VIKAS AWASTHY, JM : THESE FIVE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-2 , NASHIK FOR THE ASSESSMENT YEARS 2005-06 TO 2009-10. THE IMPUGNE D ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2005-06 AND 2007-08 ARE DATED 01-09-2014 AND ORDERS OF THE C OMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEARS 2006-07, 2008- 09 AND 2009-10 ARE DATED 02-09-2014. SINCE, THE FACTS AND CIRC UMSTANCES IN ALL THE ASSESSMENT YEARS ARE SIMILAR, THESE APPEALS ARE T AKEN UP TOGETHER FOR ADJUDICATION. 2 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 2. THE BRIEF FACTS OF THE CASE ARE : THE ASSESSEE IS AN IND IVIDUAL. THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEARS HAD FILED HIS RETURN OF INCOME, WHICH WERE ACCEPTED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). A SEARCH OPERAT ION U/S. 132 WAS CARRIED OUT AT THE PREMISES OF CHHORIYA GROUP OF JALGAON ON 22-08-2008. DURING THE COURSE OF SEARCH SOME ROUGH CA SH BOOKS AND CERTAIN OTHER DOCUMENTS WERE STATED TO HAVE BEEN FOUN D AND SEIZED. ON THE BASIS OF SAID SEIZED MATERIAL, IT WAS ALLEGED THAT THE ASSESSEE HAD GIVEN ADVANCES TO THE SAID CHHORIYA GROUP AND ALSO RECEIVED INTEREST THEREON. THE ASSESSING OFFICER ISSUED NOTICE DAT ED 22-06-2011 U/S. 148 OF THE ACT, WHICH WAS SERVED ON THE ASSESSEE O N 28-06-2011. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEARS DECLARING TOTAL INCOME AS DECL ARED IN THE ORIGINAL RETURN OF INCOME. THEREAFTER, THE ASSESSING OFFICE R ISSUED NOTICE TO THE ASSESSEE U/S. 143(2) ON 29-11-2012 WHICH W AS SERVED ON THE ASSESSEE ON 30-11-2012. THE ASSESSEE IN RESPONSE TO THE SAID NOTICE REQUESTED THE ASSESSING OFFICER TO SUPPLY HIM A CO PY OF REASONS RECORDED FOR INITIATING REASSESSMENT PROCEEDINGS U/S. 148 R.W.S. 147 OF THE ACT. THEREAFTER, ASSESSMENT U/S. 143(3) R.W.S. 147 OF THE ACT WERE MADE FOR THE IMPUGNED ASSESSMENT YEARS VIDE SEPARATE O RDERS ALL DATED 26-03-2013. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE PREFE RRED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) R AISING VARIOUS GROUNDS, CHALLENGING THE VIRES OF REASSESSMENT PRO CEEDINGS AS WELL AS ON MERITS. IN FIRST APPEAL, THE ASSESSEE HAD INTER ALIA ALLEGED THAT THE NOTICE U/S. 143(2) WAS ISSUED BEYOND THE STATUT ORY TIME. ACCORDING TO THE ASSESSEE THE LIMITATION FOR ISSUING NOTICE U/S. 143(2) EXPIRED ON 30-09-2012, WHEREAS IT WAS ISSUED ON 29-11-2 012 AND WAS SERVED ON ASSESSEE ON 30-11-2012. THE COMMISSIONER OF INCOME TAX 3 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 (APPEALS) SOUGHT REMAND REPORT ON THE ISSUES RAISED BEFO RE HIM. IN THE REMAND REPORT THE ASSESSING OFFICER ADMITTED THAT THE NO TICE WAS ISSUED TO THE ASSESSEE U/S. 143(2) BEYOND TIME. HOWEVER, THE CONTENTIONS OF THE ASSESSEE WERE REJECTED UNDER THE S HELTER OF SECTION 292BB OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS ) HELD THAT THE ASSESSEE HAD NOT RAISED ANY OBJECTION BEFORE THE C OMPLETION OF ASSESSMENT OR REASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSEE CANNOT TAKE THE PLEA AT APPELLATE STAGE THAT THE NOTICE U/S. 143(2) WAS DEFECTIVE. THE ASSESSEE FULLY COOPERATED WITH THE ASSESS ING OFFICER DURING ASSESSMENT PROCEEDINGS AND NO OBJECTION WHATSOE VER WAS RAISED BY THE ASSESSEE BEFORE THE COMPLETION OF REASSESSMENT REGARDING ISSUE OF NOTICE U/S. 143(2) BEYOND TIME. THE COMMISSIONER OF INCOM E TAX (APPEALS) ACCORDINGLY, REJECTED THIS GROUND RAISED BY THE ASSESSEE. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUG NED ORDER PARTLY ACCEPTED THE APPEALS OF THE ASSESSEE O N MERITS. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING T HE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALL THE IMPUGNED AS SESSMENT YEARS ON THE GROUND OF JURISDICTION AS WELL AS ON MERITS. 3. SHRI SUNIL GANOO APPEARING ON BEHALF OF THE ASSESSEE SU BMITTED THAT AT THIS STAGE HE IS PRESSING ONLY SINGLE ISSUE BEFORE THE TRIBUNAL, THAT THE REASSESSMENT PROCEEDINGS U/S. 147 ARE INVALID, A S THE NOTICES ISSUED TO THE ASSESSEE U/S. 143(2) IN ALL THE IMPUGNED ASSE SSMENT YEARS IS BARRED BY LIMITATION. AS PER THE PROVISIONS OF SE CTION 143(2) THE NOTICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE BE FORE THE EXPIRY OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE R ETURN IS FURNISHED. IN THE PRESENT CASE, THE ASSESSEE HAD FURNISH ED THE RETURN OF INCOME FOR ALL THE IMPUGNED ASSESSMENT YEARS ON 26-07 -2011. THEREFORE, THE LIMITATION FOR SERVING OF THE NOTICE U/S. 143(2) WAS 30-09-2012 I.E. 6 MONTHS FROM THE END OF THE FINANCIAL YEAR ENDING ON 4 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 31-03-2012. WHEREAS, THE NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 29-11-2012. THIS FACT HAS BEEN ADMITTED BY THE ASSESSING OFFICER IN THE REMAND REPORT AS WELL AS BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. AR CONTENDED THAT VARIOUS HON'BLE HIGH COURTS HAVE HELD THAT IF THE NOTICE U/S. 143(2) HAS NOT BEEN SERV ED WITHIN THE STATUTORY TIME FRAME, THE ASSESSMENT PROCEEDINGS ARE VO ID. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. COMMISSIONER OF INCOME TAX VS. K M RAVJI, TAX APPEAL NO. 77 1 OF 2010 DECIDED ON 18-07-2011 BY HON'BLE HIGH COURT OF GUJARAT; II. PR. COMMISSIONER OF INCOME TAX & ANR. VS. SILVER LINE & ANR., 94 CCH 77 (DEL. H.C.); III. COMMISSIONER OF INCOME TAX VS. CEBON INDIA LTD., 347 ITR 5 83 (P&H); IV. ASSISTANT COMMISSIONER OF INCOME TAX VS. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY, 93 CCH 185 (ALL. H.C.); V. MACHALE GOVINDRAO NAMDEORAO VS. ITO, ITA NO. 1982/PN/201 2 FOR ASSESSMENT YEAR 2008-09 DECIDED ON 08-01-2014 (PUNE TRIB.). NO OTHER GROUNDS RAISED IN THE APPEALS WERE PRESSED B Y THE LD. AR OF THE ASSESSEE. 4. SHRI ASEEM SHARMA REPRESENTING THE DEPARTMENT VEHE MENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEA LS). THE LD. DR SUBMITTED THAT NOTICE U/S. 143(2) WAS ADMITTEDLY ISSU ED TO THE ASSESSEE ON 29-11-2012. HOWEVER, NO OBJECTION WHATSOE VER WAS RAISED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FULLY COOPERATED DURING THE REASSESSMENT PROCEEDINGS AN D THERE WAS NO WHISPER FROM THE SIDE OF THE ASSESSEE REGARDING ISSUE OF NOTICE U/S. 143(2) BEYOND TIME. THE REASSESSMENT PROCEEDINGS U/S. 1 47 FOR THE 5 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 IMPUGNED ASSESSMENT YEARS WERE WITHIN THE TIME LIMIT AND THE ASSESSEE HAD FILED RETURN OF INCOME FOR THE IMPUGNED ASSES SMENT YEAR IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. THE ASSE SSEE EVEN RESPONDED TO THE NOTICE ISSUED U/S. 143(2) VIDE LETTER DAT ED 07-12-2012 AND 25-03-2013. THE LD. AR OF THE ASSESSEE ATTENDED TH E PROCEEDINGS ON 25-03-2013 IN WHICH REASONS FOR REOPENING THE ASSESS MENT WERE DISCUSSED. HOWEVER, AT NO STAGE DURING ASSESSMENT PROC EEDINGS THE LD. AR OF THE ASSESSEE RAISED ANY OBJECTION WITH REGARD TO NOTICE U/S. 143(2). THEREFORE, THE ASSESSEE IS PRECLUDED FROM CHALLENG ING THE VALIDITY OF NOTICE U/S. 143(2) AFTER COMPLETION OF THE ASSESSME NT. THE ASSESSEE RAISED OBJECTION FOR THE FIRST TIME IN RESPECT OF NOTICE U/S. 143(2) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). AS P ER THE PROVISIONS OF SECTION 292BB, WHERE THE ASSESSEE HAD APPE ARED IN THE PROCEEDINGS AND HAS COOPERATED IN ANY ENQUIRY RELATING T O ASSESSMENT OR REASSESSMENT IT SHALL BE DEEMED THAT THE NOTICE UNDE R ANY PROVISION OF THE ACT HAS BEEN DULY SERVED UPON HIM. THE ASSESS EE IS ESTOPPED FROM TAKING ANY OBJECTION WITH RESPECT TO NON-SERVICE OF NOTICE OR NON- SERVICE OF NOTICE WITHIN TIME OR SERVICE OF NOTICE IN IMPROPER MANNER. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF THE COMM ISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BE LOW. THE ONLY ISSUE RAISED BY THE LD. AR BEFORE US IS WITH RESPECT TO THE ISSUE OF N OTICE U/S. 143(2) BEYOND THE STATUTORY TIME AS ENVISAGED UNDER THE PROVISIONS OF SECTION 143(2) OF THE ACT. BEFORE WE PROCEED TO DECIDE THIS ISSUE IT WOULD BE RELEVANT TO FIRST HAVE A LOOK AT THE RELEVANT DATES: 6 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 SL. NO. DATES EVENTS 1 22 - 06 - 2011 NOTICE U/S. 148 OF THE ACT ISSUED TO THE ASSESSEE. 2 28 - 06 - 2011 NOTICE U/S. 148 SERVED ON THE ASSESSEE. 3 26 - 07 - 2011 THE ASSESSEE FILED HIS RETURN OF INCOME FOR ALL THE IMPUGNED ASSESSMENT YEARS IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. 4 30 - 09 - 2012 DUE DATE FOR ISSUE OF NOTICE U/S. 143(2) OF THE ACT. 5 29 - 11 - 2012 NOTICE U/S. 143(2) ISSUED TO THE ASSESSEE. 6 30 - 11 - 2012 NOTICE U/S. 143(2) SERVED UPON THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS SERVED WITH NOTICE U/S. 143(2) ON 30-11-2012. AS PER THE PROVISIONS OF SECTIO N 143(2) THE NOTICE HAS TO BE SERVED ON THE ASSESSEE WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN IS FURNISHE D. THE RELEVANT EXTRACT OF THE PROVISIONS OF SECTION 143(2) ARE AS UNDER: [(2) WHERE A RETURN HAS BEEN FURNISHED UNDER SECTI ON 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, THE ASSESSING OFFICER SHALL, (I) XXXXXXXXXX (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HA S NOT UNDER-PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE R EQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASS ESSEE MAY RELY IN SUPPORT OF THE RETURN: [ PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED.]] 6. THE STAND OF THE REVENUE IS THAT THE ASSESSEE IS PR ECLUDED FROM TAKING THE SHELTER OF DEFECTIVE/INVALID NOTICE AS HE HAS PAR TICIPATED IN THE ASSESSMENT/REASSESSMENT PROCEEDINGS WITHOUT RAISING ANY OBJECTION. THE REVENUE HAS TAKEN THE COVER OF SECTION 292BB TO STRENGTHEN ITS STAND. 7 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 7. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF COMMISS IONER OF INCOME TAX VS. K M RAVJI (SUPRA) WHILE DEALING WITH THE SIMILAR CONTROVERSY REJECTED THE ARGUMENT OF THE REVENUE. TH E RELEVANT EXTRACT OF THE JUDGMENT OF THE HON'BLE HIGH COURT IS AS UNDER: 8. IN THE PRESENT CASE, ADMITTEDLY, NO NOTICE WAS ISSU ED UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME ENVISAGED BY THE LEGISLATURE IN THE SAID PROVISION. THAT BEING THE POSITION, QUESTI ON OF ITS SERVICE EITHER WITHIN OR BEYOND THE TIME PERMITTED, OR ITS IMPROPE R SERVICE WOULD NOT ARISE. WHAT SECTION 292BB OF THE ACT DEBARS IS ANY CHALLENGE BY THE ASSESSEE, WHO APPEARED BEFORE THE ASSESSING OFFICER WITH RESPECT TO NON-SERVICE, SERVICE WITHIN TIME OR IMPROPER SERVIC E OF A NOTICE PROVIDED HE HAS NOT RAISED SUCH AN OBJECTION BEFORE COMPLETI ON OF THE ASSESSMENT OR REASSESSMENT PROCEEDINGS. 9. SIGNIFICANTLY, SECTION 292BB DOES NOT SAVE NON-I SSUANCE OF NOTICE BEFORE THE EXPIRY OF LIMITATION PERIOD. IN OUR VIEW , SECTION 292BB CAN CURE ONLY A DEFECT IN SERVICE, SERVICE WITHIN TIME, OR IMPROPER SERVICE OF NOTICE. IT IS NOT AIMED AT CURING THE DEFECT OF NON -ISSUANCE OF NOTICE WITHIN THE STATUTORY PERIOD. 10. WE MAY NOTICE THAT IN THE PRESENT CASE, TRIBUNA L HAD RENDERED ITS DECISION IN THE YEAR 2006. SECTION 292BB WAS INTROD UCED WITH EFFECT FROM 1.4.2008. WE HAVE SERIOUS DOUBT WHETHER SUCH P ROVISION CAN BE APPLIED TO CASE ON HAND. HOWEVER, WITHOUT ENTERING INTO SUCH CONTROVERSY, WE ARE OF THE OPINION THAT PROVISIONS CONTAINED IN SECTION 292BB ALSO WOULD NOT SAVE THE PROCEEDINGS IN THE PR ESENT CASE. TAX APPEAL IS, THEREFORE, DISMISSED. 8. IN THE CASE OF PR. COMMISSIONER OF INCOME TAX & ANR. V S. SILVER LINE & ANR. (SUPRA), THE HON'BLE DELHI HIGH COURT HELD THAT THE REASSESSMENT ORDER CANNOT BE PASSED WITHOUT COMPLIANC E WITH THE MANDATORY REQUIREMENT OF NOTICE BEING ISSUED BY THE ASS ESSING OFFICER TO THE ASSESSEE U/S. 143(2) OF THE ACT. IN THE SAID CAS E THE REASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE ASSE SSEE AND THE NOTICE U/S. 148 WAS ISSUED ON 28-03-2011. THE ASSESSE E IN REPLY TO THE NOTICE U/S. 148 STATED THAT THE RETURN ORIGINALLY FILED SHOULD BE TREATED AS RETURN OF INCOME IN RESPONSE TO THE AFORESAID NOTICE. THE 8 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 REASSESSMENT PROCEEDINGS WERE FINALIZED AND ASSESSMENT O RDER WAS PASSED BY THE ASSESSING OFFICER ON 28-12-2011. THE ASSE SSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ASSA ILING THE REASSESSMENT PROCEEDINGS AS WELL AS REASSESSMENT ORDER ON MERITS. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE REOPEN ING OF ASSESSMENT BUT ALLOWED THE APPEAL OF THE ASSESSEE ON ME RITS. AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) THE REV ENUE FILED APPEAL BEFORE THE TRIBUNAL. THE ASSESSEE FILED CROSS OBJEC TIONS. THE ASSESSEE RAISED AN ADDITIONAL GROUND BEFORE THE TRIBUNAL T HAT NO NOTICE U/S. 143(2) OF THE ACT HAD BEEN ISSUED PRIOR TO THE FINALIZAT ION OF THE REASSESSMENT ORDER AND THEREFORE THE REASSESSMENT OR DER ARE WITHOUT JURISDICTION. THE TRIBUNAL AFTER CONSIDERING THE ADDITIONAL GR OUND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE REVENUE CARRIED THE MATTER IN APPEAL BEFORE THE HON'BLE HIGH COURT. ONE OF T HE ARGUMENTS RAISED BY THE REVENUE WAS THAT IN VIEW OF THE PROVISIONS OF SECTION 292BB OF THE ACT THE ASSESSEE IS PRECLUDED AT THE STAG E OF PROCEEDINGS BEFORE THE TRIBUNAL FROM RAISING THE ARGUMENT OF NON-ISSUA NCE OF NOTICE U/S. 143(2) OF THE ACT. THE HON'BLE HIGH COURT DISMISSING TH E APPEAL OF THE REVENUE HELD AS UNDER: 12. THE COURT FIRST PROPOSES TO CONSIDER THE QUEST ION AS TO WHETHER IN TERMS OF THE PROVISO TO SECTION 292BB OF THE ACT, T HE ASSESSEE WAS PRECLUDED, AT THE STAGE OF THE PROCEEDINGS BEFORE T HE ITAT, FROM RAISING A CONTENTION REGARDING FAILURE OF THE AO TO ISSUE A N OTICE UNDER SECTION 143(2) OF THE ACT. THE LEGAL POSITION APPEARS TO BE FAIRLY WELL SETTLED THAT SECTION 292BB OF THE ACT TALKS OF THE DRAWING OF A PRESUMPTION OF SERVICE OF NOTICE ON AN ASSESSEE AND IS BASICALLY A RULE OF EVIDENCE. IN COMMISSIONER OF INCOME TAX V. PARIKALPANA ESTATE DE VELOPMENT (P.) LTD. (SUPRA) IN ANSWERING A SIMILAR QUESTION, THE COURT R EFERRED TO ITS EARLIER DECISION IN COMMISSIONEROF INCOME TAX V. MUKESH KUMAR AGRAWAL (2012) 345 ITR 29 (ALL.) AND POINTED OUT THAT SECTION 292BB OF THE ACT WAS A RULE OF EVIDENCE WHICH VALIDATED S ERVICE OF NOTICE IN CERTAIN CIRCUMSTANCES. IT INTRODUCES A DEEMING FICT ION THAT ONCE THE ASSESSEE APPEARS IN ANY PROCEEDING OR HAS COOPERATE D IN ANY ENQUIRY RELATING TO ASSESSMENT OR REASSESSMENT IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THE ACT THAT IS REQUI RED TO BE SERVED HAS 9 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 BEEN DULY SERVED UPON HIM IN ACCORDANCE WITH THE PR OVISIONS OF THE ACT AND THE ASSESSEE IN THOSE CIRCUMSTANCES WOULD BE PR ECLUDED FROM OBJECTING THAT A NOTICE THAT WAS REQUIRED TO BE SER VED UPON HIM UNDER THE ACT WAS NOT SERVED UPON HIM OR NOT SERVED IN TIME O R WAS SERVED IN AN IMPROPER MANNER. IT WAS HELD THAT SECTION 292BB OF THE ACT IS A RULE OF EVIDENCE AND IT HAS NOTHING TO DO WITH THE MANDATOR Y REQUIREMENT OF GIVING A NOTICE AND ESPECIALLY A NOTICE UNDER SECTI ON 143(2) OF THE ACT WHICH IS A NOTICE GIVING JURISDICTION TO THE AO TO FRAME AN ASSESSMENT. THE DECISION OF THE ALLAHABAD HIGH COURT IN MANISH PRAKASH GUPTA V. COMMISSIONER OF INCOME TAX (SUPRA) IS ALSO TO THE SAME EFFECT. 13. IN PR. CIT V. SHRI JAI SHIV SHANKAR TRADERS PVT. LTD. (SUPRA), THIS COURT HAS ALSO DISCUSSED THE DISTINCTION BETWE EN A FAILURE TO 'ISSUE' NOTICE AND A FAILURE TO 'SERVE' A NOTICE ON AN ASSE SSEE. IT WAS HELD, AFTER NOTICING THE DECISIONS OF THE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME TAX V. RAJEEV SHARMA (2011) 336 ITR 678 AND COMMISSIONER OF INCOME-TAX-II, LUCKNOW V. SALARPUR COLD STORAGE (P.) LTD. [2014] 50 TAXMANN.COM 105 (ALL.) AND THE DECISION OF THE MADRAS HIGH COURT IN SAPTHAGIRI FINANCE & INVESTMENTS V. INCOME TAX OFFICER (2013) 90 DTR (MAD) 289 ), THAT SECTION 292 BB OF THE ACT WOULD APPLY INSOFAR AS FAILURE OF 'SERVICE' OF NOTI CE WAS CONCERNED AND NOT WITH REGARD TO THE FAILURE TO 'ISSUE' NOTICE. I N OTHER WORDS, THE FAILURE OF THE AO, IN RE-ASSESSMENT PROCEEDINGS, TO ISSUE N OTICE UNDER SECTION 143(2) OF THE ACT, PRIOR TO FINALISING THE RE-ASSES SMENT ORDER, CANNOT BE CONDONED BY REFERRING TO SECTION 292BB OF THE ACT. 14. CONSEQUENTLY, THE COURT DOES NOT FIND MERIT IN THE OBJECTION OF THE REVENUE THAT THE ASSESSEE WAS PRECLUDED FROM RAISIN G THE POINT CONCERNING THE NON-ISSUANCE OF NOTICE UNDER SECTION 143 (2) OF THE ACT IN THE PRESENT CASE IN VIEW OF THE PROVISO TO SECTION 292BB OF THE ACT. 15. THE COURT ALSO FINDS MERIT IN THE CONTENTION OF THE ASSESSEE THAT IN ANY EVENT AS FAR AS AYS 2005-06 TO 2007-08 IS CONCE RNED, SECTION 292BB OF THE ACT WOULD NOT APPLY SINCE IT IS PROSPE CTIVE IN ITS APPLICATION, I.E., APPLICABLE FROM AY 2008-09 ONWARDS. THE LEGAL POSITION IN THIS REGARD APPEARS TO BE WELL SETTLED AS EXPLAINED IN CIT V. KUBER TOBACCO PRODUCERS P. LTD. (SUPRA) AND COMMISSIONER OF INCOME TAX V. MOHAMMAD KHALEEQ (SUPRA). 16. AS REGARDS THE OBJECTION OF THE REVENUE TO THE ITAT PERMITTING THE ASSESSEE TO RAISE THE POINT CONCERNING NON-ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT FOR THE FIRST TIME IN THE APPEAL BEFORE THE ITAT, THE COURT IS OF THE CONSIDERED VIEW THAT IN VIEW OF THE SETTLED LEGAL POSITION THAT THE REQUIREMENT OF ISSUANCE OF SUCH N OTICE IS A JURISDICTIONAL 10 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 ONE, IT DOES GO TO THE ROOT OF THE MATTER AS FAR AS THE VALIDITY OF THE REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF T HE ACT IS CONCERNED. IT RAISES A QUESTION OF LAW AS FAR AS TH E PRESENT CASES ARE CONCERNED SINCE IT IS NOT IN DISPUTE THAT PRIOR TO FINALISATION OF THE REASSESSMENT ORDERS, NOTICE UNDER SECTION 143(2) OF THE ACT WAS NOT ISSUED BY THE AO TO THE ASSESSEE. WITH THERE BEING NO FRESH EVIDENCE OR DISPUTED FACTS SOUGHT TO BE BROUGHT ON RECORD, AND THE ISSUE BEING PURELY ONE OF LAW, THE ITAT WAS NOT IN ERROR IN PERMITTING THE ASSESSEE TO RAISE SUCH A POINT BEFORE IT. THIS FINDS SUPPORT IN THE D ECISION OF THE SUPREME COURT IN NATIONAL THERMAL POWER CO. LTD. V. COMMISSIONER OF INCOME TAX (SUPRA) AND THE DECISION OF THIS COURT IN GEDORE TOOLS (P) LTD. V. COMMISSIONER OF INCOME TAX (SUPRA). 17. ON THE QUESTION OF WHETHER THE NOTICE UNDER SEC TION 143(2) OF THE ACT WAS IN THE FACTS AND CIRCUMSTANCES MANDATORY, MR. S AHNI SOUGHT TO DISTINGUISH THE LONG LINE OF DECISIONS INCLUDING TH E RECENT DECISION OF THIS COURT IN PR. CIT V. SHRI JAI SHIV SHANKAR TRADERS PVT. LTD. (SUPRA) ON THE GROUND THAT THERE WAS NO OCCASION FOR THE AO TO ISSUE ANY NOTICE UNDER SECTION 143 (2) OF THE ACT SINCE THE ASSESSEE HAD, IN FACT, NOT FILED A RETURN. HE SUBMITTED THAT THE ORIGINAL RETURN WAS FILED IN THE 'SARAL FORM' WHICH HAD SINCE BEEN REPLACED WITH A DIFFEREN T FORM FOR FILING OF RETURNS. CONSEQUENTLY, THE SAID RETURN COULD NOT HA VE BEEN TREATED AS A RETURN FILED PURSUANT TO THE NOTICE ISSUED TO THE A SSESSEE UNDER SECTION 148 OF THE ACT. HE FURTHER SUBMITTED THAT WITH NO D ISCREPANCY HAVING BEEN FOUND BY THE AO IN THE RETURNS FOR AYS 2005-06 TILL 2007-08, WHICH WERE PROCESSED UNDER SECTION 143 (1) OF THE ACT, TH ERE WAS NO OCCASION FOR THE AO TO ISSUE A NOTICE UNDER SECTION 143 (2) OF THE ACT. MR. SAHNI SUBMITTED THAT IN THE CIRCUMSTANCES, THE ACTION OF THE AO IN FINALISING THE REASSESSMENT ORDERS WITHOUT NOTICE UNDER SECTION 14 3 (2) OF THE ACT WAS JUSTIFIED. 18. THE WORDING OF SECTION 143(2)(II) OF THE ACT, W HICH IS APPLICABLE IN THE PRESENT CASE, REQUIRES THE AO TO BE SATISFIED ON EX AMINING THE RETURN FILED THAT PRIMA FACIE THE ASSESSEE HAS UNDERSTATE D THE INCOME OR HAS COMPUTED EXCESSIVE LOSS OR HAS UNDERPAID THE TAX IN ANY MANNER . THE AO HAS THE DISCRETION TO ISSUE A NOTICE UNDER S ECTION 143 (2) IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO DO SO. THIS EXERCISE BY THE AO UNDER SECTION 143 (2) OF THE ACT IS QUALITATIVELY D IFFERENT FROM THE ISSUANCE OF A NOTICE UNDER SECTION 142(1) OF THE AC T, WHICH AS NOTED HEREINBEFORE, IS IN A STANDARD PROFORMA. 19. THE COURT IS UNABLE TO ACCEPT THE SUBMISSION OF THE REVENUE THAT IN THE PRESENT CASE, NO RETURN WAS FILED BY THE ASSESS EE PURSUANT TO THE NOTICE ISSUED TO IT UNDER SECTION 148 OF THE ACT. I F AFTER RECEIVING THE LETTER 11 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 DATED 1ST APRIL 2011 OF THE ASSESSEE THE AO WAS OF THE VIEW THAT THE RETURN ORIGINALLY FILED IN THE SARAL FORM COULD NOT BE TREATED AS THE RETURN PURSUANT TO THE NOTICE UNDER SECTION 148 OF THE ACT , THEN HE SHOULD HAVE DRAWN THE ATTENTION OF THE ASSESSEE TO THAT FACT. I N THE PRESENT CASE ALL THAT THE AO DID WAS TO SEND A NOTICE UNDER SECTION 142 (1) OF THE ACT. THE ASSESSEE WAS NOT MADE AWARE AS TO WHY HE WAS REQUIR ED TO FILE A RETURN. HAD A NOTICE BEEN ISSUED TO HIM UNDER SECTI ON 143 (2) OF THE ACT, THE AO WOULD HAVE BEEN OBLIGED TO LET THE ASSESSEE KNOW WHY HE WAS BEING ASKED TO FILE A RETURN NOTWITHSTANDING HIS LE TTER DATED 1ST APRIL 2011. IN THE CIRCUMSTANCES, THE ASSESSEE WAS JUSTIF IED IN PROCEEDING ON THE BASIS THAT IT HAD NOT COMMITTED ANY DEFAULT IN COMMUNICATING TO THE AO THAT THE RETURN ALREADY FILED SHOULD BE TREATED AS THE RETURN FILED PURSUANT TO THE NOTICE UNDER SECTION 148 OF THE ACT . 20. THE PROPOSAL TO REOPEN AN ASSESSMENT UNDER SECT ION 147 OF THE ACT IS TO BE BASED ON REASONS TO BE RECORDED BY THE AO. SUCH REASONS HAVE TO BE COMMUNICATED TO THE ASSESSEE. HOWEVER, MERELY BECAUSE THE ASSESSEE PARTICIPATES IN THE PROCEEDINGS PURSUANT T O SUCH NOTICE UNDER SECTION 148 OF THE ACT, IT DOES NOT OBVIATE THE MAN DATORY REQUIREMENT OF THE AO HAVING TO ISSUE TO THE ASSESSEE A NOTICE UND ER SECTION 143(2) OF THE ACT BEFORE FINALISING THE ORDER OF THE REASSESS MENT. 21. IN THIS CONTEXT REFERENCE MAY BE MADE TO THE DE CISION OF THE MADRAS HIGH COURT IN SAPTHAGIRI FINANCE & INVESTMENTS V. INCOME TAX OFFICER (SUPRA) WHERE AGAIN THE ASSESSEE DID NOT FILE A RET URN PURSUANT TO SECTION 148 OF THE ACT. THE AO THEN ISSUED A NOT ICE TO IT UNDER SECTION 142(1) OF THE ACT. THE ASSESSEE THEREAFTER APPEARED BEFORE THE AO AND STATED THAT THE ORIGINAL RETURN FILED SHOULD BE TRE ATED AS THE RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT. IN THOSE CIRCUMSTANCES, THE HIGH COURT OBSERVED THAT IF THER E WAS SOME EXPLANATION THAT WAS REQUIRED TO BE OFFERED BY THE ASSESSEE, NOTWITHSTANDING THE ABOVE SUBMISSION MADE BY IT, TH E AO OUGHT TO HAVE ISSUED A NOTICE UNDER SECTION 143(2) OF THE ACT. TH E MADRAS HIGH COURT OBSERVED: 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 UNDER SECTION 143(2) OF THE ACT WAS COMPL IED WITH OR THAT ON PLACING THE OBJECTION THE ASSESSEE HAD WAIVED TH E NOTICE FOR FURTHER PROCESSING OF THE REASSESSMENT PROCEEDINGS. THE FACT THAT ON THE NOTICE ISSUED U/S 143(2) OF THE ACT, THE ASS ESSEE HAD PLACED ITS OBJECTION AND REITERATED ITS EARLIER RET URN FILED AS ONE FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF T HE ACT AND THE OFFICER HAD ALSO NOTED THAT THE SAME WOULD BE CONSI DERED FOR 12 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 COMPLETING OF ASSESSMENT, WOULD SHOW THAT THE AO HA S THE DUTY OF ISSUING THE NOTICE UNDER SECTION 143(3) TO LEAD ON TO THE PASSING OF THE ASSESSMENT. IN THE CIRCUMSTANCES, WITH NO NO TICE ISSUED U/S 143(3) AND THERE BEING NO WAIVER, THERE IS NO J USTIFIABLE GROUND TO ACCEPT THE VIEW OF THE TRIBUNAL THAT THER E WAS A WAIVER OF RIGHT OF NOTICE TO BE ISSUED U/S 143(2) OF THE A CT. 22. THE DECISIONS OF THE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME TAX V. RAJEEV SHARMA (SUPRA) AND COMMISSIONER OF INCOME- TAX-II, LUCKNOW V. SALARPUR COLD STORAGE (P.) LTD. (SUPRA) ALSO REITERATE THE ABOVE LEGAL POSITION. AS FAR AS THIS COURT IS CONCERNED, THE DECISION IN DIRECTOR OF INCOME TAX V. SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATIONS (2010) 323 I TR 249 (DEL) AND THE RECENT DECISION IN PR. CIT V. SHRI JAI SHIV SHANKAR TRADERS PVT. LTD. (SUPRA) HOLD LIKEWISE. 23. WITH THE LEGAL POSITION BEING ABUNDANTLY CLEAR THAT A REASSESSMENT ORDER CANNOT BE PASSED WITHOUT COMPLIANCE WITH THE MANDATORY REQUIREMENT OF NOTICE BEING ISSUED BY THE AO TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT, THE ITAT WAS IN THE PRES ENT CASE RIGHT IN CONCLUDING THAT THE REASSESSMENT ORDERS IN QUESTION WERE LEGALLY UNSUSTAINABLE. 9. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. C EBON INDIA LTD. (SUPRA) AND THE HON'BLE ALLAHABAD HIGH COURT IN THE CA SE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. GREATER NOIDA IN DUSTRIAL DEVELOPMENT AUTHORITY (SUPRA). THE PUNE BENCH OF THE TR IBUNAL IN THE CASE OF MACHALE GOVINDRAO NAMDEORAO VS. ITO (SUPRA) HELD T HE ASSESSMENT ORDER VOID AB-INITIO FOR THE NON-ISSUANCE OF NO TICE U/S. 143(2) OF THE ACT. 10. THE ISSUANCE OF NOTICE U/S. 143(2) BEYOND THE STATUTORY TIME LIM IT IS AN INCURABLE DEFECT. THEREFORE, THE NOTICE ISSUED U/S. 14 3(2) BEYOND THE PERIOD OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN OF INCOME HAS BEEN FILED IS BAD IN LAW AND THE PROCE EDINGS ARISING THERE FROM ARE VITIATED. SINCE, IN THE PRESENT CAS E THE NOTICE 13 ITA NOS. 2080 TO 2084/PN/2014, A.YS. 2005-06 TO 2009-10 HAS BEEN ISSUED U/S. 143(2) BEYOND THE STATUTORY TIME LIMIT THE NOTICE AND THE SUBSEQUENT PROCEEDINGS ARISING THERE FROM ARE V OID AND AB- INITIO. WE FIND MERIT IN THE SUBMISSIONS OF THE LD. AR OF THE A SSESSEE AND ALLOW THE APPEALS OF THE ASSESSEE. SINCE THE APPEA LS OF THE ASSESSEE HAVE BEEN ACCEPTED ON THE PRELIMINARY GROUND OF DEFECTIVE NOTICE, ALL THE OTHER GROUNDS RAISED IN THE MEMO OF APPEAL ON MERITS HAVE BECOME ACADEMIC AND THUS ARE NOT TAKEN UP FOR ADJUDICATION . 10. IN THE RESULT, THE IMPUGNED ORDERS ARE SET ASIDE AN D THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2005-06 TO 2009-10 ARE A LLOWED. ORDER PRONOUNCED ON FRIDAY, THE 11 TH DAY OF DECEMBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 11 TH DECEMBER, 2015 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-2, NASHIK 4. ' / THE CIT-2, NASHIK 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE