Lalji & Sons, Bankura V. ACIT, Circle - Bankura, Bankura

ITA 220/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1851 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 15-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AARINDAM BHATTACHARJEE
• Assessee Lawyers: D K SEN
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Opportunity of being heard; Period of limitation; Fair market value; Procedural lapse; Block assessment
• Section: 148; 132; 139; 143(3); 50C; 142(1); 153A; 243B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C B ENCH, KOLKATA BEFORE : SHRI M. BALAGANESH,ACCOUNTANT MEM BER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NOS. 220 TO 222/KOL/2016 A.YS : 2003-04, 04-05 & 05-06 M/S. LALJI & SONS VS. A.C.I.T, CIRCLE-BANKURA PAN: AABFL 0085B BANKURA [APPELLANT-ASSESSEE ] [DEPARTMENT-RESPONDE NT ] APPELLANT BY : SHRI D.K. SEN, ADVOCATE, LD.AR RESPONDENT BY : SHRI ARINDAM BHATTACHARJEE, A DDL, CIT, LD.DR DATE OF HEARING : 14-11-2017 DATE OF PRONOUNCEMENT : 25-01-2018 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THESE THREE APPEALS BY THE ASSESSEE ARE AGAINST THE SEPARATE ORDERS DT: 16-12-2015 OF THE CIT-(A), DURGAPUR FOR THE A.YS : 2003- 04, 04-05 & 2005-06 RESPECTIVELY. 2. THE ONLY EFFECTIVE ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT- (A) WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE AO PASSED U/S. 143(3)/147 OF THE ACT WITHOUT THERE BEING NOTICE IS SUED U/S. 143(2) OF THE ACT IN THE FACT AND CIRCUMSTANCES OF THE CAS E. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM AND DERIVES ITS INCOME FROM HOUSE PROPERTY & CAPITAL GA INS. THE ASSESSEE FILED ITS RETURN ON 22-09-03 SHOWING A TOTAL INCOME OF RS.1,96,808/-. ACCORDINGLY, THE SAID RETURN WAS PROCESSED BY RAISI NG A DEMAND OF RS.206/-. SUBSEQUENTLY, ON AN INFORMATION REGARDING DECLARATION OF LESS VALUE OF THE PROPERTY BY ISSUING A NOTICE U/S . 148 OF THE ACT, THE AO REOPENED THE ORIGINAL ASSESSMENT AND DETERMINED THE LONG TERM CAPITAL GAIN HEREINAFTER FOR SHORT LTCG AT RS.7,5 9,300/- BY AN ORDER DT. 18-12-09 PASSED U/S. 143(3)/147 OF THE ACT. ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 2 4. AGGRIEVED, THE ASSESSEE CHALLENGED THE SAME BEF ORE THE CIT-A. BEFORE HIM THE MAIN CONTENTION RAISED BY THE ASSESS EE WAS THAT THE AO ASSUMED HIS JURISDICTION WITHOUT ISSUING A NOTIC E U/S. 143(2) OF THE ACT TO THE ASSESSEE AND, THEREFORE, THE ASSESSE E CHALLENGED THE VALIDITY OF SAID ASSESSMENT MADE U/S. 143(3)/147 OF THE ACT IS BAD IN LAW. 5. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT-A, IN TURN, SOUGHT REMAND REPORT FROM THE AO REGARDING THE ISSU ANCE OF NOTICE U/S. 143(2) OF THE ACT. THE CIT (A) CONSIDERING THE REMAND REPORT CONFIRMED THE IMPUGNED ASSESSMENT AND UPHELD THE VI EW OF AO IN TAKING RECOURSE TO SECTION 292B OF THE ACT BY STATI NG AS UNDER:- 7. I HAVE GONE THROUGH THE SUBMISSION OF THE APPE LLANT. THE ASSESSEE HAS PARTICIPATED VOLUNTARILY AND PEACEFULLY IN THE APPE LLATE PROCEEDINGS. PARTICIPATION IS SUFFICIENT FOR THE VALIDITY OF THE NOTICE, AS PER T HE RATIO LAID DOWN IN THE CASE OF CIT VS. UTTAM CHANDRA NAHAR; 295 ITR 403 RAJ. I ALSO AGREE WITH THE ARGUMENT OF THE AO THAT BY ISSUE OF NOTICE U/S. 143(2), THE ASSESSEE IS GI VEN AN OPPORTUNITY TO SUBSTANTIATE THAT INCOME DISCLOSED BY HIM IS CORRECT. IN THIS CO NTEXT, I AM ENCLOSING A COPY OF LETTER NO. 264, DT. 01/12/2009 ISSUED TO THE ASSESSEE WHIC H CLEARLY SHOWS THAT THE ASSESSEE WAS ASKED TO EXPLAIN THAT THERE WAS NO CONCEALMENT OF CAPITAL GAINS ON HIS PART. THUS SPIRIT OF ISSUE OF NOTICE U/S. 143(2) IS SERVED. IN THIS REGARD IT WOULD NOT BE OUT OF PLACE TO REPRODUCE THE TEXT OF SECTION 292B, WHICH READS AS UNDER:- ' SECTION 292B: NO RETURN OF INCOME, ASSESSMENT, NO TICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE O F ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF I NCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFF ECT IN CONFORMITY WITH ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT.' THUS BY VIRTUE OF SECTION 292B OF THE IT ACT 1961, THE ASSESSMENT IS NOT BAD IN LAW ONLY BECAUSE NOTICE U/S 143(2) WAS NOT ISSUED.' IN THE CASE OF K.G. THOMAS VS. CIT; 303 ITR 303 KER ALA; IT WAS OBSERVED THAT NOT NOTICE UNDER SECTION 143(2) WAS RECEIVED BUT OPPORT UNITY WAS AVAILED, THEN REASSESSMENT IS VALID. SIMILAR VIEWS WERE EXPRESSED IN THE CASE OF CIT VS. T.C.P. LIMITED (2010) 235 CTR 414 MAD. FURTHER, IN ANY TECHNICAL DIFFICULTY, THE PROCEEDIN G MAY BE IRREGULAR BUT NOT INVALID. THE PROCEDURAL IRREGULARITY CAN BE RECTIFIED LATER AS P ER THE RATIO LAID DOWN IN THE CASE OF AREVA T. & D. INDIA VS. CIT; 294 ITR 233 MAD. CONSI DERING THE ABOVE FACTS THE APPEAL IS DISMISSED. 6. BEFORE US THE LD. AR OF THE ASSESSEE FILED A COP Y OF THE SAID REMAND REPORT AT PAGES 1-2 OF THE PAPER BOOK AND SU BMITS THAT THE AO DID NOT ISSUE STATUTORY NOTICE U/S. 143(2) OF TH E ACT AND WITHOUT THERE BEING THE SAME THE AO CANNOT ASSUME HIS JURIS DICTION TO FRAME RE-ASSESSMENT U/S.147. HE REFERRED TO PAGE-2 OF TH E PAPER BOOK AND ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 3 ARGUED THAT IT IS CLEAR THE AO DID NOT ISSUE STATUT ORY NOTICE U/S. 143(2) OF THE ACT AND ARGUED THAT TAKING ADMISSION OF NON ISSUANCE OF NOTICE U/SEC 143(2) OF THE ACT, THE AO TAKEN REC OURSE TO SECTION 292B OF THE ACT, WHICH IS BAD UNDER LAW. HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON REPORTED IN (2010) 321 ITR 362 (S.C). IN VIEW OF ABOVE, HE PRAYED TO ALLOW THE GROUNDS OF APPEAL RAISED IN ALL THE APPEALS FILED B Y THE ASSESSEE FOR THE A.YS UNDER CONSIDERATION. 7. THE LD. DR ARGUED THAT THE JURISDICTION OF THE A O CAN BE CURED BY TAKING RECOURSE TO DEEMING FICTION U/S.292B OF T HE ACT, WHICH HAS ALREADY BEEN DISCUSSED BY THE CIT-A IN HIS ORDER AT PAGE-4. SECTION 292B OF THE ACT OVERCOMES A PROCEDURAL DEFECT IN RE GARD TO NON SERVICE OF NOTICE U/S. 143(2) OF THE ACT AND THE AO ASSUMED HIS JURISDICTION AND MADE THE ASSESSMENT U/S. 143(3)/14 7 OF THE ACT. HE SUPPORTED THE ORDERS OF THE AO AND CIT-A. IN VIEW O F ABOVE, PRAYED TO DISMISS THE GROUNDS OF APPEAL OF THE ASSESSEE IN THE APPEALS FOR THE A.YS. UNDER CONSIDERATION. 8. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD INCLUDING THE CASE LAWS AS RELIED ON BY THE ASSESSEE AND THE PAPER BOOK AS FILED BY THE ASSESSEE BEFORE US. WE F IND THAT THE AO IN HIS REMAND REPORT ADMITTED ABOUT THE NON ISSUANCE OF NOTICE U/S. 143(2) OF THE ACT. RELEVANT PORTION OF SAID REMAND REPORT IS REPRODUCED HEREIN BELOW:- GOVERNM ENT OF INDIA OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX, BANKURA CIRCLE, BANKURA BILAS BHAWAN. CHANDMARI DANGE, BANK URA. NO. ACIT/CIRCLE-2/BNK/REMAND REPORT/2010-11/137- DATED: 03/ 03/2011 TO, THE COMMISSIONER OF INCOME-TAX (APPEALS) DURGAPUR. SIR, SUB : SUBMISSION OF REMAND REPORT IN THE CASE OF M/S. LALJI & SONS FOR THE A.Y 2004-05-REG. REF : YOUR LETTER NO. CIT(A)/DGP/REMAND REPORT/201 0-11/330, DT. 28/01/2011 KINDLY REFER TO THE ABOVE. DESIRED REPORT IS AS UNDER:- ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 4 1. SUPPLY OF REASON FOR REOPENING OR ASSESSMENT : IT HAS BEEN ALLEGED THAT THE ASSESSEE MADE A REQUES T FOR SUPPLY OF REASON FOR REOPENING OF THE ASSESSMENT BUT THE SAME WAS NOT SUPPLIED TO THE ASSESSEE. IN THIS CASE SALE CONSIDERATION WAS TO BE ADOPTED AS PER THE DEEMING PROVISIONS OF SEC. 50C AS CONSIDERATION SHOWN BY THE ASSESSEE WAS LESS THAN T HE VALUE OF THE PROPERTY FOR THE PURPOSE OF PAYMENT OF 'STAMP DUTY'. THE ISSUE WAS D ISCUSSED THREADBARE WITH THE AIR OF THE ASSESSEE (SRI OM PRAKASH SHARAF). THE ISSUE OF REOPENING OF ASSESSMENT WAS ALSO COMMUNICATED TO THE A/R IN WRITING, WHICH HAS BEEN ADMITTED IN THE 'WRITTEN SUBMISSION' ON BEHALF OF THE ASSESSEE, A COPY OF WHICH HAS BEEN FORWARDED TO THIS OFFICE DESIRING A REMAND REPORT. IT IS THUS EVIDENT THAT THE ASSESSEE WAS SATISFIED WITH THE RESPONSE OF THE A.O. HAD RECORDED REASON FOR REOPENING ASSESSMENT B EEN DESIRED, THE SAME COULD HAVE BEEN SUPPLIED TO THE ASSESSEE WITHOUT DELAY. 2. REFERENCE TO THE VALUATION CELL FOR DETERMINATIO N OF FAIR MARKET VALUE : IN THIS REGARD THE ASSESSEE REQUESTED FOR A REFEREN CE TO DEPARTMENTAL VALUATION OFFICER FOR DETERMINATION OF FAIR MARKET VALUE OF THE PROPE RTY AS LATE AS ON 11.12.2009. AS THE ASSESSMENT WAS GOING TO BE BARRED BY LIMITATION ON 31.12.2009, IT WAS NOT POSSIBLE TO ENTERTAIN THE REQUEST OF THE ASSESSEE, HENCE REFERE NCE COULD NOT BE MADE TO THE VALUATION CELL. 3. ALLOWANCE OF SALARY & INTEREST TO PARTNERS AND CHARGING OF INTEREST U/S 243B : AS THESE ARE ROUTINE ASPECTS. THESE MAY BE COVERED UP WHILE GIVING APPEAL EFFECT AS PER YOUR HONOR'S DIRECTION IN THE APPELLATE ORDER. 4. NON-ISSUE OF NOTICE U/S. 143(2) : CONTENTION OF THE ASSESSEE THAT AS NOTICE U/S 143(2 ) WAS NOT ISSUED, THE ASSESSMENT IS BAD IN LAW. IN THEIR WRITTEN SUBMISSION, SOME. CAS E LAWS HAVE BEEN CITED. AS REGARDS ISSUE OF NOTICE U/S 143(2), SEC. 143(2) READS AS UN DER:- 'WHERE A RETURN HAS BEEN FURNISHED UNDER SECTION 1 39, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142, THE ASSESSING OFFIC ER SHALL ,- (I) (II) ------------------ SERVE ON THE ASSESSEE A NOT ICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICE OR T O PRODUCE, OR CAUSE, TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN-------------------------- ' FURTHER SECTION 148(1) ALSO INCLUDE THE FOLLOWING: - ' ---------------- AND THE PROVISIONS OF THE ACT SH ALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURN ISHED UNDER SECTION 139-----------' IT THUS APPEARS THAT AS THERE IS NOT MENTION OF SEC TION 148 IN THE TEXT OF SECTION 143(2), IT MIGHT NOT HAVE COME TO THE MIND OF THE A.O., WHO ISSUED NOTICE U/S 148, THAT NOTICE U/S 143(2) WAS REQUIRED TO BE ISSUED IN THE CASE OF THE ASSESSEE. SIR, BY ISSUE OF NOTICE U/S 143(2), THE ASSESSEE IS GIVEN AN OPPORTUNITY TO SUBSTANTIATE THAT INCOME DISCLOSED BY HIM IS CORRECT. IN THIS CO NTEXT, I AM ENCLOSING A COPY OF LETTER NO. 264, DT. 01/12/2009 ISSUED TO THE ASSESSEE WHIC H CLEARLY SHOWS THAT THE ASSESSEE WAS ASKED TO EXPLAIN THAT THERE WAS NO CONCEALMENT OF CAPITAL GAINS ON HIS PART. THUS SPIRIT OF ISSUE OF NOTICE U/S 143(2) IS SERVED. IN THIS REGARD IT WOULD NOT BE OUT OF PLACE TO REPRODUCE THE TEXT OF SECTION 292B, WHICH READS AS UNDER:- ' SECTION 292B : NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN F URNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT S HALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT.' THUS BY VIRTUE OF SECTION 292B OF THE IT ACT 1961, THE ASSESSMENT IS NOT BAD IN LAW ONLY BECAUSE NOTICE U/S 143(2) WAS NOT ISSUED. ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 5 9. HOWEVER, HE OPINED THAT NON ISSUANCE OF NOTICE C AN BE CURED BY TAKING RECOURSE TO SECTION 292BB OF THE ACT. HOWEVE R, WE FIND THAT THE SAID ISSUE WAS DECIDED BY THE HONBLE SUPREME C OURT IN THE CASE OF HOTEL BLUE MOON SUPRA , WHICH HELD NON-ISSUANCE OF NOTICE U/SEC 143(2) OF THE ACT IS NOT A CURABLE DEFECT . RECENTLY, THE ITAT, AGRA BENCH DECIDED THE SIMILAR ISSUE IN THE CASE OF LAXM AN DAS KHANDELWAL REPORTED IN (2017) 87 TAXMANN. COM 346 ( AGRA TRIB), WHEREIN THE TRIBUNAL DISCUSSED THE ISSUE ELABORATEL Y CONSIDERING THE VARIOUS JUDGMENTS OF HONBLE HIGH COURTS OF PUNJAB & HARYANA & ALLAHABAD. WE FIND THAT THE HONBLE HIGH COURTS OF PUNJAB & HARYANA & ALLAHABAD FOLLOWED THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON SUPRA . RELEVANT PORTION OF ORDER OF AGRA TRIBUNAL AT PARAS 6.4 TO 18 IS REPRODUCED H EREIN BELOW:- 6.4 HE HAS ALSO SUBMITTED THAT SECTION 292BB APPLI ES ONLY IN THE CASE OF IMPROPER SERVICE WRONG SERVICE AND NOT TO OBJECTION NOT TAKE N BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. SECTION 292BB DOES NOT SAVE THE DEFECT OF NON-ISSUE OF NOTICE U/S 143(2). HE HAS RELIED ON CIT V. CEBON INDIA LTD. [2012] 347 ITR 583/184 TAXMAN 290 (PUNJ. & HAR ), WHEREIN, IT IS HELD THAT A CONCURRENT FINDING HA D BEEN RECORDED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL ON THE QUES TION OF DATE OF SERVICE OF NOTICE. THE NOTICE WAS NOT SERVED WITHIN THE STIPULATED TIM E. MERE GIVING OF DISPATCH NO. WOULD NOT RENDER THE FINDING PERVERSE. IN THE ABSENCE OF NOTICE BEING SERVED, THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE ASSESSMENT. ABS ENCE OF NOTICE WAS NOT CURABLE U/S 292BB OF THE ACT. 6.5 HE FURTHER RELIED ON THE DECISION IN THE CASE O F ASSTT. CIT V. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY [2015] 379 ITR 14 (ALL), WHER E, IT IS HELD THAT SINCE THE ASSESSING OFFICER FAILED TO ISSUE NOTICE WITHIN THE SPECIFIED PERIOD U/S 143(2) OF THE ACT, THE ASSESSING OFFICER HAD NO JURISDICTION TO ASSUME JUR ISDICTION U/S 143(2) OF THE ACT AND THIS DEFECT COULD NOT BE CURED BY RECOURSE TO THE DEEMIN G FICTION PROVIDED U/S 292BB OF THE ACT. 6.6 THE ID COUNSEL FOR THE ASSESSEE CONTENDED THAT THE PROVISIONS OF SECTION 292BB ARE NOT APPLICABLE IN THIS CASE BECAUSE THE SAID PROVIS IONS TAKE CARE OF IMPROPER SERVICE OF NOTICE AND DO NOT PERTAIN TO NON-ISSUANCE OF NOTICE , WHEREAS IN THIS CASE, THE ISSUE INVOLVED IS NON-ISSUE OF NOTICE U/S 143(2). THE FAC T OF NON-ISSUE OF NOTICE IS NOT IN DISPUTE, NEITHER AT THE FIRST APPEAL STAGE NOR BEFO RE THE TRIBUNAL. THE DEPARTMENT IS NOT IN APPEAL ON THIS ISSUE BEFORE THE TRIBUNAL. NON-IS SUE OF NOTICE U/S 143(2) IS NOT A CURABLE DEFECT, AS HELD IN THE CASE OF HOTEL BLUE M OON (SUPRA) (APB, PAGE NO. 1-5). NON- ISSUE OF NOTICE U/S 143(2) CANNOT BE SAVED BY THE P ROVISIONS OF SECTION 292BB, AS HELD IN CEBON INDIA LTD. (SUPRA) (APB, PAGE NO. 11-12) AND GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY (SUPRA) (APB, PAGE NO. 16-21) . HE SUBMITTED THE CASE LAWS RELIED UPON BY ID. DR ARE DISTINGUISHABLE ON FACTS. 6.7 HE FURTHER EXPLAINED THAT ALTHOUGH THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF 'HOTEL BLUE MOON' (SUPRA) IS IN RELATION TO ASSESSMENT COMPLETED U/S 158BC, HOLDING THAT THE NON-ISSUE OF NOTICE U/S 143(2) IS NOT CURABLE, THE REQUIREMENT OF ISSUE OF NOTICE U/S 143(2) OF THE ACT IS EMBODIED IN THE PROVISIONS OF SECTION 143(3) OF THE ACT ALSO. THEREFORE, THE ISSUE INVOLVED IN THE APPEAL U NDER CONSIDERATION IS COVERED BY THE DECISION IN THE CASE OF 'HOTEL BLUE MOON' (SUPRA) A ND RATIO INVOLVED IN THIS DECISION WILL APPLY TO THE PRESENT APPEAL ALSO.HE ALSO RELIED ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. GITSONS ENGG. CO. [2015] 370 ITR 87/53 TAXMANN.COM 108 WHERE THE DECISION IN THE CASE OF 'HOTEL BLUE MOON ' (SUPRA) IS FOLLOWED HOLDING THAT: 'PROVISION OF SECTION 143(2) MAKES IT CLEAR THAT SE RVICE OF NOTICE U/S 143(2) WITHIN TIME LIMIT PRESCRIBED IS MANDATORY AND IT IS NOT A MERE PROCEDURAL REQUIREMENT. THEREFORE, THE REQUIREMENT OF NOTICE U/S 143(2) CANNOT BE DISPENSE D WITH (APB, AGE NO. 22).' ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 6 6.8 IN THE CASE OF 'CIT V. GUJARAT FIOILS LTD. ' [2 015] 377 ITR 324/[2017] 79 TAXMANN.COM 354 (GUJ.) ALSO IT WAS HELD THAT: '. THE TRIBUNAL HAS HELD THE ASSESSMENT ORDER U /S 143(3) AS VOID AB INITIO BY OBSERVING THAT THE NOTICE U/S 143(2) WAS ISSUED BEY OND THE PERIOD OF LIMITATION, I.E. BEYOND THE PERIOD OF TWELVE MONTHS OR THE END OF TH E MONTH FOR WHICH THERE TURN WAS FILED U/S 139 WAS CONCERNED, IT IS REQUIRED TO BE N OTED THAT THE RETURN WAS FILED BY THE ASSESSEE ON 31.12.1999, AND NOTICE U1S 143(2) WAS S ERVED UPON THE ASSESSEE ON 25.08.2001, UNDER THOSE CIRCUMSTANCES, THE NOTICE W AS ISSUED BEYOND THE PERIOD OF ONE YEAR.' (HEAD NOTE, APB, PAGE NO. 24) 7. PER CONTRA, THE LD. DR, VEHEMENTLY SUPPORTED THE IMPUGNED ORDER, RELAYING ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF 'ASHOK CHADDHA V. ITO' [2011] 337 ITR 399/[2012] 20 TAXMANN.COM 387. THE ID DR CONTEN DED THAT THE ASSESSMENT BEING COMPLETED UNDER SECTION 153A, THERE IS NO REQUIREME NT OF ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT. HE SUBMITS THAT IN ANY CASE, THE RE IS NO PRESCRIBED PROFORMA FOR ISSUING THE NOTICE. THE NOTICE IS ACTUALLY ISSUED I N THE PROFORMA MARKED AS 'ITNS-33' WHICH IS A NON-STATUTORY NOTICE AS THE NAME SUGGEST . IT IS A COMMUNICATION BY THE ASSESSING OFFICER TO THE ASSESSEE GIVING HIM THE OP PORTUNITY AS REQUIRED UNDER SECTION 143(2). THEREFORE, ONCE THE ASSESSEE HAS BEEN PUT T O NOTICE AND GIVEN OPPORTUNITY TO ATTEND THE OFFICE, THE REQUIREMENT OF SECTION 143(2 ) IS COMPLETE, WHETHER NOTICE IS ISSUED IN PROFOMA 'ITNS-33', OR IN ANY OTHER FORMAT. IN TH E PRESENT CASE, THE ASSESSING OFFICER HAD COMMUNICATED HIS INTENTION TO SCRUTINIZE THE RE TURN BY WAY OF TWO LETTERS AND AFFORDED OPPORTUNITY TO THE ASSESSEE TO PRODUCE NEC ESSARY ACCOUNTS, DOCUMENTS OR EVIDENCE. THEREFORE, THE REQUIREMENT, IF ANY, OF SE CTION 143(2) HAS BEEN SATISFIED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON RELE VANT FACTS BROUGHT ON RECORDS AND THE PAPER BOOK AND SYNOPSIS FILED BY THE ASSESSEE. THE FACT OF NON-ISSUE OF NOTICE IS NOT IN DISPUTE NEITHER AT THE FIRST APPEAL STAGE, NOR B EFORE THE TRIBUNAL. THE DEPARTMENT IS NOT IN APPEAL ON THIS ISSUE BEFORE US. 9. IT IS NOTED THAT IN THIS CASE, A SEARCH U/S 132 OF THE I. T. ACT, 1961 WAS CONDUCTED FROM 11.03.2010 TO 12.03.20 I 0 AS IS VERIFIABLE FR OM THE COPY OF PANCHNAMA, WHICH IS PLACED AT PAGE 33-35 OF PAPER BOOK (RELEVANT PAGE 3 5), ALTHOUGH, THE AO HAS MENTIONED THE DATE OF SEARCH AS 11.03.2011 AT PAGE 1 OF THE ASSESSMENT ORDER. MEANING THEREBY, THAT THE SEARCH WAS CONDUCTED FROM 11.03.2 0 I 0 TO 12.03.2010, I.E., DURING FINANCIAL YEAR 2009-10, RELEVANT TO ASSESSMENT YEAR 2010-11. 10. IN PURSUANCE OF THE SEARCH, NOTICES 153A(L )(A) , WERE TO BE ISSUED TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS AS REFERRED TO IN CLAUSE (B), MEANING THEREBY , THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED. AS THE SEARCH IN THIS CASE, W AS CONDUCTED FROM 11.03.2010 TO 12.03.2010, I.E., DURING THE PREVIOUS YEAR 2009-10 RELEVANT TO ASSESSMENT YEAR 2010- 11, THE SIX PRECEDING YEARS WERE 2003-04, 2004-05,2 005-06,2006-07,2007-08 AND 2008-09 RELEVANT TO ASSESSMENT YEAR 2004-05, 2005-0 6,2006-07,2007-08,2008-09 AND 2009-10, FOR THE PURPOSE OF ISSUE OF NOTICE U/S 153 A(L)(A) OF THE ACT. 11. WE FIND THAT THE YEAR UNDER CONSIDERATION BEING THE SEARCH YEAR, NOTICE U/S 153A WAS NEITHER REQUIRED TO BE ISSUED, NOR WAS ISSUED I N THE CASE OF THE ASSESSEE. THE RETURN OF INCOME WAS FURNISHED ON 24.08.20 11, AS PER THE PROVISIONS OF SECTION 139 OF THE ACT. THE ASSESSMENT FOR THE PREVIOUS YEAR (FINANCIAL YEA R) 2009-10 RELEVANT TO ASSESSMENT YEAR 2010-11 WAS COMPLETED U/S 143(3) OF THE ACT, V IDE ASSESSMENT ORDER DATED 23.12.2011 UNDER THE REGULAR ASSESSMENT PROCEDURE, AS THE AO NOTED THE SECTION 143(3) UNDER WHICH THE ASSESSMENT ORDER IS COMPLETE D, AT PAGE 1 OF HIS ORDER. NON- ISSUE OF NOTICE U/S 143(2) PRIOR TO COMPLETION OF A SSESSMENT IS NOT A CURABLE DEFECT AS HELD BY THE APEX COURT IN THE CASE OF 'HOTEL BLUE M OON' (SUPRA). 12. THE LD. CIT (A) HAS DISMISSED THE LEGAL GROUND OBSERVING THAT THE ASSESSEE DID NOT OBJECT TO THE FACT OF NON ISSUE OF NOTICE U/S 143(2 ) DURING THE ASSESSMENT PROCEEDINGS AND THAT THEREFORE, IN VIEW OF THE PROVISIONS OF SE CTION 292BB OF THE ACT, THE ASSESSEE IS PRECLUDED FROM TAKING THE GROUND REGARDING NON ISSU E OF NOTICE U/S 143(2) AT THE APPEAL STAGE. THE CIT (A) HAS, THUS, ACCEPTED THE FACT OF NON ISSUE OF NOTICE U/S 143(2) AND ITS IMPACT ON THE ASSESSMENT PROCEEDINGS, CONSIDERING I T AS A MANDATORY REQUIREMENT. 13. THE AO HAD ISSUED NOTICES U/S 142(1) ON 18.11.2 011 AND 12.12.2011, AS MENTIONED IN THE FIRST PARA AT PAGE 2 OF THE ASSESSMENT ORDER AND AS SUCH NO NOTICE U/S 143(2) WAS ISSUED. THE LD. OR ARGUED THAT ONCE THE ASSESSEE HA S BEEN PUT TO NOTICE AND HAS BEEN GIVEN OPPORTUNITY OF BEING HEARD, THE REQUIREMENT O F SECTION 143(2) IS COMPLETE, WHETHER THE NOTICES ARE ISSUED IN PERFORMA ITNS 33, OR IN ANY OTHER FORMAT. IN COUNTER ARGUMENT, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE PURPOSE OF ISSUE OF NOTICE U/S 142(1) (FORMAT ITNS 32) AND NOTICE U/S 143(2) ( FORMAT ITNS 33) ARE DIFFERENT, AS PROVIDED IN THE SECTION ITSELF. WHEN BOTH THE NOTIC ES ARE MEANT FOR DIFFERENT PURPOSES, ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 7 THEN HOW ONE CANNOT BE REPLACED BY ANOTHER. NOTICE U/S 142(1) MAY BE ISSUED EVEN PRIOR TO FILING THE RETURN OF INCOME, WHEREAS NOTIC E U/S 143(2) CAN BE ISSUED ONLY AFTER FILING OF THE RETURN OF INCOME. THE PURPOSES OF ISS UE OF THE NOTICES UNDER DIFFERENT SECTIONS, I.E., SECTIONS 142(1) AND 143(2) ARE DIFF ERENT, AS EXPLAINED IN THE CASE OF ORISSA RURAL HOUSING DEVELOPMENT CORPN. LTD. V. ASS TT. CIT [2012] 343 ITR 316/204 TAXMAN 673117 TAXMANN.COM 1 G6 (ORISSA) . 14. THE STATUTORY PROVISIONS FOR ISSUE OF NOTICE U/ S 143(2) ARE GIVEN IN SUB-SECTION (3) OF SECTION 143 OF THE ACT, WHICH IS BEING REPRODUCED H EREUNDER: '143(3) - ON THE DAY SPECIFIED IN THE NOTICE ISSUED IN THE SUB-SECTION (2) OR AS SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE A S THE ASSESSEE MAY PRODUCE AND SUCH OTHER EVIDENCE AS THE ASSESSING OFFICER MAY RE QUIRE ON SPECIFIED POINTS AND AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED, THE ASSESSING OFFICER SHALL, BY AN ORDER INVITING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE, AND DETERMINE THE SUM PAYABLE BY HIM OR R EFUND OF ANY AMOUNT DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT.' THEREFORE, IN VIEW OF THIS, THE PREREQUISITE CONDIT ION FOR ISSUANCE OF NOTICE U/S 143(2) PRIOR TO MAKING ASSESSMENT U/S 143(3) OF THE ACT, I S EMBODIED IN THE PROVISIONS OF SECTIONS 143(3) AND 158BC OF THE ACT. 15. THE DECISION OF THE HON'BLE SUPREME COURT IN TH E CASE OF 'HOTEL BLUE MOON' (SUPRA) IS IN RELATION TO ASSESSMENT COMPLETED U/S 158BC, HOLD ING THAT THE NON-ISSUE OF NOTICE U/S 143(2) IS NOT CURABLE. THE REQUIREMENT OF ISSUE OF NOTICE U/S 143(2) OF THE ACT IS EMBODIED IN THE PROVISIONS OF SECTION 143(3) OF THE ACT ITSELF. THEREFORE, THE ISSUE INVOLVED IN THE IMPUGNED APPEAL UNDER CONSIDERATION IS COVERED BY THE DECISION IN THE CASE OF 'HOTEL BLUE MOON' (SUPRA) AND RATIO INVOLVE D IN THIS DECISION WILL APPLY TO THE PRESENT APPEAL ALSO. IN THE CASE OF 'HOTEL BLUE MOO N' (SUPRA) IT WAS HELD THAT IF THE ASSESSING OFFICER, FOR ANY REASON, REPUDIATES THE R ETURN FILED BY AN ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 158BC(A) OF THE ACT REL ATING TO A BLOCK ASSESSMENT, THE ASSESSING OFFICER MUST NECESSARILY ISSUE A NOTICE U NDER 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 ISSUE OF NOTICE MANDATORY, SECTION 158BC, DEALI NG WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOUNDATION FOR ASSUMPTION OF J URISDICTION; THAT SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCOME AND THAT THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANN OT BE DISPENSED WITH. 16. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF GI TSONS ENGINEERING CO. (SUPRA) FOLLOWING THE DECISION IN THE CASE OF 'HOTEL BLUE M OON' (SUPRA) HAS HELD AS UNDER: - 'PROVISION OF SECTION 143(2) MAKES IT CLEAR THAT SE RVICE OF NOTICE U/S 143(2) WITHIN TIME LIMIT PRESCRIBED IS MANDATORY AND IT IS NOT A MERE PROCEDURAL REQUIREMENT. THEREFORE, THE REQUIREMENT OF NOTICE U/S 143(2) CANNOT BE DISPENSE D WITH.' (APB, PAGE 22) 17. IN CONCLUSION, WE FIND THAT THERE WAS NO NOTICE ISSUED U/S 143(2) PRIOR TO THE COMPLETION OF ASSESSMENT UNDER SECTION 143(3) OF TH E ACT BY THE AO; THAT THE YEAR UNDER CONSIDERATION WAS BEYOND THE SCOPE OF THE PRO VISIONS OF SECTION 153A OF THE ACT, IT BEING THE SEARCH YEAR AND NOT COVERED IN THE SIX YE AR TO THE YEAR OF SEARCH AS PER THE ASSESSMENT SCHEME/PROCEDURE DEFINED U/S 153A; THAT THE AO HAS PASSED REGULAR ASSESSMENT U/S 143(3) OF THE ACT; ALTHOUGH THE LD C IT HAS MENTIONED THE SECTION AS 143 R.W.S 153A AND THAT THE DEPARTMENT HAD NOT CONTROVE RTED THESE FACTS AT THE STAGE OF HEARING. IT IS NOTED THAT ISSUE OF NOTICE U/S 143(2 ) FOR COMPLETION OF REGULAR ASSESSMENT IN THE CASE OF THE ASSESSEE WAS A STATUTORY REQUIRE MENT AS PER THE PROVISIONS OF THE ACT AND NON-ISSUANCE THEREOF IS NOT A CURABLE DEFECT. E VEN IN CASE OF BLOCK ASSESSMENT U/S 158BC, IT HAS BEEN SO HELD BY THE APEX COURT IN THE CASE OF 'HOLE! BLUE MOON' (SUPRA). 18. CONSIDERING THE FACTS, AS DISCUSSED ABOVE, WE N OTE THAT THE ASSESSMENT ORDER IS PASSES WITHOUT ISSUE OF NOTICE U/S 143(3) OF THE AC T AND THIS DEFECT CANNOT BE CURED BY TAKING RECOURSE TO THE PROVISIONS OF SECTION 292BB OF THE ACT. 10. RESPECTFULLY FOLLOWING THE ABOVE, WE ARE OF TH E VIEW THAT THE IMPUGNED ASSESSMENT PASSED U/S. 143(3)/147 OF THE A CT DT. 18-12- 09 IS BAD IN LAW AND THE ORDER OF CIT-A IS NOT JUST IFIED IN CONFIRMING THE SAME. GROUNDS RAISED BY THE ASSESSEE IN APPEAL S ITA NO. 220/KOL/2016, ITA NO. 221/KOL/2016 AND ITA NO. 222/ KOL/2016 FILED ITA NOS. 220-222/KOL/2016 M/S.LALJI & SONS. 8 BY THE ASSESSEE FOR THE A.YS 2003-04, 04-05 AND 05 -06 UNDER CONSIDERATION ARE ALLOWED. 11. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-01-2018 SD/- SD/- M. BALAGANESH S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25-01-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APP ELLANT/ASSESSEE : M/S. LALJI & SONS, NUTANGANJ, P.O & DIST: BANKURA, PIN 722101. 2 RESPONDENT/REVENUE : THE ACIT, BILASH BHAWAN, CHAND MARIDANGA, P.O & DIST: BANKURA, PIN 722101. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA