Shri Prahladbhai Prabhudas Patel, Ahmedabad V. The Income tax Officer,Ward-6(5), Ahmedabad

ITA 2215/AHD/2009

• Counselvise Citation: 221520514 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S A BOHRA
• Assessee Lawyers: V C TANNA
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Assessment record
• Section: 143(3); 142(1); 68

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'SMC' BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER ITA NO.2215/AHD/2009 (ASSESSMENT YEAR:-2005-06) PRAHLADBHAI PRABHUDAS PATEL, 15-B, VIDHATA PARK, RANNA PARK, GHATLODIA, AHMEDABAD V/S THE INCOME-TAX OFFICER, WARD-6(5), AHMEDABAD PAN: AIBPP 6163 E [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI V C TANNA, AR RESPONDENT BY:- SHRI S A BOHRA, SR. DR DATE OF HEARING:- 21-09-2011 DATE OF PRONOUNCEMENT:- 26-09-2011 O R D E R THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XI, AHMEDABAD [THE CIT(A)] D ATED 17- 04-2009. 2 THE LEARNED AR MR. V C TANNA HAS STATED AT THE OU TSET THAT A LEGAL GROUND THROUGH WHICH LEGALITY OF THE IMPUGN ED ASSESSMENT ORDER HAS BEEN CHALLENGED HAS TO BE DECI DED FIRST, REPRODUCED HEREUNDER:- [1.1] IN THE FACTS AND CIRCUMSTANCES OF T HE CASE AS WELL AS IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XI, AHMEDABAD GROSSLY ERRED IN CONFIRMING THE ASSESSMENT ORDER U/S. 143(3) DATED 26/12/2007 DISREGARDING THE FACT THAT NO NOTICE U/S. 143(2) OF THE ACT WAS SERVED UPON THE APPELLANT ASSESSEE WITHIN ONE Y EAR FROM 2 ITA NO.2215/AHD/2009 THE END OF THE MONTH IN WHICH THE RETURN OF INCOME FOR THE YEAR UNDER APPEAL WAS FILED. [1.2] THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-XI, AHMEDABAD GROSSLY ERRED IN NOT APPRECIATING THE FAC T THAT IN AS MUCH AS THE RETURN OF INCOME FOR THE YEAR UNDER APPEAL WAS FILED ON 17/08/2005, AS PER THE PROVISO TO SECTION 143(2) THE ASSESSING OFFICER OUGHT TO HAVE ISSUED AND SERVED U PON THE APPELLANT ASSESSEE A NOTICE U/S. 143(2) ON OR BEFOR E 31/08/2006, WHEREAS AS PER PARA 2 OF THE IMPUGNED ASSESSMENT ORDER, THE FIRST STATUTORY NOTICE U/S. 143(2) WAS ISSUED ON 18/01/2007 WHICH WAS NOT SERVED UPON THE ASSESSEE. [1.3] THE APPELLANT SAYS THAT THE IMPUGNED ASSESSME NT ORDER WHICH HAD BEEN PASSED PURSUANT TO A NOTICE U/S. 143(2) WH ICH WAS ISSUED AFTER LAPSE OF MORE THAN ONE YEAR FROM THE E ND OF THE MONTH IN WHICH THE RETURN OF INCOME WAS FILED IS IL LEGAL AND BAD IN LAW AND THE SAME MAY THEREFORE PLEASE BE CANCELL ED. 3 AN ASSESSMENT WAS MADE U/S 143(3) OF THE INCOME-T AX ACT, 1961 [THE ACT FOR SHORT] DATED 26-12-2007 FOR ASS ESSMENT YEAR (AY) 2005-06. THE LEARNED AR HAS ALLEGED THAT NOTICES U/S 143(2) AND 142(1) WERE FOR THE FIRST TIME ISSUED ON 18-01-2007 FIXING THE HEARING ON 13-02-2007. IT HAS ALSO BEEN INFORMED THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 17-08-2005 DECLARING TOTAL INCOME OF RS.27,480/- AND AGRICULTU RAL INCOME OF RS.1,24,490/-. WITH THIS FACTUAL BACKGROUND, IT IS ARGUED THAT THE NOTICE U/S 143(2) SHOULD HAVE BEEN ISSUED ON OR BEFORE 31-08- 2006. HOWEVER, THE NOTICE WAS ISSUED BELATEDLY ON 1 8-01-2007. THE LEARNED AR HAS PLEADED THAT THE REQUIREMENT OF LAW IS THAT A NOTICE U/S 143(2) SHOULD HAVE BEEN ISSUED WITHIN 12 MONTHS BUT THE NOTICE IN THE CASE OF THE ASSESSEE WAS ISSUED A FTER THE LAPSE OF MORE THAN ONE YEAR FROM THE END OF THE MONTH IN WHI CH THE RETURN OF INCOME WAS FILED. HE HAS, THEREFORE, CONCLUDED T HAT THE ENTIRE ASSESSMENT PROCEEDINGS WERE ILLEGAL AND THE ORDER D ESERVES TO BE DISMISSED. 4 FROM THE SIDE OF THE REVENUE, THE LEARNED DR MR. S A BOHRA HAS OBJECTED THE RAISING OF THIS GROUND FOR T HE FIRST TIME BEFORE THE TRIBUNAL. THE LEARNED DR HAS INFORMED TH AT AS PER FORM NO.35, I.E., APPEAL MEMO FILED BEFORE THE CIT( A), NO SUCH LEGAL GROUND WAS RAISED. THE LEARNED DR HAS INFORME D THAT A 3 ITA NO.2215/AHD/2009 GENERAL GROUND WAS RAISED WITHOUT SPECIFYING THE IM PUGNED GRIEVANCE AND DUE TO THAT REASON IN THE FIRST PARA ITSELF, THE LEARNED CIT(A) HAS DISPOSED OFF THE SAID GENERAL GR OUND WITH THE COMMENT THAT THE GROUND BEING GENERAL IN NATURE, TH US, DID NOT CALL FOR ANY SPECIFIC COMMENTS. LD. DR HAS, THEREFO RE, ARGUED THAT SINCE THE OBJECTION HAS NOT BEEN RAISED BEFORE THE REVENUE AUTHORITIES, THEREFORE, IT IS NOT JUSTIFIABLE TO RA ISE THIS LEGAL GROUND AT THIS STAGE OF SECOND APPEAL. 5 HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, I AM OF THE CONSCIENTIOUS VIEW THAT A LEGALITY OF A JUDGMENT IS CORE ISSUE WHICH GOES TO THE VERY ROOT OF THE MATTER. THOUGH I T IS TRUE THAT THIS GROUND WAS NOT SPECIFICALLY RAISED BEFORE THE FIRST APPELLATE AUTHORITY BUT AS PER THE STATEMENT OF FACTS FILED; IT EMERGES THAT THE DATES OF THE NOTICES ISSUED WERE REFERRED TO AN D IN WRITTEN SUBMISSIONS IT WAS STATED THAT NOTICE FOR SCRUTINY WAS NOT ISSUED WITHIN A STATUTORY PERIOD. IN MY HUMBLE OPINION, TH E STATUTE HAS LAID DOWN THAT FEW PRELIMINARY STEPS HAVE TO BE TAK EN BY THE AO WHEN HE HAS A RETURN BEFORE HIM SO AS TO ENABLE TO COMPLETE AN ASSESSMENT. ONE OF THE STEPS IS A LEGAL REQUIREMENT WHICH IS TO BE TAKEN BY THE OFFICER I.E. SERVICE OF NOTICE OF HEAR ING ON THE ASSESSEE. THE NOTICE SHOULD SPECIFY A DATE AND SHOU LD CALL UPON THE ASSESSEE TO ATTEND BEFORE THE OFFICER ON A SPEC IFIC DATE. THEREFORE, IT IS OBVIOUS THAT IF THE AO IS NOT INCL INED TO ACCEPT THE RETURN OR INTENDS TO MAKE AN ASSESSMENT OTHERWI SE, HE SHOULD COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE AND G IVEN THE ASSESSEE AN OPPORTUNITY OF BEING HEARD BEFORE MAKIN G SUCH ASSESSMENT. A LAW HAS BEEN LAID DOWN THAT ISSUANCE OF A NOTICE UNDER SUB-SECTION (2) OF SECTION 143 IS A MANDATORY REQUIREMENT. THE ACCEPTED JUDICIAL POSITION IS THAT ISSUANCE OF NOTICE IS NOT A MERE PROCEDURAL FORMALITY BUT A STATUTORY LEGAL REQ UIREMENT TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE WITHIN THE S PECIFIED PERIOD, HOWEVER, FAILING WHICH THE ASSESSMENT WILL BE VITIATED. SINCE THE ISSUE IS VERY MUCH LEGAL IN NATURE, THERE FORE, THIS CAN BE RAISED BEFORE THE TRIBUNAL. OTHERWISE ALSO IT CA NNOT BE DISPUTED THAT AS PER RULE 11 OF THE INCOME TAX APPE LLATE TRIBUNAL RULES, 1963 IT IS PERMITTED THAT ANY PARTY TO THE APPEAL CAN RAISE A QUESTION OF JURISDICTION WHICH GOES TO THE ROOT OF THE MATTER BUT IT DOES NOT INVOLVE FURTHER INVESTIGATIO N INTO FACTS. WHILE DECIDING THE ISSUE OF POWERS GRANTED TO THE T RIBUNAL, THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CORPORATION 229 ITR 383 ( S.C.) HAS HELD AS UNDER:- 4 ITA NO.2215/AHD/2009 UNDOUBTEDLY, THE TRIBUNAL HAS THE DISCRETION TO A LLOW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL I S ONLY REQUIRED TO CONSIDER THE QUESTION OF LAW ARISING FROM FACTS WHI CH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS, THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECES SARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABI LITY OF AN ASSESSEE. 5.1 WITH THIS LEGAL BACKGROUND, A QUESTION HAS BEEN RAISED FROM THE BENCH THAT WHETHER THE REVENUE DEPARTMENT IS PR ESENTLY HAVING THE ORIGINAL ASSESSMENT RECORD OF THE AO SO THAT RIGHT NOW THE CORRECT POSITION OF ISSUANCE OF NOTICE CAN BE V ERIFIED. BUT PRESENTLY THE ASSESSMENT RECORDS ARE NOT AVAILABLE. OTHERWISE ALSO THE FIRST APPELLATE AUTHORITY HAS NOT ADJUDICA TED UPON THIS LEGAL GROUND. I AM, THEREFORE, OF THE VIEW THAT THI S GROUND SHOULD GO BACK TO THE STAGE OF THE FIRST APPELLATE AUTHORI TY SO THAT THE LEARNED CIT(A) CAN CALL FOR A REMAND REPORT BY GRAN TING AN OPPORTUNITY TO THE REVENUE DEPARTMENT. IN THIS MANN ER HE CAN VERIFY THE IMPUGNED ALLEGATION OF THE ASSESSEE THAT WHETHER THE NOTICE U/S 143(2) WAS ISSUED FOR THE FIRST TIME ON 18.01.2007. BY RESTORING THIS LEGAL GROUND BACK TO THE LEARNED CIT (A) DEFINITELY SHALL NOT CAUSE PREJUDICE TO THE EITHER SIDE. I ORD ER ACCORDINGLY. THIS GROUND MAY BE TREATED AS ALLOWED BUT FOR STATI STICAL PURPOSE ONLY. 5.2 REST OF THE GROUNDS ARE REVOLVING AROU ND THE FACTS AND QUANTUM ADDITION MADE U/S 68 OF THE ACT BUT THE QUE STION OF JURISDICTION HAS FIRST TO BE DECIDED, HENCE, AT PRE SENT, THOSE GROUNDS ARE NOT REQUIRED TO BE ADJUDICATED UPON. 5.3 IN THE RESULT, THE APPEAL IS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. ORDER PRONOUNCED IN THE COURT TODAY ON 26-09-2011 SD/- (MUKULKUMARSHRAWAT) JUDICIAL MEMBER DATE : 26-09-2011 5 ITA NO.2215/AHD/2009 COPY OF THE ORDER FORWARDED TO: 1. PRAHLADBHAI PRABHUDAS PATEL, 15-B, VIDHATA PARK, RANNA PARK, GHATLODIA, AHMEDABAD 2. THE INCOME-TAX OFFICER, WARD-6(5), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-SMC, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD