BATRA DEVELOPMENTS, MUMBAI V. ITO 17(1)(3), MUMBAI

ITA 2253/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49333 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: G P MEHTA
• Keywords: Procedural lapse
• Section: 142(1)

Judgement Text

1 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI D. K. AGARWAL, J.M. AND SHRI R.K. PANDA , A.M. ITA NO.2253/MUM/2010 ASSESSMENT YEAR : 2006-07 M/S. BATRA DEVELOPERS C/O. G. P. MEHTA & CO. CAS, 807, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI-400 021 PAN NO: AADFB 5802 G VS. THE INCOME TAX OFFICER,17(1)(3) C-10, 7 TH FLOOR, PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. P. MEHTA RESPONDENT BY : SHRI A. K. NAYAK O R D E R PER R.K. PANDA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.01.2010 PASSED BY THE CIT(A)-29, MUMBAI RELATING TO ASSESSMENT YEAR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS ENGAGED IN THE BUSINESS OF SLUM DEVELOPERS AND FILED ITS RETURN OF INCOME ON 12.07.2007 DECLARING LOSS OF RS.4,96,390/-. THE AO ISSUED NOTI CE U/S. 143(2) AND 142(1) WHICH WAS SERVED ON THE ASSESSEE ON 05.08.2008. IN RESPONSE TO SUCH NOTICE, THE ASSESSEE FILED CERTAIN DETAILS BUT DID NOT FILE THE LOAN CONFIRMATIONS OF NEW LOAN AMOUNTING TO RS.14 LAKHS. IN ABSENCE OF SU CH COMPLIANCE TILL THE DATE OF ASSESSMENT, THE AO COMPLETED THE ASSESSMENT U/S.144 OF THE INCOME 2 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS TAX ACT AND MADE AN ADDITION OF RS.14 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE AS UNPROVED LOANS. 3. BEFORE THE LD. CIT(A), THE ASSESSEE CHALLENGED T HE ASSESSMENT ON THE GROUND THAT THE NOTICE ISSUED IS VOID AB INITIO, SI NCE IT WAS NOT SERVED WITHIN A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILLED. SO FAR AS THE ADDITION OF RS.14 LAKHS IS CO NCERNED, IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED THE CONFIRMATION LETTER S BUT THESE WERE NOT CONSIDERED BY THE AO. THE ASSESSEE FILED CONFIRMATI ONS FROM MOKSHADA BATRA RS.2,00,000/- AND MANIKA BATRA RS.2,00,000/-. 4. HOWEVER THE LD. CIT(A) WAS ALSO NOT CONVINCED WI TH THE ARGUMENTS ADVANCED BY THE ASSESSEE. HE HELD THAT IN VIEW OF T HE AMENDMENT TO PROVISION OF SECTION 143(2) BY THE FINANCE ACT, 200 8 W.E.F 01.04.2008, THE AO CAN ISSUE NOTICE U/S.143(2) WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE FINANCIAL YEAR. SINCE THE AO IN THE INSTANT CAS E HAS ISSUED THE NOTICE WITHIN THE PERIOD OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR, THEREFORE, THE SAME IS WITHIN STIPULATED TIME PERIOD. SO FAR A S THE ADDITION ON MERIT IS CONCERNED, HE UPHELD THE ACTION OF THE AO SINCE NO CONFIRMATIONS WERE FILED BEFORE THE AO AND FULL DETAILS WERE NOT FILED BEFOR E HIM DESPITE SUFFICIENT OPPORTUNITY GIVEN. HE ACCORDINGLY, DISMISSED THE AP PEAL FILED BY THE ASSESSEE. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS :- 1. THE ORDERS PASSED BY THE LEARNED LOWER AUTHORIT IES ARE BAD IN LAW AND BAD IN FACTS. 2. THE ASSESSMENT ORDER PASSED IS AB-INITIO VOID, I NASMUCH AS, NO NOTICE U/S.143(2) OF THE I.T. ACT, 1961 WAS SERVED WITHIN THE STIPULATED TIME PERIOD, VIDE PROVISO TO SEC.143 (2) OF THE I.T. ACT, 1961. 3 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS 3. THE LEARNED CIT(A) LOWER AUTHORITIES HAVE GROSSL Y ERRED IN MAKING AN ADDITION OF RS.14,00,000/- ON ACCOUNT OF UNPROVED LOANS. THE REASONS ASSIGNED FOR THE IMPUGNED ADDITI ONS ARE WRONG AND CONTRARY TO THE EVIDENCE ON RECORD. 4. THE APPELLANT MAY PLEASE BE PERMITTED TO RAISE A NY ADDITIONAL OR ALTERNATIVE GROUND ON OR BEFORE THE H EARING OF APPEAL. 6. THE GROUND APPEALS NO. 1 & 4 BEING GENERAL IN NA TURE ARE DISMISSED. 7. THE GROUND APPEAL NO. 3 WAS NOT PRESSED BY THE L D. COUNSEL FOR THE ASSESSEEE FOR WHICH THE LD. DR HAS NO OBJECTION. AC CORDINGLY, THE SAME IS DISMISSED. 8. SO FAR AS THE GROUND NO. 2 IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BE FORE THE LD. CIT(A). HE SUBMITTED THAT THE NOTICE U/S. 143(2) DATED 29.07.2 008 WAS SERVED ON THE ASSESSEE ON 05.08.2008. SINCE THE ASSESSEE HAS FILE D THE RETURN OF INCOME ON 12.07.2007, THEREFORE, THE NOTICE U/S.143(2) SERVED ON THE ASSESSEE BEING BEYOND THE STATUTORY PERIOD OF 12 MONTHS FROM THE E ND OF THE MONTH IN WHICH THE RETURN WAS FILED, THEREFORE, THE NOTICE I TSELF IS INVALID. REFERRING TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF ACIT VS. HOTEL BLUE MOON REPORTED IN 321 ITR 362, HE SUBMITTED THAT THE OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U/S.143(2) CANNOT BE A MERE PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE . THEREFORE, IF THE NOTICE IS NOT SERVED ON THE ASSESSEE WITHIN THE STIPULATED TI ME PERIOD, THE ASSESSMENT PROCEEDINGS WILL BECOME VOID AB INITIO. REFERRING T O THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CEBON INDIA LTD. REPORTED IN 184 TAXMAN 290, HE SUBMITTED THAT IF TH E NOTICE IS NOT SERVED WITHIN THE STIPULATED TIME PERIOD, MERE GIVING OF D ISPATCH NUMBER WOULD NOT CURE THE DEFECT. THEREFORE, THE ASSESSMENT WAS TREA TED AS VOID. REFERRING TO THE DECISION OF DELHI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF KUBER 4 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS TOBACCO PRODUCTS P. LTD. VS. DCIT REPORTED IN 310 I TR (AT) 300, HE SUBMITTED THAT THE EFFECT OF SECTION 292BB INSERTED W.E.F 01.04.2008, IS PROSPECTIVE AND NOT RETROSPECTIVE. IT IS APPLICABL E TO A.Y. 2008-09 AND SUBSEQUENT YEARS. HE ACCORDINGLY SUBMITTED THAT THE ORDER HAS TO BE TREATED AS VOID AB INITIO, SINCE THE STATUTORY NOTICE U/S. 143(2) WAS SERVED ON THE ASSESSEE BEYOND THE STIPULATED PERIOD. 9. THE LD. DR ON THE OTHER HAND, STRONGLY SUPPORTE D THE ORDER OF THE LD. CIT(A). HE SUBMITTED THAT THE RETURN WAS FILED DURI NG THE FINANCIAL YEAR 2007-08, THEREFORE, DUE TO THE AMENDMENT OF PROVISI ON OF SECTION 143(2) W.E.F. 01.04.2008, THE AO HAD TIME UPTO 30.09.2008 FOR ISSUE OF NOTICE U/S.143(2). SINCE THE NOTICE U/S. 143(2) WAS DULY S ERVED ON THE ASSESSEE ON 05.08.2008, THEREFORE, SUCH NOTICE IS WITHIN THE ST ATUTORY PERIOD. THEREFORE, THE ASSESSMENT ORDER IS NOT VOID AB INITIO. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE B Y BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE LD. CIT(A) AND THE PAPER BOOK FILED BEFORE US. WE HAVE ALSO CONSIDERED THE VARIOUS DECI SIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 12.07.2007 AND THE NOTICE U/S. 143(2) DATED 29.07.2 008 WAS SERVED ON THE ASSESSEE ON 05.08.2008. IT IS THE SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE THAT THE NOTICE U/S. 143(2) WAS NOT SERVED WITHIN A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETUR N WAS FILED FOR WHICH THE NOTICE IS TIME BARRED AND, THEREFORE, THE ASSES SMENT IS VOID. IT IS THE SUBMISSION OF THE LD. DR THAT IN VIEW OF THE AMENDM ENT TO PROVISION OF SECTION 143(2) W.E.F 01.04.2008, THE NOTICE U/S. 14 3(2) CAN BE ISSUED WITHIN 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHIC H SUCH RETURN WAS FILED. 11. IN OUR OPINION, SINCE THE RETURN WAS FILED DURI NG THE F.Y. 2007-08, THEREFORE, IN VIEW OF THE AMENDMENT TO PROVISION OF SECTION 143(2) BY THE FINANCE ACT, 2008 W.E.F. FROM 01.04.2008 SUCH NOTIC E CAN BE ISSUED WITHIN A 5 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS PERIOD OF 6 MONTHS FROM THE END OF THE FINANCIAL YE AR IN WHICH SUCH RETURN WAS FILED. SINCE THE RETURN IS FILED ON 12.07.2007, IT FALLS DURING THE F.Y. 2007-08. THEREFORE, THE TIME LIMIT FOR ISSUE OF NOT ICE U/S.143(2) IN THE INSTANT CASE IS 30.09.2008 I.E. WITHIN 6 MONTHS FRO M THE END OF THE FINANCIAL YEAR. SINCE THE NOTICE U/S. 143(2) WAS SERVED ON TH E ASSESSEE ON 05.08.2008, THEREFORE, THE SAME IS WITHIN THE STATUTORY PERIOD. THEREFORE, THE ASSESSMENT ORDER IN OUR OPINION IS A VALID ASSESSMENT. 12. SO FAR AS THE VARIOUS DECISIONS CITED BY THE LD . COUNSEL FOR THE ASSESSEE ARE CONCERNED, WE FIND THE SAME ARE NOT AP PLICABLE TO THE FACT OF THE PRESENT CASE. THERE IS NO DISPUTE TO THE PROPOSITIO N THAT AN ASSESSMENT ORDER IS VOID AB INITIO IF THE NOTICE U/S.143(2) IS NOT SERVED ON THE ASSESSEE WITHIN THE STIPULATED TIME PERIOD. SINCE IN THE INS TANT CASE WE HAVE ALREADY HELD THAT THE NOTICE U/S.143(2) HAS BEEN SERVED ON THE ASSESSEE WITHIN THE STIPULATED PERIOD OF 6 MONTHS FROM THE END OF THE F INANCIAL YEAR IN WHICH THE RETURN WAS FILED, THEREFORE, THE VARIOUS DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER, GROUNDS APPEAL NO. 2 IS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 24 TH DAY OF JUNE, 2011. SD/- ( D. K. AGARWAL ) JUDICIAL MEMBER SD/- (R.K. PANDA) ACCOUNTANT MEMBER MUMBAI, DATED : 24/06/2011 6 ITA NO.2253/MUM/2010 M/S. BATRA DEVELOPERS COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, G - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI