MADAN SINGH KHANGAROT, Jaipur V. ITO, Jaipur

ITA 252/JPR/2011

• Counselvise Citation: 25223114 RSA 2011
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Period of limitation; Time period of passing order; Reason to believe
• Section: 143(3); 54B; 142(1); 54; 144; 154; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO. 252/ JP/2011 ASSESSMENT YEAR 2007-08 PAN: BTUPS 1484 C SHRI MADAN SINGH KANGAROT VS THE ITO S/O SHRI JEEVAN SINGH WARD 7(4) POST: THIKARIYA, VILL. SANJHARIA JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) ASSESSEE BY: SHRI NIKHLESH KATARIA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 03-11-2011 DATE OF PRONOUNCEMENT: 22-11-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORD ER OF THE LD. CIT(A)-III, JAIPUR DATED 24-01-2011 FOR THE ASSESSMENT YEAR 2007-08. 2.1 THE FIRST GROUND OF APPEAL WHICH CONSISTS OF TH REE SUB-PARTS IS AS UNDER:- 1.1 THE ORDER PASSED U/S 144 IS BAD IN LAW AND ON T HE FACTS OF THE PRESENT CASE AND HENCE, THE SAME MAY PLEASE BE QUAS HED 1.2 THE LD CIT(A) ALSO ERRED IN LAW AS WELL AS ON T HE FACTS OF THE PRESENT CASE IN TREATING THE RETURN FILED BY THE AS SESSEE AS NONEST THOUGH THE SAME WAS A VALID RETURN UNDER THE PROVISIONS O F INCOME TAX ACT, 1961 1.3 THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN NOT ISSUING PROPER NOTICE U/S 143(2) OF THE ACT THOUGH THE SAME WAS INCUMBENT UPON HIM. ACCORDINGLY THE ASSESSMENT. 2 2.2 THE AO RECEIVED THE INFORMATION FROM THE BANK A ND ON THAT BASIS ISSUED A NOTICE U/S 142(1) ON 16-08-07 VIDE WHICH THE ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 BY 20 TH DEC, 2007. ACCORDING TO THE AO, THE ASSESSEE DID NOT MAKE ANY COMPLIANCE OF NOTICE U/S 142(1) DA TED 16-08-07 AND HENCE NOTICE U/S 142(1) WAS ISSUED ON 5 TH OCT. 09 VIDE WHICH THE ASSESSEE WAS REQUIRED TO FI LE THE REQUISITE DETAILS BUT SUCH DETAILS REMAINED UN-COMP LIED WITH. THE AO IN HIS ORDER HAS MENTIONED THAT 05 NOTICES U/S 142(1) WERE ISSUED IN THIS CASE ON 16-08-07, 30-03-09, 5- 10-09, 26-10-09 AND 30-11-09. NO COMPLIANCE WAS MAD E IN RESPECT OF ALL THE FIVE NOTICES ISSUED BY THE AO. ACCORDING TO THE AO, THE ASSESSEE FILED THE RETURN ON 27-03-08 WHICH WAS BEYOND THE TIME ALLOWED TO HIM VIDE NOTI CE ISSUED U/S 142(1) OF THE ACT. THE RETURN WAS TREATED AS INVALID AND NONEST. SINCE THE ASSESSEE HAS NOT PROVIDED THE INFORMATION AS REQUIRED VIDE NOTICE U/S 142(1), THE REFORE, THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT. 2.3 THE LD CIT(A) WAS OF THE OPINION THAT THE ASSES SEE CANNOT EXERCISE THE OPTION U/S 139(4) BECAUSE THE ASSESSEE HAS NOT FILED THE RETUR N WITHIN TIME ALLOWED BY THE AO VIDE NOTICE DATED 16-08-07 U/S 142(1) OF THE ACT. THE LD CIT(A) THEREFORE, HELD THAT THE AO WAS JUSTIFIED IN TREATING THE RETURN AS NONEST. THE AO HAS NOT COMPLIED WITH THE NOTICES U/S 142(1) AND THEREFORE, THE AO WAS JUSTIFIED IN M AKING THE ASSESSMENT U/S 144 OF THE ACT. 2.4 DURING THE COURSE OF PROCEEDINGS BEFORE US, THE LD.AR HAS FILED THE WRITTEN SUBMISSIONS IN 11 PAGES ALONGWITH PAPER BOOK CONTAI NING 34 PAGES. THE LD.AR SUBMITTED THAT THE RETURN FILED BY THE ASSESSEE ON 27-03-08 CANNOT BE HELD AS INVALID OR NONEST. ONCE THE RETURN HAS BEEN FILED THEN THE AO CAN ISSUE NOTICE U/S142 (1), IN CASE 3 THE AO HAS REASON TO BELIEVE THAT ANY CLAIM OF LOS S/ EXEMPTION/ DEDUCTION/ ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE. SUCH NOT ICE IS TO BE GIVEN EVEN IF THE RETURN HAS BEEN FILED IN COMPLIANCE TO THE NOTICE U/S 143(1). NOTICE U/S 142(1) IS TO BE ISSUED BEFORE EXPIRY OF 06 MONTHS FROM THE END OF THE FINA NCIAL YEAR IN WHICH THE RETURN IS FURNISHED. IN THE INSTANT CASE, NO NOTICE U/S 143(2 ) HAS BEEN ISSUED. BEFORE THE AO, THE ASSESSEE SUBMITTED VIDE LETTER DATED ON 27-10-09 PE RSONALLY FILED AS PER COPY OF THE LETTER THAT PROCEEDINGS ARE BARRED BY LIMITATION AS NO NOT ICE U/S 143(2) HAS BEEN ISSUED TO THE ASSESSEE ON OR BEFORE 30-09-08. THE COPY OF THIS LE TTER IS AVAILABLE AT PAGE 7 OF THE PAPER BOOK. THE LD.AR THEREFORE, SUBMITTED THAT THE ASSES SMENT ORDER IS BAD IN LAW. ACCORDING TO THE LD.AR, THE PROVISIONS OF SECTION 142(1) ARE ESSENTIALLY RELATED TO THE ENQUIRY BEFORE ASSESSMENT. AT THE TIME OF ISSUANCE OF NOTIC E, ONE HAS TO NECESSARILY SEE AS TO WHETHER ANY ASSESSMENT CAN BE FRAMED ON THE BASIS O F SUCH NOTICES. 2.5 THE AO HAS ISSUED NOTICE U/S 142(1) ON 13-04-09 AND AT THAT RELEVANT TIME, THE AO WAS NOT IN A POSITION TO MAKE ANY ASSESSMENT AS PER TIME LIMIT AVAILABLE U/S 153 OF THE ACT. OUR ATTENTION WAS DRAWN TO THE DECISION OF DELHI BENCH IN THE CASE OF DR K.C. VERMA VS ACIT, 84 ITD 33 IN WHICH IT HAS BEEN HE LD THAT NOTICE U/S 142(1) CANNOT BE ISSUED WHEN POWER TO ASSESS IS LOST DUE TO LIMITAT ION. IN ABSENCE OF NOTICE U 143(2), THE ASSESSMENT CANNOT BE FRAMED U/S 143(3)OR 144 OF THE ACT. FOR THIS PURPOSE, THE LD.AR HAS RELIED ON THE FOLLOWING DECISIONS 1. ACIT VS. HOTEL BLUE MOON, 321 ITR 362 (SC) 2. CIT VS. PAWAN GUPTA & ORS, 318 ITR 322 (DEL) 3. CIT VS. RAJEEV SHARMA 40 DTR 129 (ALL.) 4. CIT VS. M CHELLAPPAN 281 ITR 444 (MAD.) 5. CIT VS. CEBON INDIA LTD. , 229 CTR 188 (P&H) 6. CIT VS. VISHNU & CO. (P) LTD. , 319 ITR 151 (D EL.) 4 7. RAJKUMAR CHAWLA & ORS VS. ITO, 94 ITD 1 (DEL.) (SB) 8. ACIT VS. BAIKUNTH NATH SINGHAL & ORS , 89 ITD 109 (AGRA) 9. KAMAL KISHORE MODI VS. ITO , 84 TTJ 34 (JD.) 10. MRS. C. MALATHY VS. ITO, 88 ITD 37 (CHENNAI) 11. PRAVIN BALUBHAI ZALA VS. ITO 129 TTJ 373 (MUM .) 12. DCIT VS. K.M. SUGAR MILLS LTD., 53 DTR 172 (L UCK.) 2.6 THE LD.AR FURTHER SUBMITTED THAT THE ASSESSMENT U/S 144(1)(B) CAN BE MADE IN CASE THE ASSESSEE FAILS TO COMPLY WITH ALL THE TERM S OF NOTICE ISSUED U/S 142(1) OF THE ACT. NO SUCH CONDITIONS EXIST IN THE INSTANT CASE, THE A SSESSEE HAS COMPLIED WITH SOME OF THE TERMS OF THE NOTICE. THE PART COMPLIANCE WILL PRECL UDE THE ASSESSMENT U/S 144 OF THE ACT. THE ASSESSEE HAS DULY RESPONDED TO THE NOTICE VIDE LETTER DATED 9 TH DEC. 2009. 2.7 ON THE OTHER HAND, THE LD DR SUBMITTED THAT THE AO ISSUED THE NOTICE U/S 142(1) OF THE ACT ON 16-08-07. AS PER THIS NOTICE THE ASSE SSEE WAS REQUIRED TO FILE THE RETURN OF INCOME BY 20-09-07. HENCE THE RETURN FILED ON 27-03 -08 CANNOT BE CONSIDERED THE RETURN FILED IN RESPONSE TO THE NOTICE U 142(1) OF THE AC T. THE AO IN HIS ORDER HAS CLEARLY MENTIONED THAT THE ASSESSEE HAS NOT COMPLIED WITH T HE NOTICE U/S 142(1) OF THE ACT. OUR ATTENTION WAS DRAWN TOWARDS THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PEARL MECHANICAL ENGINEERING L TD. 179 ITR 144 IN WHICH IT HAS BEEN HELD THAT IN CASE THERE IS A CLEAR FINDING THA T THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICE U/S 142(1) OF THE ACT THEN BEST JUDGMENT ASS ESSMENT U/S 144 OF THE ACT IS VALID. 2.8 WE HAVE HEARD BOTH THE PARTIES. BEFORE WE PROCE ED FURTHER, IT WILL BE USEFUL TO REPRODUCE THE RELEVANT PROVISIONS FROM THE IT. ACT. 142. ENQUIRY BEFORE ASSESSMENT.--(1) FOR THE PURPOS E OF MAKING AN ASSESSMENT UNDER THIS ACT, THE ASSESSING OFFICER MA Y SERVE ON ANY PERSON 5 WHO HAS MADE A RETURN UNDER SECTION 115WD OR SECTIO N 139 OR IN WHOSE CASE THE TIME ALLOWED UNDER SUB-SECTION (1) OF SECT ION 139 FOR FURNISHING THE RETURN HAS EXPIRED, A NOTICE REQUIRING HIM, ON A DATE TO BE THEREIN SPECIFIED,-- (I) WHERE SUCH PERSON HAS NOT MADE A RETURN WITHIN THE TIME ALLOWED UNDER SUB-SECTION (1) OF SECTION 139 3 OR BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR TO FURNISH A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSES SABLE UNDER THIS ACT, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED, OR PROVIDED THAT WHERE ANY NOTICE HAS BEEN SERVED UNDE R THIS SUB- SECTION FOR THE PURPOSES OF THIS CLAUSE AFTER THE E ND OF THE RELEVANT ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 1990 TO A PERSON WHO HAS NOT MADE A RETURN WITHIN THE TIME AL LOWED UNDER SUB- SECTION (1) OF SECTION 139 OR BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR, ANY SUCH NOTICE ISSUED TO HIM SHALL BE DEEMED TO HAVE BEEN SERVED IN ACCORDANCE WITH THE PROVISIONS OF THIS SUB-SECTI ON. (II) TO PRODUCE, OR CAUSE TO BE PRODUCED, SUCH ACCO UNTS OR DOCUMENTS AS THE ASSESSING OFFICER MAY REQUIRE, OR (III) TO FURNISH IN WRITING AND VERIFIED IN THE PRE SCRIBED MANNER INFORMATION IN SUCH FORM AND ON SUCH POINTS OR MATT ERS (INCLUDING A STATEMENT OF ALL ASSETS AND LIABILITIES OF THE ASSE SSEE, WHETHER INCLUDED IN THE ACCOUNTS OR NOT) AS THE ASSESSING OFFICER MAY R EQUIRE: PROVIDED THAT-- (A) THE PREVIOUS APPROVAL OF THE JOINT COMMISSIONER SHALL BE OBTAINED BEFORE REQUIRING THE ASSESSEE TO FURNISH A STATEMENT OF ALL ASSETS AND LIABILITIES NOT INCLUDED IN THE ACCOUNTS; (B) THE ASSESSING OFFICER SHALL NOT REQUIRE THE PRO DUCTION OF ANY ACCOUNTS RELATING TO A PERIOD MORE THAN THREE YEARS PRIOR TO THE PREVIOUS YEAR. 143 (2) WHERE A RETURN HAS BEEN FURNISHED UNDER SEC TION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, THE ASSESSING OFFICER SHALL, (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM O F LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN T HE RETURN IS INADMISSIBLE, SERVE ON THE ASSESSEE A NOTICE SPECIF YING PARTICULARS OF SUCH 6 CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR R ELIEF AND REQUIRE HIM, ON A DATE TO BE SPECIFIED THERE-IN TO PRODUCE, OR C AUSE TO BE PRODUCED, ANY EVIDENCE OR PARTICULARS SPECIFIED THEREIN OR ON WHI CH THE ASSESSEE MAY RELY, IN SUPPORT OF SUCH CLAIM ; (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDER STATED THE INCOME OR HAS NOT COMPUTED EXCESSI VE LOSS OR HAS NOT UNDER PAID THE TAX IN ANY MANNER, SERVE ON THE ASSE SSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO A TTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED THERE, ANY EVIDENC E ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN : PROVIDED THAT NO NOTICE UNDER THIS SUB-SECTION SHAL L BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED. 139 (4) ANY PERSON WHO HAS NOT FURNISHED A RETURN W ITHIN THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE C OMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER: PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOU S YEAR RELEVANT TO THE DASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL , 1988, OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 2.9 SECTION 142 IS FOR THE PURPOSE OF MAKING AN ASS ESSMENT UNDER THE INCOME TAX ACT. NOTICE U/S 142 CAN BE ISSUED FOR REQUIRING THE ASSESSEE TO FURNISH THE RETURN AS PER SUB-CLAUSE (I) OF SECTION 144(1). IN CASE THE ASSES SEE HAS MADE A RETURN THEN THE AO CAN REQUIRE THE ASSESSEE TO PRODUCE SUCH ACCOUNTS OR DO CUMENTS AS MAYBE REQUIRED BY THE AO OR TO FURNISH AN INFORMATION ON THE POINTS SPECI FIED BY THE AO. IN THE INSTANT CASE, NOTICE U/S 142(1) DATED 16-08-07 WAS ISSUED TO THE ASSESSEE TO FILE THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 BY 20 TH SEPT. 2007. THE CONTENTION OF THE REVENUE IS 7 THAT THE RETURN FILED ON 27-03-08 CANNOT BE CONSIDE RED AS A RETURN FILED IN RESPONSE TO NOTICE U/S 142(1) OF THE ACT. SECTION 139(4) ALLOWS THE ASSESSEE TO FURNISH THE RETURN BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE RELEV ANT ASSESSMENT YEAR OR BEFORE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. IN CASE THE ASSESSEE HAS NOT FURNISHED RETURN WITHIN THE TIME ALLOWED U/S 139(1) OR WITHI N THE TIME ALLOWED UNDER A NOTICE ISSUED U/S 142(1). HENCE THE PROVISIONS OF SECTION 139(4) IS CLEAR AND UNAMBIGUOUS AND THE ASSESSEE WAS HAVING A RIGHT TO FILE THE RETURN WITHIN ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR AS HE HAS FAILED TO FILE T HE RETURN WITHIN THE TIME ALLOWED U/S 142(1) OF THE ACT. THE RETURN CANNOT BE TREATED AS INVALID OR NONEST. WE THEREFORE, HOLD THAT THE RETURN FILED ON 27-03-08 IS A VALID RETURN AS PER THE PROVISIONS OF SECTION 139(4) OF THE ACT. NOTICE U/S 143(2) IS TO BE ISSUED IN C ASE THE RETURN HAS BEEN FURNISHED U/S 139 OR IN RESPONSE TO NOTICE U/S 142(1) BECAUSE SECTI ON 143(2) REFERS TO SECTION 139 ONLY. NOTICE U/S 143(2) CAN BE ISSUED WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHCIH THE RETURN HAS BEEN FILED. THUS IN THE INSTANT CASE, NOTICE U/S 143(2) WAS REQUIRED TO BE ISSUED BEFORE 30-09-2008. IT IS NOT THE CASE OF REVENUE THAT NOTICE U/S 143(2) WAS ISSUED. IT IS TRUE THAT SECTI ON 142 AUTHORIZES THE AO TO ISSUE NOTICE FOR THE PURPOSE OF MAKING AN ASSESSMENT. UNDER SECT ION 143(3), THE ASSESSMENT IS ALSO TO BE MADE AFTER ISSUE OF NOTICE U/S 143(2). THE ISSUE BEFORE US IS AS TO WHETHER THE AO CAN ISSUE NOTICE U/S 142(1) IN A CASE WHERE HE HAS NOT ISSUED NOTICE U/S 143(2) WITHIN THE TIME LIMIT AVAILABLE U/S 143(2) OF THE ACT. ONE HAS TO MAKE A HARMONIOUS INTERPRETATION OF SECTION 143(2) AND SECTION 142(1). ONE PROVISION SHOULD BE CONSTRUED WITH REFERENCE TO ANOTHER PROVISION SO AS TO MAKE THE CONSISTENT E NACTMENT OF THE WHOLE STATUTE. ONE 8 PROVISION OF THE ACT CANNOT BE SO CONSTRUED SO AS TO DEFEAT THE ANOTHER PROVISION OF THE ACT. 2.10 WE CAN CONSIDER THE SIMILAR SITUATION IN WHICH ONE HAS TO CONSIDER AS TO WHETHER THE PROVISIONS OF SECTION 154 ARE APPLICABLE WHEN R ETURN IS PROCESSED U/S 143(1) AS PER THE PROVISIONS APPLICABLE W.E.F. 01-06-1999. AS PE R PROVISIONS APPLICABLE FROM 01-06- 1999, THE AO HAS NO POWER TO DISTURB THE INCOME DEC LARED BY THE ASSESSEE IN THE RETURN, THOUGH THE PROVISIONS OF SECTION 154 GIVES A POWER TO THE AO TO AMEND ANY INTIMATION U/S 143(1) OF THE ACT. THIS ISSUE WAS BEFORE THE AH EMDABAD BENCH IN THE CASE OF PACKERS INDIA VS ITO 101 TTJ 323 AS TO WHETHER THE AO CAN DISTURB THE INCOME BY INVOKING THE PROVISIONS OF SECTION 154 OF THE ACT. THE ITAT AHEMDABAD BENCH HELD THAT WHAT CANNOT BE DONE DIRECTLY CANNOT BE DONE IN DIRECTLY. THE HON'BLE ALLABHAD HIGH COURT IN THE CASE OF CIT VS. ANUPAM SUSHIL GARG 265 ITR 474 (AT PAGE 477) HAS OBSERVED AS UNDER:- IT IS A SETTLED PROPOSITION OF LAW THAT WHAT CANN OT BE DONE PER DIRECTUM IS NOT PERMISSIBLE TO BE DONE PER OBLIQUU M, MEANING THEREBY, WHATEVER IS PRO- HIBITED BY LAW TO BE DONE, CANNOT LEGALLY BE AFFECTED BY AN INDIRECT AND CIRCUI- TOUS CONTRIVANCE ON THE PRI NCIPLE OF QUANDO ALIQUID PROHIBETUR, PROHIBETUR AT OMNE PER QUOD DE VENITUR AD ILLUD. IN JAGIR SINGH V. RANBIR SINGH, AIR 1979 SC 381, TH E APEX COURT HAS OBSERVED THAT AN AUTHORITY CANNOT BE PERMITTED TO EVADE A LAW BY SHIFT OR CONTRIVANCE. WHILE DECIDING THE SAID CA SE, THE SUPREME COURT PLACED RELIANCE ON THE JUDGMENT IN FOX V. BISHOP O F CHESTER [1824] 2 B & C 635, WHEREIN IT HAS BEEN OBSERVED AS UNDER (PA GE 384) :- 9 TO CARRY OUT EFFECTUALLY THE OBJECT OF A STATUTE, I T MUST BE CONSTRUED AS TO DEFEAT ALL ATTEMPTS TO DO, OR AVOI D DOING, IN AN INDIRECT OR CIRCUITOUS MANNER THAT WHICH IT HAS PROHIBITED OR E NJOINED. LAW PROHIBITS TO DO SOMETHING INDIRECTLY WHICH IS PROHIBITED TO BE DONE DIRECTLY. SIMILAR VIEW HAS BEEN REITERATED BY THE APEX COURT IN M. C. MEHTA V. KAMAL NATH, AIR 2000 SC 1997, WHEREIN IT HAS BEEN HELD THAT EVEN THE SUPREME COURT CANNOT ACHIEVE SOMETHI NG INDIRECTLY WHICH CANNOT BE ACHIEVED DIRECTLY BY RESORTING TO THE PR OVISIONS OF ARTICLE 142 OF THE CONSTITUTION, WHICH EMPOWERS THE COURT TO P ASS ANY ORDER IN A CASE IN ORDER TO DO COMPLETE JUSTICE. 2.11 FOLLOWING THE SAME ANALOGY, WE FEEL THAT WHATE VER IS NOT POSSIBLE TO BE DONE DIRECTLY U/S 143(2) CANNOT BE DONE U/S 142(1) OF TH E ACT. THUS THE AO CANNOT ISSUE NOTICE U/S 142(1) FOR THE PURPOSE OF MAKING AN ASSE SSMENT AFTER FILING OF THE RETURN AFTER THE TIME LIMIT OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAS EXPIRED. SINCE NO NOTICE U/S 143(2) HAS BEEN ISSUED THEREFORE, THE RETURN FILED IS TO BE ACCEPTED AND NO ASSESSMENT U/S 143(3) OR U/S 144 CAN BE MADE. 2.12 THE DELHI BENCH IN THE CASE OF. DR K.C. VERMA (SUPRA) HAS OBSERVED AS UNDER:- ENQUIRY NOTICE U/S 142(1) CAN BE ISSUED ONLY IF T HE AO EITHER HAS VALIDLY ASSUMED THE JURISDICTION TO MAKE THE ASSESS MENT OR CAN VALIDLY ISSUE JURISDICTION TO ASSESS AFTER MAKING ENQUIRY U /S 142(1). THEREFORE, IT MAY BE IMPLIEDLY INFERRED THAT IF THE POWER TO ASSE SS IS LOST BY THE EXPIRY OF LIMITATION PERIOD, THE NOTICE U/S 142(1) CANNOT BE ISSUED. THE JURISDICTION TO ASSESS CAN BE ASSUMED ONLY WITHIN T HE FOUR CORNERS OF PROVISIONS OF SECTION 143. THE PROVISIONS OF SUB-SE CTION (2) OF THIS SECTION CLEARLY PROVIDES THAT NOTICE FOR MAKING ASS ESSMENT CAN BE ISSUED ONLY WITHIN A PERIOD OF 12 MONTHS FROM THE END OF T HE MONTH IN WHICH THE RETURN IS PROCESSED. THAT MEANS AFTER THE EXPIRY OF SUCH PERIOD, THE AO 10 HAS NO JURISDICTION TO MAKE THE ASS U/S 143(2) OR (3) AND THE ONLY COURSE OPEN TO THE AO IS TO ACCEPT RETURN U/S 143(1). THER EFORE, AFTER THE EXPIRY OF THE PERIOD MENTIONED IN SUB-SECTION (2) OF SECTI ON 143, NO NOTICE U/S 142(1) CAN BE ISSUED BECAUSE OF THE LACK OF POWER T O ASSESS. NOTICE U/S 18 DATE4D 23 RD MARCH 1998 WAS SERVED ON THE ASSESSEE BUT HE REQUE STED THE AO VIDE LETTER DATED 24 TH APRIL, 1998 TO TREAT THE RETURNS ALREADY FILED AS RETURNS FILED IN RESPONSE TO NOTICES U/S 148. AT TH E BEST, IT COULD BE SAID THAT THE RETURNS WERE FILED BY THE ASSESSEE ON 24 TH APRIL, 1998, AND THEREFORE, NOTICES U/S 143(2) COULD BE ISSUED ON OR BEFORE 30 TH APRIL, 1999. ADMITTEDLY, NO NOTICE EITHER U/S 143(2) OR SECTION 142(1) WAS ISSUED ON OR BEFORE THIS DATE. THE FIRST NOTICE WAS ISSUED U/ S 142(1) ON IST MARCH, 2000 WHICH WAS CERTAINLY BEYOND THE DATE OF 30 TH APRIL, 1999, AND THEREFORE, IT HAS TO BE HELD THAT THE ISSUE OF NOTI CES U/S 142(1) WAS BARRED BY THE PERIOD OF LIMITATION. CONSEQUENTLY, THE ASSE SSMENT FRAMED IN PURSUANCE OF SUCH NOTICE WAS ILLEGAL AND WITHOUT JU RISDICTION :- DR VIJAY KUMAR DATLA VS. ASSTT. CIT (1997) 58 ITD 339 (HYD) RELIED ON. HENCE CONSIDERING THE ABOVE DECISION AND TAKING INT O ACCOUNT AS TO WHAT CANNOT BE DONE DIRECTLY CANNOT BE DONE INDIRECTLY, WE FEEL THAT AS SESSMENT ORDER IS INVALID. 2.13 WE DO NOT AGREE WITH THE CONTENTIONS OF THE L D.AR THAT ASSESSMENT U/S 144 CANNOT BE MADE IN CASE THE ASSESSEE HAS MADE PART C OMPLIANCE OF NOTICE U/S 142(1) OF THE ACT. IF THE ASSESSEE FAILS TO COMPLY WITH ALL THE T ERMS OF NOTICE THEN THE AO CAN MAKE ASSESSMENT U/S 144 OF THE ACT. THE HONB'LE APEX COU RT IN THE OF ACIT VS HOTEL BLUE MOON, 321 ITR 362 HELD THAT ISSUING OF NOTICE U/S 1 43(2) IS MANDATORY FOR CHECKING OF THE RETURN FILED BY THE ASSESSEE. SINCE THERE IS NO NOTICE U/S 143(2) OR U/S 142(1) WITHIN TIME AVAILABLE U/S 143(2), THEREFORE, THE ASSESSMEN T IS INVALID BECAUSE THE FIRST NOTICE U/S 142(1) WAS ONLY FOR THE PURPOSE OF FILING THE RETUR N. FOR THE PURPOSE OF MAKING AN 11 ASSESSMENT, NOTICE U/S 142(1) WAS ISSUED FOR THE FI RST TIME ON 30-04-2009. WE THEREFORE, HOLD THAT THE ASSESSMENT ORDER IS INVALID AND IS CA NCELLED. 3.1 THE SECOND GRIEVANCE OF THE ASSESSEE IS THAT TH E LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF LONG TERM CA PITAL GAIN ARISING OUT OF SALE OF AGRICULTURAL LAND THOUGH THE SAME WAS NOT A CAPITAL ASSET WITHIN THE PROVISIONS OF INCOME TAX ACT, 1961. 3.2 WE HAVE HEARD BOTH THE PARTIES. BEFORE THE LD C IT(A), THE ASSESSEE FILED THE CERTIFICATE FROM GRAM PANCHAYAT TO SHOW THAT THE LA ND WAS SITUATED BEYOND THE DISTANCE OF MORE THAN 8 KM OF THE MUNICIPAL LIMIT. THE GRAM PANCHAYAT IS NOT AN AUTHORITY TO ISSUE SUCH A CERTIFICATE. THE CERTIFICATE WAS TO BE OBTAINED FROM THE REVENUE AUTHORITIES LIKE TEHSILDAR ETC WE THEREFORE, FEEL THAT THE ISSU E IS REQUIRED TO BE RESTORED BACK ON THE FILE OF THE AO BUT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO FILE THE EVIDENCE TO SHOW THAT THE LAND IS SITUATED BEYOND 8 KM OF MUNIC IPAL LIMIT. 4.1 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 3. HENCE, THE SAME IS DISMISSED BEING NO T PRESSED. 5.1 THE FOURTH GRIEVANCE OF THE ASSESSEE IS THAT TH E LD. CIT(A) HAS ERRED IN NOT DIRECTING THE DEDUCTION U/S 54 OF THE ACT THOUGH TH E ASSESSEE INVESTED RS. 15.00 LACS IN PURCHASING OF AGRICULTURAL LAND OUT OF SALE PROCEED S. 5.2 WE HAVE HEARD BOTH THE PARTIES. SINCE THE ISSUE OF TAXABILITY ON THE PROFIT FROM SALE OF LAND UNDER THE HEAD CAPITAL GAIN HAS BEEN SET ASIDE, THEREFORE, THE ALLOWABILITY OF CLAIM U/S 54B IS ALSO RESTORED BACK ON THE FILE OF THE AO. THE AO WILL CONSIDER THE ALLOWABILITY OF DEDUCTION IN CASE HE COMES TO THE C ONCLUSION THAT PROFIT FROM SALE OF AGRICULTURAL LAND IS TAXABLE UNDER THE HEAD CAPITA L GAIN. 12 6. IN THE RESULT, THE ASSESSMENT IS CANCELLED AND T HE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22-11 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 22/11/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI MADAN SINGH KHANGAROT 2. THE ITO , WARD 7 (4), JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.252/JP /11) A.R, ITAT, JAIPUR