The Income tax Officer, Jalandhar V. M/s. Khanna Malleables, Jalandhar

ITA 284/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5816 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Assessment record
• Section: 143(3); 133A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO. 284(ASR)/2010 ASSESSMENT YEAR:2005-06 PAN : THE INCOME TAX OFFICER, VS. M/S. KHANNA MALLEABLE S, WARD II(1), JALANDHAR. 242, DADA COLONY, JALANDHA R. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH. TARSEM LAL, DR ASSESSEE BY: SH. SANDEEP VIJH, CA ORDER PER MEHAR SINGH, AM, THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), BHATINDA, DATED 22.03.2010, PASSED U/S 250 (6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO IN SHORT THE AC T) FOR THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), HAS ERRED IN LAW IN CANCELING THE ASSESSMEN T ORDER PASSED UNDER SECTION 143(3) OF INCOME-TAX ACT, 1961 . 1.1. WHILE DOING SO THE LD. CIT(A) FAILED TO APPRECIATE THE FACTS THAT DURING THE ENTIRE ASSESSMENT PROCEEDINGS, THE ISSUE REGARDING 2 SERVICE OF NOTICE U/S 143(2) OF THE ACT WAS NEVER T AKEN UP BEFORE THE A.O. NOR WAS TAKEN UP IN THE ORIGINAL GR OUNDS OF APPEAL. THE LD. CIT(A) HAS NOT GIVEN A CONCRETE FIN DING THAT NOTICE HAS NOT BEEN SERVED WITHIN THE PERIOD OF 12 MONTHS BUT HAS STATED THAT NOTICE IS NOT AVAILABLE ON RECORD A ND THERE IS NO PROOF OF ISSUE OF SERVICE OF NOTICE WITHIN PERIOD O F 12 MONTHS. 2. THAT, IT IS PRAYED THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND THAT OF THE A.O. RESTORED. 3. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND OR ALTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AN D DISPOSED OF. 3. GROUND NOS.1 & 1.1 RAISED BY THE REVENUE ARE INT ER-CONNECTED AND RELATE TO THE CANCELLATION OF THE ASSESSMENT ORDER, PASSED UNDER SECTION 143(3) OF THE ACT. IN THE COURSE OF PRESENT APPEL LATE PROCEEDINGS, THE LD. DR PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER. HE PLEADED THAT THE LD. CIT(A), HAS NOT GIVEN A CONCRETE FINDING TH AT THE NOTICE HAS NOT BEEN SERVED WITHIN THE PERIOD OF 12 MONTHS BUT HAS STATE D THAT THE NOTICE IS NOT AVAILABLE ON RECORD AND THERE IS NO PROOF OF ISSUE OF SERVICE OF NOTICE WITHIN PERI9OD OF 12 MONTHS. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUPPORTED THE ORDER OF THE CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE HIM. 5. WE HAVE HEARD BOTH THE PARTIES AND GIVEN OUR THO UGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS, EXAMINED THE FACTS OF THE CASE, EVIDENCE AND MATERIAL PLACED ON RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. A CAREFUL PERUSAL OF THE IMPUGNED APPELLATE ORDER DATED 22.03.2010, CLEARLY REVEALS THAT THE LD. CIT(A), HAS CONSIDERED AND ADJUDICATED THE ISSUE, IN QUESTION, IN GREATER DETAIL, AFTER APPRECIATION OF THE EVIDENCES AND MATERIAL ON RECORD, AS ALSO THE LEGAL AND FACTUAL POSITION OF THE CASE. NEEDLESS TO SAY 3 THAT THE IMPUGNED APPELLATE ORDER IS WELL REASONED AND BASED ON THE COGENT AND CREDIBLE MATERIAL AND FACTS OF THE CASE. HOWEVE R, IT WOULD PERTINENT TO REPRODUCE THE RELEVANT PART OF THE DECISION OF THE CIT(A), FOR THE PURPOSE OF PROPER APPRECIATION OF THE SAME: 1.4 I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON THE ADDITIONAL GROUND OF APPEAL TAKEN BY THE APPELLANT AND HAVE AL SO PERUSED THE ASSESSMENT RECORDS. THIS IS THE CASE IN WHICH SURVE Y U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE A SSESSEE ON 27.9.2006. THE RETURN OF INCOME WAS FILED BY THE AS SESSE ON 31.10.2005. THE RETURN WAS PROCESSED U/S 143(10 ON 23.3.2006. THE FIRST ORDER SHEET NOTING IN THE CASE OF THE ASSESSE ES RETURN READS AS UNDER: RETURN DECLARING TOTAL INCOME AT RS.124,24,114/- W AS FILED ON 30.10.2005. THE SAME WAS PROCESSED U/S 143(1) ON 23 .3.2006 AND INTIMATION TO THIS EFFECT WAS SENT TO THE ASSES SEE. THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY UNDER CASS/U NDER CLAUSE (Q)/(R) OF INSTRUCTION CONTAINED IN ACTION P LAN 2006-07 IN THE PROCEDURE FOR SELECTION OF CASES OF SCRUTINY FO R NON CORPORATE ASSESSEES. NOTICE U/S 143(2) WAS ISSUED O N 24.10.2006 (OVERWRITING ON 24 IN THE DATE SEEN) AND SERVED UPON THE ASSESSEE FOR 2.11.2006. 1.5. THE ABOVE ORDER SHEET NOTING IS NOT DATED AND IT IS NOT CLEAR ON WHICH DATE THE SAME WAS SIGNED BY THE AO. THE NEXT ORDER SHEET NOTING IS FOR 2.11.2006 WHERE THE AO HAS NOTED NON E ATTENDS. THE SUBSEQUENT NOTING IS DATED 27.11.2006 WHEN THE ASS ESSEES COUNSEL ATTENDED IN RESPONSE TO NOTICES U/S 143(2) AND 142( 1) ISSUED ON 9.11.2006. IN THE ASSESSMENT ORDER THE AO HAS MENTI ONED THAT NOTICE U/S 143(2) WAS ISSUED ON 24.10.2006 AND THE SAME WA S DULY SERVED UPON HE ASSESSEE ON 26.10.2006. HOWEVER, THE SAID N OTICE DATED 24.10.2006 IS NOT AVAILABLE IN THE ASSESSMENT RECOR D. THE FIRST NOTICE U/S 143(2) AVAILABLE IN THE ASSESSMENT RECORD IS D ATED 9.11.2006. THE FILE IS PAGE NUMBERED THERE ARE NO MISSING PAGES. A QUESTIONNAIRE DATED 30.10.2006 IS AVAILABLE IN THE ASSESSMENT REC ORD IN WHICH THE CASE HAS BEEN FIXED FOR HEARING ON 27.11.2006. THIS IS THE SAME DATE 4 OF HEARING GIVEN IN THE NOTICES U/S 143(2) AND 142( 1) ISSUED ON 9.11.2006. 1.6. THE LD. AO HAS ALSO SUBMITTED A LETTER DATED 1 2.3.2010 IN WHICH SHE HAS INFORMED THAT SHE HAD CONSULTED THE D ISPATCH REGISTER OF THE ITO WAD II(1) FOR THE FINANCIAL YEAR 2006-07 AN D COULD NOT FIND ANY ENTRY REGARDING ISSUE OF NOTICE UNDER SECTION 1 43(2) IN THE SUBJECT CASE IN THE REGISTER IN THE MONTH OF OCT., 2006. 1.7. THE FACTS ON RECORD, THUS, SHOW THAT WHILE THE AO HAS CONTENDED IN THE ASSESSMENT ORDER THAT NOTICE U/S 1 43(2) WAS ISSUED ON 24.10.2006 FIXING THE HEARING ON 2.11.2006, THERE I S NO EVIDENCE OF EVEN THE OFFICE COPY OF THIS NOTICE ON RECORD NOR I S THERE ANY OTHER EVIDENCE WITH THE AO REGARDING SERVICE OF NOTICE U/ S 143(2) ON THE ASSESSEE UPTO 31.10.2006. THOUGH IT IS MENTIONED IN THE ASSESSMENT ORDER THAT NOTICE WAS SERVED ON 26.10.2006, IN THE ABSENCE OF ANY PROOF OF SUCH NOTICE WITH THE AO, AND IN THE FACE OF THE CHALLENGE BY THE ASSESSEE TO THE RECEIPT OF SUCH NOTICE BEFORE 31.10.2006, THE QUESTION ARISES , AS TO WHETHER THE AO CAN BE SAID TO HAVE BEEN ASSUMED JURISDICTION CORRECTLY U/S 143(3) FOR PASSI NG OF THE IMPUGNED ASSESSMENT ORDER. 1.8. THE LD. AR HAS RELIED ON THE DECISION OF THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CE BON INDIA LTD. ITA NO. 85 OF 2009 DATED 7.7.2009. IN THIS CASE THE ASS ESSEE FILED RETURN OF INCOME ON 30.11.2006 WHICH WAS PROCESSED U/S 143(1) (A) ON 30.5.1997. THEREAFTER ASSESSMENT WAS FRAMED U/S 144 OF THEACT WHICH WAS AFFIRMED IN APPEAL. THE TRIBUNAL, HOWEVER, REMI NDED THE MATTER TO CIT(A). THE CIT(A) IN THE SECOND ROUND, ALLOWED THE APPEAL ON THE GROUND THAT THERE WAS NO EVIDENCE TO SHOW THAT NO EVIDENCE TO SHOW THAT NOTICE U/S 143(2) HAD BEEN SERVED ON THE ASSES SEE BEORE 30.11.2007 I.E. WITHIN ONE YEAR OF FILING OF THE R ETURN. THE CIT(A) ACCORDINGLY, HELD THAT THE ASSESSMENT WAS VOID. THE HONBLE TRIBUNAL UPHELD THE ORDER OF CIT(A). THE REVENUE FILED APPEA L BEFORE THE HONBLE HIGH COURT RAISING QUESTIONS OF LAW AS TO WHETHER WHEN THE ASSESSEE HAD PARTICIPATED IN THE PROCEEDINGS AND TH E ISSUE OF NOTICE WAS SEEN FROM THE DISPATCH REGISTER, THE ORDER OF T HE TRIBUNAL WAS CORRECT. A FURTHER QUESTION OF LAW WAS RAISED BY TH E REVENUE AS TO WHETHER THE TRIBUNAL WAS RIGHT IN TREATING THE DEFE CT, IF ANY, IN SERVICE OF NOTICE U/S 143(2) AS AN IRREGULARITY CURABLE U/S 292BB OF THE ACT. 5 THE HONBLE HIGH COURT NOTED THAT BOTH THE CIT(A)/T RIBUNAL HAD RECORDING THE FINDING THAT NOTICE WAS NOT SERVED WI THIN STIPULATED TIME. IT WAS HELD THAT MERE GIVING OF DISPATCH NUM BER WOULD NOT RENDER THE SAID FINDINGS TO BE PERVERSE AND THAT WI THOUT SUCH NOTICE BEING SERVED, THE AO HAD NO JURISDICTION TO MAKE AS SESSMENT. IT WAS FURTHER HELD THAT ABSENCE OF NOTICE COULD NOT BE HE LD TO BE CURABLE U/S 292 BB OF THE ACT. 1.9. IN THE PRESENT CASE, APART FROM A MENTION IN T HE ASSESSMENT ORDER REGARDING SERVICE OF NOTICE U/S 143(2) ON 26. 10.2006 ON THE ASSESSEE AND MENTION IN ORDER SHEET ABOUT ISSUE OF NOTICE DATED 24.10.2006 FOR HEARING ON 2.11.2006, THERE IS NO EV IDENCE OF EITHER THE ISSUE OF NOTICE OR THE SERVICE OF THE IMPUGNED NOTI CE. IN THE ABSENCE OF PROOF OF SERVICE OF NOTICE WITHIN THE STIPULATE PER IOD OF 12 MONTHS, THE AO CANNOT BE SAID TO HAVE ASSUMED JURISDICTION CORR ECTLY FOR DOING ASSESSMENT U/S 143(3). IT IS TRUE THAT THE ASSESSEE DID NOT RAISE ANY OBJECTION DURING THE ASSESSMENT PROCEEDINGS AND THI S MAY RAISE A PRESUMPTION IN FAVOUR OF REVENUE IN THIS REGARD. S ECTION 292BB OF THE ACT, INSERTED BY THE FINANCE ACT, 2008 W.E.F. 1 .4.2008, PROVIDES THAT IF THE ASSESSEE HAS APPEARED OR CO-OPERATED IN THE ASSESSMENT PROCEEDINGS, HE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION THAT THE NOTICE WAS NOT SERVED UPON HIM IN TIME, UNLESS THE ASSESSEE HAS RAISED AN OBJECTION REGARDING NON SERVICE OF NOTICE BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THIS SECTION IS AP PLICABLE W.E.F. 1.4.2008 AND THE HONBLE SPECIAL BENCH OF ITAT, DEL HI BENCH HAVE HELD IN THE CASE OF KUBER TOBACCO PRODUCTS PVT. LT D. VS. DCIT 117 ITD 273 (DEL)(SB) THAT SECTION 292BB WAS PROSPECTIV E IN NATURE AND WOULD APPLY FOR ASSESSMENT YEAR 2008-09 ONWARDS. EV EN OTHERWISE, THE HONBLE JURISDICTIONAL HAVE HELD IN THE CASE OF CEBON INDIA LTD. (SUPRA) THE ABSENCE OF NOTICE WAS NOT CURABLE U/S 292BB OF THE ACT. IN THE PRESENT CASE, THE SAID NOTICE DATED 24.10.20 06 IS NOT AVAILABLE ON RECORD AND THERE IS NO PROOF OF SERVICE OF THIS NOTICE BEFORE 31.10.2006 WHEN THE PERIOD OF 12 MONTHS FOR SERVICE OF THE FIRST NOTICE U/S 143(2) EXPIRED. UNDER THE CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF CEBON INDIA LTD. (SUPRA), THE AO IS HELD TO HAVE NO JURISDICTION TO PASS THE ASSESSMENT ORDER UNDER AP PEAL. THE ASSESSMENT ORDER UNDER APPEAL IS, THEREFORE, CANCEL ED AS BAD IN LAW. 6 5.1. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIR MITY IN THE FINDINGS OF THE CIT(A), AS THE SAME ARE BASED ON PROPER APPREC IATION OF THE LEGAL AND FACTUAL POSITION OF THE CASE. ACCORDINGLY, THIS APP EAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 15TH JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 15TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S. KHANNA MALLEABLES, JALANDHAR. 2. THE ITO, II(1), JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ASR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.