Asstt./Dy CIT, New Delhi V. Jagdish Prasad Sharma, New Delhi

ITA 291/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9738 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-08-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 28-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Additional evidence
• Section: 142(1); 143(2); 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI DEEPAK R. SHAH, ACCOUNTANT MEMBER I.T.A.NO.291/DEL/2009 ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME-TAX, JAGDISH PRASA D SHARMA, CIRCLE 22(1), NEW DELHI. VS. X-36, OKHLA INDL . AREA, PHASE-II, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K. GUPTA, SR. DR. RESPONDENT BY : NONE (APPLICATION REJECTED). O R D E R PER DEEPAK R. SHAH, ACCOUNTANT MEMBER. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXIII, NEW DEL HI, DATED 17.11.2008 FOR THE ASSESSMENT YEAR 2004-05. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS BEF ORE US:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN ACCEPTING ADDITIONAL GROUNDS OF APPEAL WIT HOUT AFFORDING OPPORTUNITY TO THE ASSESSING OFFICER UNDE R RULE 46A AND COMING TO THE CONCLUSION THAT THE NOTICE U/S 14 3(2)WAS ISSUED BEYOND A PERIOD OF 12 MONTHS. THE LEARNED CIT(A) WHILE CANCELLING THE ASSESSMENT OBSERVED AS UNDER:- 10. IN OTHER WORDS, THE PROVISO TO SECTION 143(2), AS IT STOOD THEN VERY CLEARLY LAYS DOWN THAT THE AO HAS GOT NO POWER TO 2 MAKE A SCRUTINY ASSESSMENT UNLESS HE ISSUES A NOTIC E IN THE PRESCRIBED TIME OF 12 MONTHS. IN THE CASE IN HAND, IT IS DISCERNABLE FROM THE ORDER OF THE AO THAT THE RETUR N WAS FILED ON 1.11.2004. NOTICE U/S. 143(2) WAS ISSUED ON 8.9 .2006. IN OTHER WORDS, THE ORDER OF THE AO ITSELF STATES THAT THE NOTICE U/S. 143(2) WAS ISSUED BEYOND A PERIOD OF 12 MONTHS. I HAVE, AS A MATTER OF ABUNDANT PRECAUTION, GONE THROUGH THE ASS ESSMENT RECORD. THERE IS NO DOUBT THAT THE RETURN FOR THE ASSESSMENT YEAR WAS FILED ON 1.11.2004, VIDE ACKNOWLEDGEMENT NO.2252000553. FROM THE ORDER SHEET ENTRY, IT APPE ARS THAT THE FIRST TIME A NOTICE U/S. 143(2) WAS ISSUE DON 8.9.2 006. THE ORDER SHEET RUNS INTO 2 PAGE. THE NOTING OF 8.9.20 06 IS THE FIRST ENTRY, ON THE FIRST PAGE OF THE ORDER SHEET, WHICH STATES AS FOLLOWS: NOTICE U/S 143(2) AND 142(1) ALONG WITH DETAILED QUESTIONNAIRE ISSUED FIXING THE CASE FOR 15.9.2006. 11. IN OTHER WORDS, THERE IS NO DISPUTE THAT THE NO TICE U/S. 143(2) HAS BEEN ISSUED BEYOND THE PERIOD OF 12 MONT HS. THERE IS ALSO NO DISPUTE THAT THE LIMITATION TO ISSUE NOT ICE U/S. 143(2) IS PROVIDED IN THE PROVISO TO THE SAID SECTION. CB DT CIRCULAR NO.549 DT. 31.10.1989 MANDATES THAT THE DEPARTMENT MUST SERVE THE NOTICE AS REQUIRED BY PROVISO TO SEC. 143 (2) OF THE ACT, WITHIN THE PERIOD SPECIFIED THEREIN. THE CIRCULARS OF THE BOARD ARE BINDING ON THE REVENUE AUTHORITIES AS HELD IN K .P. VARGHESE VS. ITO [1981] 131 ITR 597 (SC), AZADI BACHAO ANDOL AN [2003] 263 ITR 706 (SC), UCO BANK VS. CIT [1999] 23 7 ITR 889, CIT VS. ANJUM M.H. GHASWALA [2001] 252 ITR 1 ( SC) ET AL. IN OTHER WORDS, CIRCULAR NO.549 SHOULD HAVE BEE N FOLLOWED BY THE LEARNED AO AND THEREFORE SHOULD HAVE ISSUED THE NOTICE WITHIN STATUTORY PERIOD OF 12 MONTHS. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ASSESSMENT IS FRAMED UNDER SECTION 144 OF THE ACT. THE PRE-CONDITION FOR ASSESSMENT UNDER SECTION 144 IS THAT 3 (1) THE ASSESSEE FAILS TO MAKE RETURN AS REQUIRED U NDER SECTION 139 OF THE ACT; OR (2) THE ASSESSEE FAILS TO COMPLY WITH ALL THE TERMS OF NOTICE ISSUED UNDER SECTION 142(1), OR FAILS TO COMPLY WIT H DIRECTION UNDER SECTION 142(2A); OR (3) THE ASSESSEE HAVING FILED A RETURN FAILS TO COM PLY WITH ALL THE TERMS OF NOTICE UNDER SECTION 143(2) OF THE ACT . HOWEVER, AS PER THE PROVISO TO SECTION 143(2) NO NO TICE UNDER SECTION 143(2) CAN BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF 1 2 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED. THE LE ARNED CIT(A) ON EXAMINATION OF CASE RECORD HAS FOUND THAT WHEREAS T HE ASSESSEE HAS FILED A RETURN ON 1.11.2004, THE NOTICE UNDER SECTION 143(2 ) WAS ISSUED FOR THE FIRST TIME ON 8.9.2006. THUS THE NOTICE UNDER SECTION 14 3(2) IS ISSUED BEYOND THE LIMITATION PRESCRIBED IN PROVISO TO SECTION 143(2). THIS FINDING HAS NOT BEEN CHALLENGED BY THE ASSESSING OFFICER. NON-ISSUANCE OF NOTICE IS NOT MERELY AN IRREGULARITY BUT AN ILLEGALITY WHICH CANNOT BE C URED. NO COURT HAS POWER TO EXTEND THE LIMITATION STATUTORILY PRESCRIBED. I N VIEW OF THE SAME, THE ASSESSING OFFICER WAS NOT COMPETENT TO FRAME ASSESS MENT UNDER SECTION 144 OF THE ACT. ACCORDINGLY, THE ASSESSMENT WAS RIGHTL Y CANCELLED BY THE LEARNED CIT(A). IT IS ALSO TO BE NOTED THAT THE LEARNED CI T(A) HAS NOT ADMITTED ANY ADDITIONAL EVIDENCE WHICH REQUIRES TO COMPLY WITH R ULE 46A OF THE INCOME- TAX RULES. THE LEARNED CIT(A) HAS EXAMINED THE CAS E RECORD ITSELF BEFORE 4 COMING TO CONCLUSION THAT NOTICE ISSUED UNDER SECTI ON 143(2) IS BEYOND THE STATUTORY PERIOD. ACCORDINGLY, THERE IS NO INFIRMI TY IN THE ORDER OF THE CIT(A). 4. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2009. SD/- SD/- (A.D. JAIN) (DEEPAK R. SHAH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 TH SEPTEMBER, 2009. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.