Shri Vinod Kumar Jain, Indore V. THE ITO 2(1), Indore

ITA 318/IND/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2523 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-03-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B J BORICHA
• Assessee Lawyers: C G RAWKA
• Keywords: Reopening of assessment; Salary income; Reassessment proceedings
• Section: 148; 143(3); 142(1)

Judgement Text

VINOD KUMAR JAIN ITA NO. 318/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.318/IND/2017 ASSESSMENT YEAR 2006-07 REVENUE BY S HRI B.J.BORICHA , SR.DR ASSESSEE BY SHRI C.G. RAWKA , CA DATE OF HEARING 06.03 .2019 DATE OF PRONOUNCEME NT 11 .0 3 .2019 O R D E R PER MANISH BORAD. THE ABOVE CAPTIONED APPEAL IS FILED AT THE INSTANC E OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2006-07 AND IS DIRE CTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- I (IN SHORT LD.CIT(A)], INDORE DATED 03.02.2017 WHICH IS ARI SING OUT OF THE ORDER U/S 143(3)/147 OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 18.03.2014 FRAMED BY ITO 2(1), INDORE. SH RI VINOD KUMAR JAIN, 87 RAVINDRA NAGAR, INDORE VS. INCOME TAX OFFICER 2 ( 1 ), INDORE ( APPELLANT ) (RESPONDENT ) PAN NO. A B JPJ8099E VINOD KUMAR JAIN ITA NO. 318/IND/2017 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL; ( 1) THAT THE LD. AO ERRED ON FACTS OF THE CASE AND I GNORED THE PROVISO TO CLAUSE (II) OF SECTION 143(2) REQUIRING HIM TO ISSU E NOTICE U/S 143(2) WITHIN THE PERIOD OF SIX MONTHS FROM THE END OF FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. SUCH ACTION OF AO OF NON ISSUING OF N OTICE U/S 143(2) WHICH HAS BEEN OVERLOOKED BY LD. CIT(A) IS TOTALLY WRONG UNDER THE FACTS OF THE CASE. (2) THAT THE LD CIT(A) ERRED ON FACTS OF THE CASE A ND CONFIRMED THE REOPENING OF CASE U/S 147/148. THIS ACTION OF AO AND FURTHER CONFIRMED BY CIT(A) IS TOTALLY WRONG, ARBITRARY AND ILLEGAL UNDE R THE FACTS OF THE CASE. (3) THAT THE ADDITION MADE BY AO AND CONFIRMED BY C IT IS TOTALLY WRONG AND ILLEGAL ON THE FACTS OF THE CASE. (4) THAT THE LD CIT(A) ERRED ON FACTS OF THE CASE A ND CONFIRMED THE ADDITION MADE BY AO ON ACCOUNT OF UNDISCLOSED INCOME OF RS.15,OO,OOO/-. THE ADDITION MADE BY AO AND CONFIRMED BY CIT(A) IS TOTA LLY WRONG UNDER THE FACTS OF THE CASE. (5) THAT THE APPELLANT CRAVES TO LEAVE, ADD, ALTER OR AMEND ANY OF THE GROUND AT OR BEFORE HEARING. 3. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REFE RRING TO THE LEGAL GROUND NO.1,2 & 3 SUBMITTED THAT NOTICE U/S 1 43(2) OF THE ACT WAS NOT ISSUED TO THE ASSESSEE BEFORE COMMENCING TH E REASSESSMENT PROCEEDINGS AND THEREFORE IN VIEW OF T HE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF ACIT V/S SUKHA MANI COTTON INDUSTRIES AND OTHERS, I.T.A. NO.222/IND/2017 ORDER DATED 21.12.2018 THE IMPUGNED ASSESSMENT U/S 143(3) R.W.S . 147 OF THE VINOD KUMAR JAIN ITA NO. 318/IND/2017 3 ACT IS LIABLE TO BE QUASHED BEING BAD IN LAW AND VOID AB INITIO . 4. PER CONTRA DEPARTMENTAL REPRESENTATIVE THOUGH SU PPORTED THE ORDERS OF LOWER AUTHORITIES BUT COULD NOT CONTROVER T THE FACT THAT THE LD. ASSESSING OFFICER IS FAILED TO ISSUE NOTICE U/S 143(2) OF THE ACT TO THE ASSESSEE AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THROUGH GROUND NO. 1,2, & 3 ASSES SEE CHALLENGED THE LEGALITY OF THE REASSESSMENT PROCEEDINGS IN VIE W OF THE FACT THAT THE NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED. 6. WE OBSERVE THAT THE ASSESSEE EARNED INCOME FROM SALARY AND CONTRACT WORK AND FILED ITS INCOME TAX RETURN FOR A SSESSMENT YEAR 2006-07 ON 23.03.2007 DECLARING INCOME OF RS.4,22,3 60/- . SUBSEQUENTLY REASSESSMENT PROCEEDINGS WERE INITIATE D BY ISSUANCE OF NOTICE U/S 148 OF THE ACT DATED 21.5.2012 ALONG WITH ISSUANCE OF NOTICE U/S 142(1) OF THE ACT WHICH WERE DULY SERVED AND AFTER CONDUCTING THE REASSESSMENT PROCEEDINGS ADDITION OF RS.15,00,000/- WAS MADE ASSESSING INCOME AT RS.19,2 2,360/-. REVENUE HAS NOT CONTROVERTED THIS FACT THAT THE LD. A.O FAILED TO VINOD KUMAR JAIN ITA NO. 318/IND/2017 4 ISSUE THE NOTICE U/S 143(2) OF THE ACT BEFORE COMME NCING THE ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT. 7. NOW THE QUESTION BEFORE US IS WHETHER THE IMPUGN ED ORDER CAN BE HELD TO BE INVALID MERELY FOR NON ISSUANCE OF NO TICE U/S 143(2) OF THE ACT. WE OBSERVE THAT SIMILAR ISSUE CAME BEFORE US IN THE CASE OF ACIT V/S SUKHAMANI COTTON INDUSTRIES AND OTHERS (SU PRA) WHEREIN NOTICE U/S 148 OF THE ACT WAS ISSUED BUT THE LD. A. O FAILED TO ISSUE NOTICE U/S 143(2) OF THE ACT AND WE QUASHED THE REA SSESSMENT PROCEEDINGS BY FOLLOWING THE DECISION OF CO-ORDIN ATE BENCH, DELHI IN THE CASE OF ACIT VS. DIMENSION PROMOTERS PVT. LT D IN I.T.A.NO.1105/DEL/201,1 OBSERVING AS FOLLOWS; 13. WE, THEREFORE, RESPECTFULLY FOLLOWING THE JUDG MENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF SHREE JAI S HIV SHANKAR TRADERS PVT. LTD. (SUPRA) AS WELL AS DECISION OF CO ORDINATE BENCH OF DELHI IN THE CASE OF DIMENSION PROMOTERS P VT. LTD. (SUPRA) AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, ARE OF THE CONSIDERED OPINION THAT EVEN THOUGH NOTICE U /S 148 OF THE ACT HAS BEEN ISSUED BUT THE NOTICE U/S 143(2) OF THE ACT HAS NOT BEEN ISSUED IN THE CASE OF BOTH THE ASSESSEES NAMEL Y M/S.SUKHMANI COTTON INDUSTRIES PVT. LTD. & M/ S. MANJEET VINOD KUMAR JAIN ITA NO. 318/IND/2017 5 COTTON PVT. LTD. A FATAL ERROR HAS BEEN COMMITTED B Y LD. ASSESSING OFFICER AND THUS THE REASSESSMENT ORDER P ASSED U/S 147 R.W.S 143(3) OF THE ACT IS INVALID BAD IN LAW A ND VOID AB INITIO AND THUS LIABLE TO BE QUASHED. WE ACCORDINGLY, ALLO W THE COMMON GROUND NO.2 RAISED BY BOTH THE ASSESSEE IN T HE CROSS OBJECTIONS CHALLENGING THE VALIDITY OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT FOR NON-ISSUANCE OF NOTICE U/S 1 43(2) OF THE ACT. 8. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE CO- ORDINATE BENCH AS WELL AS IN THE GIVEN FACTS AND CI RCUMSTANCES OF THE CASE ARE OF THE CONSIDERED VIEW THAT THE IMPUGN ED REASSESSMENT ORDER IS LIABLE TO BE QUASHED BEING INVALID, BAD IN LAW AND VOID ABINITIO AS THE REVENUE AUTHORITIES POST ISSUANCE OF NOTICE U/S 148 OF THE ACT FAILED TO ISSUE STATUTORY NOTICE U/S 143 (2) OF THE ACT WHICH IS MANDATORY BEFORE COMMENCING THE ASSESSMENT PROCEEDINGS. IN THE RESULT GROUND NO. 1,2, & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. 9. GROUND NO.4 RELATES TO THE QUANTUM ADDITION WHIC H BECOMES INFRUCTUOUS AS WE HAVE ALREADY QUASHED REASSESSMENT PROCEEDINGS. VINOD KUMAR JAIN ITA NO. 318/IND/2017 6 10. GROUND NO.5 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.20 19. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 11 MARCH, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE