Swarna Kanta Parida, Bhubaneswar V. ITO,Ward-5(1), Bhubaneswar

ITA 337/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2986 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 22-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained investment; Principle of natural justice; Period of limitation; Reasonable cause; Tangible material; Time period of passing order; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 143(2); 264; 139(4); 13; 147; 148; 144

Judgement Text

P A G E 1 | 21 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 33 7 /CTK/201 9 ASSESSMENT YEAR : 2014 - 15 SWARNAKANTA PARIDA , PLOT NO.844, PALASUNI, BHUBANESWAR. VS. ITO, WARD 5(1), BHUBANESWAR. PAN/GIR NO. AHCPP 5022 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SIDHART H RAY , AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 16 / 09 / 20 20 DATE OF PRONOUNCEMENT : 20 / 1 1 /20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR DATED 18.3.2019 FOR THE ASSESSMENT YEAR 2014 - 15 . 2. THE APPEAL WAS TIME BARRED BY 132 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 22.10.2019 SUPPORTED BY AFFIDAVIT SWORN BY THE ASSESSEE STATING THAT THE FIRST APPELLATE ORDER DATED 18.3.2019 WAS RECEIVED BY THE ASSESSEE ON 11.4.2019 AND THE SEC OND APPEAL COULD HAVE BEEN FILED BY 11.6.2019 BUT THE APPEAL WAS FILED BEFORE THE TRIBUNAL ON 22.10.2019 CAUSING THE DELAY OF 132 DAYS. IT IS STATED THAT THE ASSESSEE WAS SERIOUSLY ILL AND WAS UNDERGOING MEDICAL TREATMENT FROM 5.6.2019 AND WAS ADVISED ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 2 | 21 COM PLETE BED REST BY THE DOCTOR AND, THEREFORE, HE WAS UNABLE TO DO HIS NORMAL ACTIVITIES. IT IS STATED THAT AFTER RECOVERING FROM THE ILLNESS ON 20.10.2019, THE ASSESSEE COULD ABLE TO CONTACT HER COUNSEL FOR PREPARATION AND FILING THE APPEAL AND IMMEDIATELY ON 22.10.2019, THE APPEAL WAS FILED. IT IS STATED THAT THE DELAY WAS UNINTENTIONAL AND, THEREFORE, DELAY BE CONDONED. LD D.R. OPPOSED THE CONDONATION PETITION. 3. AFTER HEARING THE RIVAL SUBMISSIONS, WE HAVE PERUSED THE CONDONATION AND NOTED THE REASONS STATED THEREIN CAUSING DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI (1987) 167 ITR 471 HAS HELD THAT THERE CAN BE NO PRESUMPTION OF DELIBERATENESS OR NEGLIGENCE OR M ALA FIDES IN CASE OF DELAY, BECAUSE LITIGANTS RUN A SERIOUS RISK WITHOUT ANY BENEFIT BY THE DELAY. THE JUDICIARY IS RESPECTED NOT FOR LEGALIZING INJUSTICE ON TECHNICAL GROUNDS BUT FOR REMOVING INJUSTICE. WE FIND THAT THE ASSESSEE HAD REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MST KATIJI (SUPRA), WE CONDONE THE DELAY OF 132 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 4 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (A) FOR THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) ACTED ILLEGALLY IN ADDING A SUM OF RS. 1,28,00,000/ - IN THE HANDS OF THE ASSESSEE - APPELLANT, THE VALUE DISCLOSED IN THE REGISTERED SALE DEE D AS UNDISCLOSED INVESTMENT PARTICULARLY WHEN THERE WAS NO SUCH ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 3 | 21 TRANSACTION AND THEREFORE THE ORDERS ARE VITIATED AND LIABLE TO BE DELETED. (B) FOR THAT THE CIT (A) - 2, BHUBANESWAR ERRED IN LAW AND WAS WHOLLY WRONG IN CONFIRMING THE ADDITION MADE BY THE AS SESSING OFFICER ON THE GROUND OF UNDISCLOSED INVESTMENT PARTICULARLY WHEN THERE WAS NO SUCH INVESTMENT MADE BY THE APPELLANT. (C) FOR THAT THE REASSESSMENT AS HAS BEEN MADE BY THE ASSESSING OFFICER U/S 147 OF THE I.T ACT, 1961 IS WITHOUT JURISDICTION AND WITHOUT ANY AUTHORITY OF LAW AND IS NOT MAINTAINABLE IN THE EYE OF LAW. (D) FOR THAT WHEN THERE WAS NO SUCH SALE CONSIDERATION AFFIRMED BY BOTH THE PARTIES, THE LEARNED ASSESSING OFFICER WITHOUT APPLICATION OF MIND AND IGNORING THE SUBMIS SIONS MADE BY THE APPELLANT FOLLOWING THE VALUE REPORTED IN THE SALE DEED SHOULD NOT HAVE TREATED THE SAME AS UNDISCLOSED INVESTMENT. (E) FOR THAT THE LEARNED ASSESSING OFFICER HAS COMMITTED GROSS ERROR OF LAW HOLDING THAT THE VALUE MENTIONED IN THE SALE DEED AS UNEXPLAINED INVESTMENT, PARTICULARLY WHEN THERE WAS NO SUCH INVESTMENT AT ALL. BOTHE THE VENDOR AND THE VENDEE FILED AFFIDAVITS BEFORE THE A.O, EXPLAINING THAT THE VALUE OF THE LAND AS MENTIONED IN THE SALE DEED IS ONLY FOR THE PURPOSE OF REGISTRAT ION, BUT IN FACT NO SUCH PAYMENT MADE, AS THE ASSESSEE/APPELLANT IS THE DAUGHTER IN LAW OF THE VENDOR SRI MAYADHAR PARIDA. (F) FOR THAT THE FORUMS BELOW ARE NOT JUSTIFIED MAKING ADDITION OF RS. 1,28.00.000.00 UNDER THE HEAD' UNEXPLAINED INVESTMENT', PARTI CULARLY WHEN THE APPELLANT IS A HOUSE WIFE AND HAS NO SOURCE OF INCOME OTHER THAN THE DECLARED HOUSE PROPERTY INCOME AND THEREFORE THE ADDITION AS MADE BY THE A.O AND CONFIRMED BY THE CIT (A) - 2, BHUBANESWAR IS ILLEGAL, ARBITRARY, ERRONEOUS AND WITHOUT ANY BASIS AND HENCE IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. (G) FOR THAT THE ADDITION OF RS. 1,28.00.000.00 AS HAS BEEN MADE BY THE A.O AND CONFIRMED BY THE CIT (A) IS NOT SUSTAINABLE IN THE EYE OF LAW, BECAUSE OF THE FACT THAT THE APPELLANT IS IN CAPABLE FOR MAKING SUCH HUGE INVESTMENT AND THE SAME IS LIABLE TO BE DELETED. (H) FOR THAT THE ORDER PASSED BY THE CIT (A) CONFIRMING THE ORDER OF ASSESSMENT IS ILLEGAL, ARBITRARY, ERRONEOUS AND NOT SUSTAINABLE IN THE EYE OF LAW AND IS LIABLE TO BE QUASHE D IN THE INTEREST OF JUSTICE. ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 4 | 21 5 . ALTHOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING, HE PRAYED BEFORE THE BENCH THAT FIRST THE GROUND NO.C, WHICH IS A LEGAL GROUND, MAY BE TAKEN UP FOR HEARING, TO WHICH, LD D.R. HAD NO OBJECTION. HENCE, WE PROCEED TO ADJUDICATE THE LEGAL GROUND. 6 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DERIVES INCOME FROM HOUSE PROPERTY. SHE FILED HER RETURN OF INCOME ON 16.9.2015 DECLARING TOTAL INCOME AT RS.3,92,560/ - . THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, ON 21.10.2015. ON THE BASIS OF AN INFORMATION RECEIVED FROM SUB - REGISTRAR, KHURDA, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD PURCHASED TWO PLOTS OF LAND FROM SHRI MAYADHAR PARIDA OF PAN DARA SAMITI, PALASUNI, PO: RASULGARH, BHUBANESWAR FOR A TOTAL CONSIDERATION OF RS.1,28,00,000/ - DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER OBSERVED THAT IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN GROSS RENT OF RS.5,60,800/ - , BEING THE ONLY SOURCE OF INCOME. FROM THE ABOVE FACTS, THE AO DISBELIEVED THE CAPACITY OF THE ASSESSEE TO PURCHASE THE PLOTS BY INVESTING HUGE AMOUNT AS THE ASSESSEE DID NOT HAVE ANY SOURCE OF INCOME . THEREFORE, THE AO PROPOSED TO REOPEN THE ASSESSMENT AND ISSUED NOTICE U/S. 148 OF THE I.T.ACT DATED 25.1.2016 TO THE ASSESSEE TO FILE HER RETURN OF INCOME . THE ASSESSEE, IN RESPONSE TO NOTICE U/S.148 OF THE ACT, DID NOT FILE RETURN OF INCOME BUT FILE A COPE OF SALE DEED M ADE BETWEEN THE VENDOR SHRI MAYADHAR PARIDA AND VENDEE SMT. SWARNAKANTA PARIDA. BEFORE THE AO, THE ASSESSEE AND SHRI MAYADHAR PARIDA ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 5 | 21 FILED AFFIDAVITS MADE BEFORE THE NOTARY PUBLIC, BHUBANESWAR. FROM THE SALE DEED MADE ON 9.7.2013, THE AO NOTICED THAT MAYA DHAR PARIDA HAS RECEIVED SALE CONSIDERATION OF RS.1,28,00,000/ - BY CHEQUES AND CASH FROM THE ASSESSEE AS FULL AND FINAL CONSIDERATION. HOWEVER, ON PERUSAL OF AFFIDAVIT, IT IS ADMITTED THAT THERE WAS NO MONETARY TRANSACTION AGAINST THE SALE CONSIDERATION A ND THE SALE DEED WAS EXECUTED OUT OF FAMILY RELATION. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER OBSERVED THAT BOTH THESE DOCUMENTS ARE CONTRADICTING EACH OTHER AND SINCE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF INVESTMENT OF RS.1,28,00,000/ - , THE AO DID NOT ACCEPT THE AFFIDAVIT AND TREATED THE SALE CONSIDERATION OF RS.1,28,00,000/ - WAS UNEXPLAINED INVESTMENT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY, THE AO PASSED REASSESSMENT ORDER U/S.144/147 OF THE ACT ON 19.12.20 16 , DETERMINING THE TOTAL INCOME AT RS.1,31,92,560/ - . 7 . BEFORE THE LD CIT(A), THE ASSESSEE CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICER TO ISSUE NOTICE U/S.148 OF THE ACT AND CONTENDED THAT WHEN THE TIME FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT HAD NOT EXPIRED, THE ASSESSMENT FRAMED U/S.147 OF THE ACT IS INVALID. FOR THIS PROPOSITION, THE ASSESSEE HAD RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS QUATALYS SOFTWARE TECHNOLOGIES LTD. 308 ITR 249 (MAD) AND THE DECISION OF ITAT CUTTACK IN THE CASE OF ASHOK KUMAR DEY IN ITA NO.194/CTK/2015 FO R A.Y. 2007 - 08. THE LD CIT(A) AFTER REFERRING THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS ABAD FISHERIES, ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 6 | 21 40 TAXMANN.COM 125 (KERALA) AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS RAJESH JHAVERI STOCK BROKERS PVT LT D, 291 ITR 500 (SC) AFFIRMED THE REOPENING OF ASSESSMENT U/S.147 OF THE ACT AND REJECT THE LEGAL GROUND TAKEN BY THE ASSESSEE. ON MERITS ALSO, LD CIT(A) CONFIRMED THE ADDITION. 8 . BEFORE US, LD A.R. OF THE ASSESSEE SUBMITTED THAT NOTICE U/S.148 OF THE ACT WAS ISSUED ON 25.1.2016 EVEN WHEN TIME OF ISSUE OF NOTICE U/S.143(2) OF THE ACT HAD NOT EXPIRED. HE SUBMITTED THAT THE TIME LIMIT FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT WAS UPTO 30 TH SEPTEMBER, 2016. HE FURTHER SUBMITTED THAT BEFORE THE LOGICAL TE RMINATION OF ORIGINAL RETURN FILED BY THE ASSESSEE, THE REASSESSMENT PROCEEDING U/S.147 OF THE ACT WAS INVOKED AND FINALLY THE ORDER WAS PASSED ON 19.12.2016. 9 . LD A,R SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE FULL BENC H DECISION OF HONBLE HIGH COURT OF ORISSA IN THE CASE OF JAYANARAYAN KEDARNATH AND ANOTHER VS SALES TAX OFFICER, REPORTED IN 68 STC 2 5 (ORISSA). LD A.R. SUBMITTED THAT THE FACTS ARE IN PARI MATERIA WITH THE PRESENT CASE. IN THE SAID CASE BEFORE THE DISP OSAL OF THE RETURN UNDER THE OST ACT, REASSESSMENT PROCEEDING WAS INITIATED, WHICH WAS CHALLENGED BY THE PETITIONER BEFORE THE HON'BLE HIGH COURT OF ORISSA. A THREE 3 JUDGES BENCH OF THE JURISDICTIONAL HIGH COURT WHILE OVERRULING AN EARLIER ORDER OF THE HON'BLE HIGH COURT OF ORISSA IN THE CASE OF STATE OF ORISSA VS. SRI SANATAN POTHAL REPORTED IN 31 STC 632 , HELD AS UNDER: ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 7 | 21 'IT IS, THEREFORE, OBVIOUS THAT THE ASSESSMENT PROCEEDING IN QUESTION WAS TO BE COMPLETED BY 31 ST MARCH, 1978 AND NOT LATER THAN THAT. SUB - SECTION (8), WHICH IS ALMOST IN PARI MATERIA WITH SECTION 147 OF THE INCOME - TAX ACT, 1961, COVERS THE CASE OF 'ESCAPED ASSESSMENT' OR 'UNDERASSESSMENT' OR 'UNAUTHORIZED COMPOUNDING 'OF TAX. IT EMPOWERS THE COMMISSIO NER AT ANY TIME WITHIN THIRTY - SIX MONTHS (NOW FIVE YEARS) FROM THE EXPIRY OF THE YEAR TO WHICH THE ASSESSMENT RELATES TO CALL FOR RETURNS UNDER SUB SECTION (1) OF SECTION 11 AND PROCEED TO ASSESS THE AMOUNT OF TAX DUE FROM THE DEALER IN THE MANNER LAID DOW N IN SUB - SECTION (5) OF THIS SECTION' IF FOR ANY REASON THE TURNOVER OF A DEALER FOR ANY PERIOD HAS ESCAPED ASSESSMENT OR HAS BEEN UNDER - ASSESSED'. IT IS NOT NECESSARY TO REFER TO RULE 23 OF THE RULES WHICH PRESCRIBES A FORM OF THE NOTICE AND THE RETURN TO BE FILED BY THE DEALER.' FURTHER, THE HON'BLE COURT AT PARA - 6 OF THE JUDGMENT HELD THAT - 'WE HAVE SIMPLY TO EXAMINE THE SCOPE AND AMBIT OF SUB - SECTION (8) OF SECTION 12. THE SCHEME OF THIS PROVISION CONTEMPLATES CASES WHERE THE TURNOVER OF A DEALE R FOR ANY PERIOD HAS ESCAPED ASSESSMENT OR HAS BEEN UNDER ASSESSED. IT WAS SUBMITTED THAT THE PETITIONER'S CASE DID NOT FALL UNDER THE MISCHIEF OF THIS PROVISION INASMUCH AS THE ASSESSMENT PROCEEDING BEING STILL INCOMPLETE AND IN A STAGE OF FINALIZATION, I T COULD NOT BE A CASE OF UNDER ASSESSMENT MUCH LESS OF ESCAPED ASSESSMENT. WITH RESPECT TO THE GROUNDS AND REASONS ADVANCED IN THE COUNTER - AFFIDAVIT THAT SOME 'FRAUD REPORT' HAVING BEEN RECEIVED IN THE MEANTIME, IT WAS SUBMITTED THAT THE ASSESSING AUTHORIT Y, EVEN IF HE REQUIRED MORE TIME TO COMPLETE THE ASSESSMENT ON THE BASIS OF THE SAID REPORT IN REGULAR COURSE ON APPLYING THE PRINCIPLES OF NATURAL JUSTICE IN EXTENSO, HE SHOULD HAVE IN THE FIRST INSTANCE COMPLETED THE REGULAR ASSESSMENT WITHIN THE PRESCRI BED PERIOD OF THREE YEARS FOR WHICH HE HAD ENOUGH TIME AND COULD HAVE INITIATED THE PROCEEDING UNDER SECTION 12(8) WITHIN THE PERIOD OF LIMITATION FOR COMPLETION OF WHICH NO OUTER PERIOD WAS FIXED. IT IS OBVIOUS FROM THE LANGUAGE AND SCOPE OF SECTION 12(8) THAT IT IS A SPECIAL PROVISION DEALING WITH THE ASSESSMENT OR ESCAPED TAX EVEN THOUGH THE ESCAPEMENT MAY BE THE RESULT OF A MISTAKE COMMITTED BY THE ASSESSING OFFICER HIMSELF.' 10 . LD A.R. SUBMITTED THAT APPLYING THE RATIO LAID DOWN BY THE FULL BENCH OF THE HON'BLE HIGH COURT OF ORISSA , THE INITIATION OF THE REASSESSMENT PROCEEDING AS WELL AS COMPLETION OF THE REASSESSMENT U/S 144/147 OF THE ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 8 | 21 I.T ACT, 1961 IS NOT SUSTAINABLE. HE ALSO REFERRED TO THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF QATALYS SOFTWARE TECHNOLOGIES LTD (SUPRA) AND K.M. PACHAYAPPAN (SUPRA) WHERE SIMILAR VIEW HAS BEEN EXPRESSED. THE RELEVANT PORTION OF THE SAID DECISION IS QUOTED BELOW - 'THEREFORE, A VALID RETURN OF INCOME WAS PENDING AS ON MARCH 15, 2000.THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 ON MARCH 15, 2000 WHEN A VALID RETURN UNDER SECTION 139(4) WAS PENDING. IN THIS CASE, THE RETURN WAS FILED AND THE SAME IS PENDING, WHICH MEANS THAT THE PROCEEDING IS STILL PENDING. IN SUCH A SITUATION, THE REVENUE COULD NOT HAVE ISSUED NOTICE FOR THE PURPOSE OF REOPENING UNDER SECTION 147 OF THE ACT. IN THE CASE OF TRUSTEES OF H.E.H. THE NIZAM'S SUPPLEMENTAL FAMILY TRUST V. CIT ( 2000) 242 ITR 381, THE SUPREME COURT CONSIDERED THE SCOPE OF REOPENING THE ASSESSMENT.' 11 . LD A.R. SUBMITTED THAT WHEN THE RETURN WAS PENDING AND THE TIME FOR ASSESSMENT WAS NOT OVER, IT WAS PREMATURE ON THE PART OF THE ASSESSING OFFICER IN INVOKING JURISDI CTION CONFERRED U/S 147 OF THE I.T ACT AND COMPLETING THE ASSESSMENT U/S 144/147 OF THE IT ACT EVEN WITHOUT ISSUING A SHOW CAUSE NOTICE WHICH IS REQUIRED U/S 144 OF THE IT ACT, 1961 AND THE ASSESSING OFFICER PROPOSES TO MAKE A BEST JUDGEMENT ASSESSMENT. TH EREFORE, THE CIT(A) WAS TOTALLY INCORRECT AND COMMITTED GROSS ERROR OF LAW IN UPHOLDING THE ORDER OF REASSESSMENT PASSED U/S 144/147 OF THE IT ACT ,1961. HE SUBMITTED THAT BEFORE ASSUMING THE JURISDICTION, U/S L47 OF THE IT ACT, THE AO HAS TO FOLLOW THE M ANDATORY PROCEDURE AS IS LAID U/S 143(2), PARTICULARLY WHEN HE IS DISBELIEVING THE INCOME RETURNED BY THE ASSESSEE. HE SUBMITTED THAT W HEN THE ORIGINAL RETURN WAS PENDING WITH THE DEPARTMENT AND A NOTICE U/S 148 WAS ISSUED THERE WAS NO NEED ON THE PART ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 9 | 21 OF THE ASSESSEE TO FILE ANOTHER RETURN. HE SUBMITTED THAT THE AO CANNOT BY PASS THE PROVISIONS AS CONTAINED U/S 143(2) OF THE IT ACT, WHICH RENDERS AN ASSESSMENT ORDER COMPLETELY NULL & VOID. THEREFORE, THE ORDER PASSED U/S.147 OF THE ACT IS WITHOUT JURISDI CTION AND IS LIABLE TO BE QUASHED. 1 2 . HE FURTHER RELIED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR. CIT VS GOVIND GOPAL GOYAL IN R/TAX APPEAL NO.300 OF 2019 ORDER DATED 15.7.2019, WHEREIN, IT WAS HELD THAT UNLESS THE RETURN OF INCOME ALREADY FILED IS DISPOSED OF, THE NOTICE FOR REASSESSMENT UNDER SECTION 148 OF THE ACT CANNOT BE ISSUED I.E. NO REASSESSMENT PROCEEDINGS CAN BE INITIATED SO LONG AS THE ASSESSMENT PROCEEDINGS PENDING ON THE BASIS OF THE RETURN ALREADY FILED ARE NOT TERMINATED. IT IS ALSO HELD THAT IF AN ASSESSMENT IS PENDING EITHER BY WAY OF ORIGINAL ASSESSMENT OR BY WAY OF REASSESSMENT PROCEEDINGS, THE AO CANNOT ISSUE A NOTICE UNDER SECTION 148M BUT IF NO PROCEEDINGS ARE PENDING EITHER BY WAY OF ORIGINAL ASSESSMENT OR BY WAY OF REASSESSMENT, HE CAN ISSUE A NOTICE UNDER SECTION 148 OF THE ACT WITHIN THE TIME AS STIPULATED. IN VIEW OF ABOVE, LD A.R. SUBMITTED THAT SINCE THE TIME FOR ISSUE OF NOTICE U/S.143(2) HAD NOT EXPIRED, ISSUE OF NOTICE U/S.148 OF THE ACT IS INV ALID AND, SAME SHOULD BE QUASHED AND CONSEQUENTLY, ASSESSMENT U/S.147 OF THE ACT SHOULD ALSO BE ANNULLED. 1 3 . REPLYING TO ABOVE, LD DR SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER IN INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 10 | 21 ISSUANC E OF NOTICE U/S.148 OF THE ACT HAS BEEN DONE IN ACCORDANCE WITH THE VALID JURISDICTION CONFERRED ON HIM UNDER THE SAID PROVISIONS OF THE ACT. LD DR ALSO SUBMITTED THAT THERE IS NO REQUIREMENT OF LAW THAT IN CASE THE STATUTORY PERIOD OF ISSUANCE OF NOTICE U/S.143(2) OF THE ACT HAS NOT BEEN EXPIRED, THEN, THE AO HAS NO VALID JURISDICTION TO INITIATE REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT. LD D.R. SUBMITTED THAT AFTER PROCESSING THE RETURN OF INCOME U/S.143(1) O F THE ACT ON 21.10.2015, THE AO RECEIVED AN INFORMATION RECEIVED FROM SUB - REGISTRAR, KHURDA, THAT THE ASSESSEE HAD PURCHASED TWO PLOTS OF LAND FROM SHRI MAYADHAR PARIDA OF PANDARA SAMITI, PALASUNI, PO: RASULGARH, BHUBANESWAR FOR A TOTAL CONSIDERATION OF R S.1,28,00,000/ - DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER FROM THE RETURN OF INCOME, OBSERVED THAT THE ASSESSEE HAS SHOWN GROSS RENT OF RS.5,60,800/ - , BEING THE ONLY SOURCE OF INCOME. THEREFORE, THERE WAS CLEAR ESCAPEMENT OF INCOME AND T HE AO WAS RIGHT IN INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT. THEREFORE, THE LEGAL GROUND OF THE ASSESSEE IS NOT TENABLE AND SUSTAINABLE. LD SR. DR ALSO SUBMITTED THAT IN RESPONSE TO NOTICE U/S.148 O F THE ACT, THE ASSESSEE NEITHER RESPONDED NOR FILED ANY RETURN OF INCOME. THEREFORE, THE ASSESSEE IS NOT ENTITLED TO AGITATE ANY LEGAL GROUND INCLUDING LEGAL CONTENTION THAT THE AO HAS NO POWER TO INITIATE REASSESSMENT PROCEEDINGS BEFORE EXPIRY OF TIME LI MIT FOR ISSUANCE OF NOTICE U/S.143(2) OF THE ACT. ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 11 | 21 1 4 . PLACING REJOINDER TO ABOVE, LD A.R. SUBMITTED THAT WHEN THE PRESCRIBED TIME LIMIT FOR ISSUING NOTICE U/S143(2) OF THE ACT WAS NOT EXPIRED AND ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE WAS PENDING WITH THE AO, THEN IT WAS NOT REQUIRED TO FILE ANOTHER RETURN IN RESPONSE TO NOTICE U/S.148 OF THE ACT AS THE INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT WAS VOID AB INITIO AND BAD IN LAW IN VIEW VARIOUS DECISIONS OF HONBLE SUPREME COURT AND HONBLE HIGH COURTS INCLUDING THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYANARAYAN KEDARNATH (SUPRA) AND THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF QA TALYS SOFTWARE TECHNOLOGIES LTD. (SUPRA) AND THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF GOVIND GOPAL GOYAL (SUPRA). LD COUNSEL SUMMED UP HIS ARGUMENTS BY STATING THAT LEGAL ISSUE AGITATED BY THE ASSESSEE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE BY THE SAID DECISIONS. THEREFORE, INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT AND ALL CONSEQUENT PROCEEDINGS AND ORDERS MAY KINDLY BE QUASHED BEING VOID AB INITIO AND BAD IN LAW. 1 5 . ON CA REFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, UNDISPUTEDLY, THE ASSESSEE FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2014 - 15 ON 16.9.2015 DECLARING TOTAL TAXABLE INCOME AT RS.3,92,560/ - , WHICH WAS PROCESSED U/S.143(1) OF THE ACT ON 20.12.2015. KEEPING IN VIEW THE DATE OF FILING OF RETURN OF INCOME AND RELEVANT ASSESSMENT YEAR 2014 - 15 UNDER ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 12 | 21 CONSIDERATION, IT IS ALSO NOT IN DISPUTE THAT THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S.143(20 WAS UPTO 30 TH SEPTEMBER, 2016. THESE FACTS HAVE NOT BEEN CONTROVERTED BY LS DR BEFORE THE BENCH. 1 6 . AT THUS JUNCTURE, WE TAKE RESPECTFUL COGNIZANCE OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYANARAYAN KEDARNATH (SUPRA), WHEREIN, THEIR LORDSHIPS IN PARA 6, IN A CASE OF SALES TAX ASSESSMENT, HELD THAT IN THE FIRST INSTANCE, THE OFFICER SHOULD COMPLETE THE REGULAR ASSESSMENT WITHIN THE PRESCRIBED PERIOD OF THREE YEARS FOR WHICH HE HAD ENOUGH TIME AND COULD HAVE IN ITIATED THE PROCEEDING UNDER SECTION 12(8) OF ORISSA SALES TAX ACT, 1947. IN THE SAME JUDGMENT, HONBLE HIGH IN PARA 5 ALSO MADE IT CLEAR THAT SUB SECTION (8) OF SECTION 12 OF OST ACT, 1947 IS ALMOST PARI MATERIA WITH SECTION 147 OF THE INCOME TAX ACT, 19 61, WHICH COVERS THE CASE OF ESCAPED ASSESSMENT OR UNDERASSESSMENT OR UNAUTHORIZED COMPOUNDING OF TAX. 1 7 . FURTHER, HONBLE MADRAS HIGH COURT IN THE CASE OF QATALYS SOFTWARE TECHNOLOGIES LTD. (SUPRA) REFERRING TO ITS EARLIER DECISION IN THE CASE OF CIT VS K.M.PANCHAYAPPAN, 304 ITR 264 (MAD) HELD THUS: APPLYING THE PRINCIPLES ENUNCIATED IN THE JUDGMENTS OF THE SUPREME COURT AS WELL AS THE DELHI HIGH COURT, CITED SUPRA, THE TRIBUNAL IS RIGHT IN COMING TO A CONCLUSION THAT NO ACTION COULD BE INITIATED UNDER SECTION 147 OF THE ACT, WHEN THERE IS A PENDENCY OF THE RETURN BEFORE THE AO. THE REASONS GIVEN BY THE TRIBUNAL ARE BASED ON VALID MATERIALS AND EVIDENCE AND WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE TRIBUNAL SO AS TO WARRANT INTER FERENCE. ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 13 | 21 1 8 . FURTHERMORE , THEIR LORDSHIPS SPEAKING FOR HONBLE GUJARAT HIGH COURT IN THE CASE OF GOVIND GOPAL GOYAL (SUPRA) IN PARAS 16 & 17, HELD THUS: 16 . IN THE OVERALL VIEW OF THE MATTER, WE ARE CONVINCED THAT THE TRIBUNAL APPLIED THE CORRECT PRINCIPLE OF LAW AND PASSED THE IMPUGNED ORDER. WE MAY ONLY SAY THAT SECTION 142(1) AND SECTION 148 OF THE ACT CANNOT OPERATE SIMULTANEOUSLY. THERE IS NO DISCRETIO N VESTED WITH THE ASSESSING OFFICER TO UTILIZE ANY ONE OF THEM. SUCH A VIEW WOULD BE DIRECTLY OPPOSED TO THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, BOMBAY CITY, I, BOMBAY V. M/S. NARSEE NAGSEE AND CO. BOMBAY, REPORTED IN M ANU/SC/0093/1960 : AIR 1960 SC 1232. THE VERY SAME CONTENTION WAS RAISED BEFORE THE SUPREME COURT AND WAS SPECIFICALLY REJECTED. THE TWO PROVISIONS GOVERN DIFFERENT FIELDS AND CAN BE EXERCISED IN DIFFERENT CIRCUMSTANCES. IF INCOME ESCAPES ASSESSMENT, THEN THE ONLY WAY TO INITIATE ASSESSMENT PROCEEDINGS IS TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT. IN FACT, IF NOTICE HAS ALREADY BEEN ISSUED UNDER SECTION 142 OF THE ACT AND THE PROCEEDINGS ARE PENDING, IT LOOKS ABSURD TO CALL FOR A RETURN UNDER SECTION 14 8 OF THE ACT. 17. IT IS SETTLED LAW THAT INCOME CANNOT BE SAID TO HAVE ESCAPED ASSESSMENT WHEN THE ASSESSMENT PROCEEDINGS ARE PENDING. 1 9 . SO FAR AS THE CONTENTION OF LD D.R. THAT THERE WAS ESCAPEMENT OF INCOME BY THE ASSESSEE AND THERE WAS NEW MATERI AL IN THE HANDS OF THE ASSESSING OFFICER FOR INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT AND THE REVENUE SUFFERED LOSS DUE TO THIS ESCAPEMENT OF INCOME BY THE ASSESSEE IS CONCERNED, WE RESPECTFULLY TAKE COGNIZANCE OF THE OBSERVATIONS MADE BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WORKS CO LTD VS INCOME TAX OFFICER, CIRCLE - 1, WARD A, RAJKOT, 106 ITR 1 (SC), WHICH READ THUS: ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 14 | 21 IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THAT WE PAY FOR CI VILIZATION. IF SO, IT IS ESSENTIAL THAT THOSE WHO ARE ENTRUSTED WITH THE TASK OF CALCULATING AND REALIZING THAT PRICE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL - VERSED WITH THE LAW ON THE SUBJECT. ANY REMISSNESS ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQUER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. THEREFORE, THIS CONTENTIONS OF LD DR ARE DISMISSED ON LOSS OF REVENUE. 20. DURING THE COURSE OF ARGUMENTS, LD DR CONTENDED THAT EXPRESSION IN CLAUSE (B) OF EXPLANATION (2) TO SECTION 147 OF THE ACT THAT NO ASSESSMENT HAS BEEN MADE MEANING THAT IT ALSO INCLUDES SITUATION WHERE ASSESSMENT ORDER U/S.143(3) OF THE ACT IS S TILL POSSIBLE BUT YET NOT MADE AND THE RETU RN OF INCOME HAS BEEN PROCESSED U/S.143 ( 1) OF THE ACT. IF THIS INTERPRETATION IS ACCEPTED, IT WILL DESTROY THE FUNDAMENTAL PRINCIPLES UNDERLYING FOR ASSUMPTION OF VALID JURISDICTION FOR INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT, WHICH ARE BEING CONSISTENTLY FOLLOWED TILL DATE BY HONBLE SUPREME COURT, VARIOUS HONBLE HIGH COURTS AND CO - ORDINATE BENCHES OF THIS TRIBUNAL. THESE PRINCIPLES ARE ALSO APPLICABLE TO THE EXTENDED MEANING GIVEN TO THEM BY WAY OF USING EXPRESSION NO ASSESSMENT HAS BEEN MADE IN CLAUSE (B) OF EXPLANATION (2) TO SECTION 147 OF THE ACT BY WAY OF AMENDED PROVISION. 21. IN OUR HUMBLE UNDERSTANDING, SAID CLAUSE IS INTENDED TO COVER TWO SITUATIONS VIZ; (I) WHERE A RETURN IS FILED AND NO ACTION IS TAKEN EITHER U/S.143(1) OR U/S.143(3) AND TIME FOR ISSUING NOTICE U/S.143(2) HAS EXPIRED AND (II) WHERE A RETURN IS FILED AND IS PROCESSED U/S.143(1) OF THE ACT BUT ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 15 | 21 THE TIME LIMIT AS PER PROVISIONS OF THE ACT FOR ISSUE OF NOTICE U/S.143(2) HAS NOT BEEN EXPIRED, IT DOES NOT ENVIS AGE A SITUATION WHERE A RETURN IS FILED AND THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS NOT EXPIRED. IN OUR CONSIDERED VIEW, UNLESS THE RETURN FILED BY THE ASSESSEE IS SCRUTINIZED BY THE AO BY WAY OF ISSUING NOTICE U/S.143(2) OF THE ACT, HE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT OF INCOME BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR. IF THE AO ISSUES NOTICE U/S.143(2) OF THE ACT, OBVIOUSLY, HE WOULD SCRUTINIZE THE RETURN AND FRAME THE ASSESSMENT U/S.143(3) OF THE ACT AND, THE REAFTER, ORIGINAL ASSESSMENT PROCEEDINGS WOULD BE CLOSED OR TERMINATED. SUBSEQUENTLY, IF THE AO NOTICE ESCAPEMENT OF INCOME , ON THE BASIS OF SOME NEW TANGIBLE MATERIAL, WHICH WAS NOT BEFORE HIM DURING ORIGINAL ASSESSMENT PROCEEDINGS, THEN HE HAS REASON TO BELIEVE THAT THERE IS ESCAPEMENT OF ASSESSMENT AND HE MAY ASSUME VALID JURISDICTION FOR INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT. 22. IN ADDITION TO THAT, IN ABOVE TWO SITUATIONS, HE WILL ALSO HAVE TO LOOK INTO THE RETURN AND RECORDS OF ORIGINAL ASSESSMENT PROCEEDINGS, TO SEE WHETHER THERE IS ESCAPEMENT OR NOT. IN SUCH A SITUATION WHEN AFTER PROCESSING THE RETURN U/S.143(1) OF THE ACT , THE AO NOTICE S ANY ESCAPEMENT OF ASSESSMENT, AND THE PRESCRIBED TIME LIMIT FOR ISSUANCE OF NOTICE U/S.143(2) OF THE ACT HAS NOT BEEN EXPIRED THEN THE ONLY VALID RECOURSE ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 16 | 21 AVAILABLE TO HIM IS TO ISSUE NOTICE U/S.143(2) OF THE ACT . TO SUM UP, THE ASSESSM ENT PROCEEDINGS ARE SAID TO BE COMMENDED ONCE THE RETURN IS FILED AND THE PROCEEDINGS TERMINATE WHEN EITHER THE RETURN IS PROCESSED U/S.143(1) OF THE ACT OR SCRUTINY ASSESSMENT PROCEEDINGS ARE CLOSED BY WAY OF PASSING ORDER U/S.143(3) OF THE ACT OR IF NO NOTICE U/S.143(2) OF THE ACT HAS BEEN ISSUED AND PRESCRIBED TIME LIMITATION PERIOD AS PER RELEVANT PROVISIONS THE ACT TO ISSUE NOTICE U/S.143(2) IS OVER. MEANING THEREBY THE ASSESSMENT PROCEEDINGS ARE DEEMED TO BE OVER OR TERMINATED WHEN (A) THE RETURN I S PROCESSED U/S.143(1) OF THE ACT OR (B) SCRUTINY ASSESSMENT ORDER IS FRAMED U/S.143(3) OF THE ACT OR (C) THE TIME LIMIT FOR ISSUE OF NOTICE U/S.143(2) OF THE ACT IS EXPIRED AND THEREBY THE ASSESSMENT IS NO LONGER POSSIBLE 143(3) OF THE ACT . THUS, THE AS SESSMENT PROCEEDINGS U/S.147 OF THE ACT CAN BE INITIATED ONLY AFTER THE EARLIER ASSESSMENT PROCEEDINGS ARE TERMINATED BY WAY OF ANY OF THE ONE OF THE THREE MODES AS NOTED ABOVE. THEREFORE, WE ARE NOT IMPRESSED WITH THE CONTENTIONS OF THE LD SR DR AND W E DISMISS THE SAME IN VIEW OF AFORESAID LEGAL POSITION AND PREPOSITIONS RENDERED BY HONBLE HIGH COURTS IN THE ABOVE NOTED DECISIONS AND JUDGMENTS. 23. THE CO - ORDINATE BENCH OF ITAT, HYDERABAD IN THE CASE OF SRI VENKATA SIVA REDDY NELLORE VS ITO IN ITA NO.962/HYD/2017 FOR A.Y. 2012 - 13 DATED 22.11.2017, AS HEAVILY RELIED BY THE LD AR, AFTER REFERRING TO THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CAS E OF QATALYS SOFTWARE ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 17 | 21 TECHNOLOGIES LTD (SUPRA) AND K.M.PACHAYAPPAN (SUPRA) IN PARA 8.1 HELD THUS: 8.1 THE FACTS INDICATE THAT THE ASSESSEE FILED RETURN OF INCOME ON 26.7.2013 FOR A.Y. 2012 - 13, EVEN THOUGH BELATEDLY AS TO THE TIME PRESCRIBED U/S.139(1), BU T WITHIN THE TIME PROVIDED U/S.139. ON RECEIPT OF RETURN, AO HAS TIME TO ISSUE NOTICE U/S.143(2)/142(1) FOR A PERIOD OF SIX MONTHS, I.E. UPTO 31.1.2014. HOWEVER, AO CHOSE TO REOPEN THE ASSESSMENT ON THE REASON OF INCOME ESCAPING ASSESSMENT ON 12.12.2013, WHEN THE ASSESSMENT PROCEEDINGS HAVE NOT EVEN BEEN STARTED. ON THE ISSUE WHETHER THE PROCEEDINGS U/S.147 ARE CORRECT WHEN A NOTICE U/S.143(2) COULD HAVE BEEN ISSUED WAS CONSIDERED BY THE CO - ORDINATE BENCH. THE CO - ORDINATE BENCH IN THE CASE OF M/S. EANADU RELIEF FUND VS DDIT (E) IN ITA NO.434/HYD/2010 DT.13.1.2011 (QUOTED BEFORE THE LD CIT(A) IN WRITTEN SUBMISSIONS) BY ASSESSEE HELD AS UNDER: 9.3 RETURN FILED FOR ASSESSMENT YEAR 1994 - 95 ON 28.3.1996 AND THE SAME WAS PROCESSED U/S.143(1). LATER 148 NOTIC E WAS ISSUED ON 18.6.1996 THOUGH TIME AVAILABLE FOR ISSUE OF NOTICE U/S.143(2) WAS UPTO 31.3.1997. 9.4 IN THE CASE OF CIT VS QATALYS SOFTWARE TECHNOLOGIES LTD, (308 ITR 249), THE MADRAS HIGH COURT HELD THAT REOPENING IS IMPROPER WHEN THE TIME LIMIT IS AVA ILABLE TO ISSUE NOTICE U/S.143(2). AS SEEN FROM THE ABOVE, IN THE CASE OF K.M.PACHAYAPPAN, 304 ITR 264 AND QATALYS SOFTWARE TECHNOLOGIES LTD, 308 ITR 249, MADRAS HIGH COURT BY PLACING RELIANCE ON THE JUDGMENT OF SC IN THE CASE OF RAJESH JHAVERI (SUPRA) HE LD THAT THE AO WAS BARRED FROM INITIATING ASSESSMENT PROCEEDINGS U/S.147 WHEN THE TIME FOR ISSUANCE OF NOTICE U/S.143(2) HAD NOT EXPIRED. HOWEVER, TAKEN A DIFFERENT VIEW IN THE CASE OF ITO VS K.M PACHIYAPPAN , 311 ITR 31, (MAD) UPHELD THAT THE AO IN INIT IATING THE PROCEEDINGS U/S.147 IN SIMILAR CIRCUMSTANCES. HOWEVER, IT APPEARS THAT THE IMPORTANT DISTINCTION IN FACT OF THESE TWO CASES NAMELY TIME AVAILABLE FOR ISSUE OF NOTICE U/S.143(2) HAD NOT EXPIRED IN THE CASE OF K.M.PACHIPPAN, 311 ITR 31 HAS NOT PL ACED BEFORE THE MADRAS HIGH COURT. FURTHER, THE TRIBUNAL IN THE CASE OF SUPER SPINNING MILLS LTD VS ADDL. CIT, TRIBUNAL TAX REPORTED (3 RD MEMBER)(CHENNAI) HELD THAT: ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 18 | 21 THE DEPARTMENT WANTS TO INTERPRET THE EXPRESSION NO ASSESSMENT HAS BEEN MADE IN CLAU SE (B) OF EXPLANATION 2 TO S.147 TO MEAN THAT IT ALSO INCLUDES SITUATION WHERE ASSESSMENT U/S.143(3) IS TILL POSSIBLE BUT NOT YET MADE. IF THIS INTERPRETATION IS TO BE ACCEPTED, IT WILL SET AT NAUGHT THE FUNDAMENTAL PRINCIPLES UNDERLYING S.147 AND WHICH P RINCIPLES HAVE BEEN FOLLOWED TILL DATE. THESE PRINCIPLES ARE APPLICABLE EVEN TO THE EXTENDED MEANING GIVEN TO THEM TERM ESCAPED ASSESSMENT IN THE AMENDED PROVISION. THE ABOVE CLAUSE IS INTENDED TO COVER THE FOLLOWING TWO SITUATIONS (I) WHERE A RETURN I S FILED AND NON ACTION IS TAKEN EITHER U/S.143(1) OR U/S.143(3) AND THE TIME LIMIT FOR ISSUING NOTICE U/S.143(2) HAS EXPIRED (II) WHERE A RETURN IS FILED AND IS PROCESSED U/S.143(1) AND THE TIME LIMIT FOR ISSUING NOTICE U/S.143(2) HAS EXPIRED. IT DOES NOT ENVISAGE A SITUATION WHERE A RETURN IS FILED AND THE TIME LIMIT FOR ISSUE OF NOTICE U/S.143 ( 2) HAS NOT EXPIRED. UNLESS THE RETURN FILED BY THE ASSESSEE IS SCRUTINIZED BY THE AO HE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT. IF THE AO ISSUES NOTICE U/S.143(2) , THE QUITE OBVIOUSLY HE WOULD SCRUTINIZE THE RETURN AND FRAME THE ASSESSMENT U/S.143(3). SUBSEQUENTLY, HE MAY NOTICE ESCAPEMENT AND ISSUE NOTICE U/S.148. BESIDES THIS, IN THE ABOVE TWO SITUATIONS ALSO, HE WILL HAVE TO LOOK INTO THE RETURN TO S EE WHETHER THERE IS ESCAPEMENT OR NOT. IF HE NOTICES ANY ESCAPEMENT, IT CAN EB CALLED AN ESCAPEMENT ONLY IF IT IS NOTICE AFTER THE PROCEEDINGS U/S.147. IN THAT EVENT HE WILL HAVE TO ISSUE NOTICE U/S.143(2). IN NUTSHELL, (A) THE PROCEEDINGS ARE SAID TO H AVE COMMENCED ONCE THE RETURN IS FILED AND (B) THE PROCEEDINGS TERMINATE WHEN (I) THE RETURN IS PROCESSED U/S.143(1) AND THE TIME TO ISSUE NOTICE U/S.143(2) IS OVER (II) ASSESSMENT IS MADE U/S.143(3) OR (III) THE ASSESSMENT IS NO LONGER POSSIBLE U/S.143(3) . PROCEEDINGS U/S.147 CAN BE INITIATED ONLY AFTER THE EARLIER PROCEEDINGS HAVE TERMINATED AS MENTIONED ABOVE. ORDER U/S.147 R.W. 143(3) WAS THEREFORE LIABLE TO BE QUASHED. 10. IN VIEW OF THE ABOVE DISCUSSIONS, WE ARE INCLINED TO HOLD THAT UNLESS THE RET URN FILED BY THE ASSESSEE IS SCRUTINIZED BY THE AO U/S.143(3), WE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT, THE AO CANNOT INITIATE PROCEEDINGS U/S.147 WHEN THE TIME FOR ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 19 | 21 ISSUANCE OF NOTICE U/S.143(3) HAS NOT EXPIRED. THE CASE LAW RELIED BY THE ASSES SEES COUNSEL LAID DOWN THE SAME PROPOSITION OF LAW. ACCORDINGLY, WE ALLOW THE FIRST GROUND OF THE APPEAL OF THE ASSESSEE BY HOLDING THAT THIS REOPENING OF ASSESSMENT BY ISSUE OF NOTICE U/S.148 DATED 17.10.2007 IS BAD IN LAW. THUS, ON THE FACTS OF THE CA SE AND PRINCIPLES OF LAW, THE REOPENING IS AB INITIO VOID. 2 4 . THEREFORE, IN VIEW OF FOREGOING DISCUSSION AND PROPOSITIONS LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYANARAYAN KEDARNATH (SUPRA) AND THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASES OF QATALYS SOFTWARE TECHNOLOGIES LTD. (SUPRA) AND K.M. PACHAYAPPAN (SUPRA) AND THE RECENT DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF GOVIND GOPAL GOYAL (SUPRA), WE ARE CONVINCED THAT THE CONTENTION ADVANCED BY LD D.R. THAT EVEN IF THE PRESCRIBED TIME FOR ISSUANCE OF NOTICE U/S.143(2) WAS NOT EXPIRED, THE AO WAS HAVING VALID JURISDICTION TO INITIATE REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT IS NOT CORRECT, THEREFORE, WE DISMISS THE SAME. OUR ABOVE NOTED JUDICIOUS CONCLUSION ALSO GETS STRONG SUPPO RT FROM THE ORDER OF ITAT HYDERABAD IN THE CASE OF SRI VENKATA SHIVA REDDY (SUPRA). 2 5 . SINCE, UNDOUBTEDLY, THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S.143(2) FOR ASSESSMENT YEAR 2014 - 15 WAS TO BE EXPIRED ON 30.9.2016 AND PRIOR TO THAT ON 25.1.2016, THE AO ISSUED NOTICE U/S.148 OF THE ACT AFTER INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT, I.E. BEFORE EXPIRY OF LIMITATION ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 20 | 21 PERIOD FOR ISSUING NOTICE U/S.143(2) OF THE ACT. T HEREFORE, WE ARE COMPELLED TO HOLD THAT THE INITIATION OF RE ASSESSMENT PROCEEDINGS U/S.147 OF THE ACT, NOTICE U/S.148 OF THE ACT, AND ALL CONSEQUENT PROCEEDINGS AND ORDERS INCLUDING THE REASSESSMENT ORDER U/S.144/147 OF THE ACT PASSED ON 19.12.2016 IN PURSUANCE TO TH E NOTICE U/S.148 OF THE ACT AND IMPUGNED FIRST A PPELLATE ORDER ARE ALSO BAD IN LAW. WE , THEREFORE, QUASH THE REASSESSMENT NOTICE U/S.148 OF THE ACT AND CONSEQUENT REASSESSMENT ORDER DATED 19.12.2016 PASSED U/S.14 4 /147 OF THE ACT AND ALLOW THE LEGAL GROUND OF APPEAL OF THE ASSESSEE. 2 6 . AS WE HAVE CANCELLED THE REASSESSMENT ORDER PASSED U/S. 144/ 147 OF THE ACT WHILE DECIDING THE LEGAL GROUND NO .C OF THE APPEAL OF THE ASSESSEE, THE OTHER GROUNDS OF APPEAL OF THE ASSESSEE ON MERITS OF ADDITION HAVE BECOME ACADEMIC AND INFRUCTUOUS AND NOT ADJUDICATED UP ON. 2 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 20 /1 1 /20 20 . SD/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 20 / 1 1 /20 20 B.K.PARIDA, SPS (OS) ITA NO.3 37 /CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 21 | 21 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT: SWARNAKANTA PARIDA, PLOT NO.844, PALASUNI, BHUBANESWAR. 2. THE RESPONDENT. ITO, WARD 5(1), BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//