Shri Purna Chandra Das, Bhubaneswar V. ITO, Ward-3(4), Bhubaneswar

ITA 365/CTK/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0180 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 25-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K LENKA
• Assessee Lawyers: DILLIP MOHANTY
• Keywords: Procedural lapse; Competent authority; Set aside
• Section: 143(3); 201; 292BB; 143(2); 48; 148

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER ITA NO . 365 /CTK/201 8 ASSESSMENT YEAR : 201 3 - 2014 PURNA CHANDRA DAS, PLOT NO.9, ASHOK NAGAR, BHUBANESWAR. VS. ITO, WARD 3(4), BHUBANESWAR. PAN/GIR NO. ACCPD 0467 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI DILLIP MOHANTY , AR REVENUE BY : SHRI J.K.LENKA , DR DATE OF HEARING : 24 / 1 2 / 201 9 DATE OF PRONOUNCEMENT : 31 / 1 2 / 201 9 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A ) - 2 , BHUBANESWAR DATED 11.6.2018 FOR THE ASSESSMENT YEAR 2013 - 14 . 2. ALTHOUGH SEVERAL GROUNDS HAVE BEEN RAISED IN THE APPEAL, BUT THE ASSESSEE PRESSED LEGAL GROUND THAT THE ASSESSMENT ORDER HAS B EEN PASSED WITHOUT ISSUING NOTICE U/S.143(2) OF THE ACT, THEREFORE, THE ORDER IS TO BE ANNULLED. 3. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT NOTICE U/S.148 OF THE ACT WAS ISSUED ON 24.3.2017 AND IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED WRITTEN SUBMISSION ON 29.3.2017 WITH COPIES OF BANK ACCOUNTS MAINTAINED AND EXPLANATION REGARDING SOURCE OF CASH DEPOSITS IN SAVING ITA NO.365/CTK/2018 ASSESSMENT YEAR : 2013 - 2014 P A G E 2 | 6 BANK ACCOUNT. HOWEVER, RETURN WAS NOT FILED FOR THE ASSESSMENT YEAR 2013 - 14. HE SUBMITTED THAT THEREAFTER NOTICE U/S.142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 4.5.2017 REQUIRING THE ASSESSEE TO FILED TRUE AND CORRECT RETURN ON OR BEFORE 12.3.2017 AND ALSO ON 19.5.2017, THE ASSESSEE WAS REQUIRED TO FURNISH ACCOUNTS AND DOCUMENTS. HE SUBMITTED THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013 - 14 ELECTRONICALLY U/S. 142 OF THE I.T.ACT INSTEAD OF FILING I N RESPONSE TO NOTICE U/S.148 OF THE ACT. LD COUNSEL SUBMITTED THAT THE ASSESSING OFFICER ISSUED NOTICE U/S.142(1) OF THE ACT ON 4.5.2017 AND IN RESPONSE TO WHICH, THE ASSESSEE FILED ITS RETURN OF INCOME ON 10.10.2017. HE SUBMITTED THAT SINCE A RETURN OF I NCOME HAS BEEN FILED IN RESPONSE TO NOTICE U/S.142(1) OF THE ACT, THE ASSESSING OFFICER IS DUTY BOUND TO ISSUE NOTICE U/S.143(2) OF THE ACT BEFORE UNDERTAKING SCRUTINY OF THE INCOME TAX RETURN AND COMPLETING THE ASSESSMENT. THEREFORE, IN ABSENCE OF ISSUE OF NOTICE U/S.143(2) OF THE ACT, THE ASSESSMENT ORDER PASSED BY THE AO IS ABINITIO VOID AND LIABLE TO BE QUASHED. 4. LD COUNSEL FURTHER RELIED UPON THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT V. HOTEL BLUE MOON (2010) 321 ITR 362 (SC) IN THE SAID CASE, THE HON'BLE SUPREME COURT HELD THAT 'OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE AND, THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH.'. HE ITA NO.365/CTK/2018 ASSESSMENT YEAR : 2013 - 2014 P A G E 3 | 6 FURTHER RELIED ON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF PR. CIT VS. SHRI JAI SHIV SHANKAR TR ADERS PVT LTD., IN ITA 519/2015 ORDER DATED 14.10.2015, WHEREIN, IT IS HELD THAT FAILURE BY THE AO TO ISSUE A NOTICE TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT PURSUANT TO NOTICE UNDER SECTION 148 OF THE ACT, IS FATAL TO THE ORDER OF REASSESSMENT. HE FURTHER REFERRED TO THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF SAPTHAGIRI FINANCE AND INVESTMENTS VS ITO IN TC (APPEAL) NO.159 OF 2006 ORDER DATED 17.7.2012 HELD THAT BEYOND NOTICE ISSUED U/S.142(1) OF THE ACT THERE WAS NO NOTICE ISSUED UNDE R SECTION 143(2) OF THE ACT, THERE WAS TOTAL FAILURE ON THE PART OF THE REVENUE FROM COMPLYING WITH THE PROCEDURE LAID DOWN UNDER SECTION 143(2) OF THE ACT, WHICH IS MANDATORY ONE. FURTHER RELIANCE WAS PLACED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS PAWAN GUPTA, 318 ITR 322 (DEL), WHEREIN, IT WAS HELD THAT THE ASSESSMENT ORDER PASSED WITHOUT COMPLYING WITH SECTION 143(2) OF THE ACT, IT WOULD BE INVALID AND NOT BE MERELY IRREGULAR. RELIANCE WAS PLACED ON THE DECISION OF ITAT INDO RE IN THE CASE OF ACIT VS SUKHAMANI COTTON INDUSTRIES AND ORS IN ITA NO.22/IND/2017 AND ORS ORDER DATED 21.12.2018, WHEREIN IT WAS HELD 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, A F ATAL ERROR HAS BEEN COMMITTED BY THE AO AND THUS THE REASSESSMENT ORDER U/S.147 R.W.S 143(3) OF THE ACT IS INVALID. ITA NO.365/CTK/2018 ASSESSMENT YEAR : 2013 - 2014 P A G E 4 | 6 5. REPLYING TO ABOVE, LD DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE AS WELL AS THE ORDERS OF LOWER AUTHORITIES. IN THE INSTANT CASE, THE ASSESSEE IS AN INDIVIDUAL AND DERIVES HIS INCOME FROM OTHER SOURCES. SINCE THE ASSESSEE DID NOT FILE RETURN OF INCOME, A NOTICE U/S.148 OF THE ACT WAS ISSUED BY THE AO AND IN RESPONSE TO WHICH, THE ASSESSEE FILED WRITTEN SUBMISSION WITH COPIES OF BANK ACCOUNTS AND EXPLANATION REGARDING SOURCE OF CASH DEPOSITS IN SAVING BANK ACCOUNT. THEREAFTER, ANOTHER NOTICE U/S.142(1) OF THE ACT WAS ISSUED BY THE AO REQUIRING THE ASS ESSEE TO PREPARE THE RETURN OF INCOME AND FILE THE SAME ON OR BEFORE 12.5.2017. THEREAFTER, THE AO PROCEEDED TO FRAME ASSESSMENT U/S.144/147 OF THE ACT ON 29.12.2018 WITHOUT ISSUING NOTICE U/S.143(2) OF THE ACT. WHILE DOING SO, THE AO TOOK COGNIZANCE OF TOTAL INCOME AS SHOWN IN THE STATEMENT OF INCOME ACCOMPANIED WITH THE RETURN FILED U/S.142(1) OF THE ACT. ON PERUSAL ORDERS OF LOWER AUTHORITIES, I FIND THAT THOUGH THE ASSESSEE HAS FILED ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S.142(1) OF THE A CT, THE ASSESSING OFFICER HAS FAILED TO ISSUE ANY NOTICE U/S.143(2) OF THE ACT, WHICH IS MANDATORY. I ALSO FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF BLUE MOON (SUPRA) HELD THAT 'OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U NDER SECTION 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE AND, THEREFORE, THE REQUIREMENT OF ITA NO.365/CTK/2018 ASSESSMENT YEAR : 2013 - 2014 P A G E 5 | 6 NOTICE UNDER SECTION 143(2) CANN OT BE DISPENSED WITH.'. FURTHER THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. SALARPUR COLD STORAGE PRIVATE LIMITED (2015) 228 TAXMANN 48 (MAG.) (ALL), HELD THAT 'WHERE THERE IS A FAILURE APPARENT TO ISSUE A NOTICE UNDER SECTION 143(2) WITHIN PRESCRIBED PERIOD, IT CANNOT BE CURED BY TAKING RECOURSE TO SECTION 292BB OF THE INCOME TAX ACT, 1961.' 7. FURTHER HON'BLE KERALA HIGH COURT IN THE CASE OF ROMI VS. CIT (2014) 363 ITR 311 (KER), HAS HELD THAT 'WHERE NO NOTICE AS ISSUED UNDER SECTION 143(2) TO ASSESSEE, ASSESSMENT MADE UND ER SECTION 143(3) WAS TO BE SET ASIDE.' SIMILAR VIEW HAS ALSO BEEN TAKEN IN PLETHORA OF JUDGMENTS CITED SUPRA. 8. RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENTS AND VARIOUS CASE LAWS, WE FIND THAT STAT UTORY NOTICE AS REQUIRED TO SEC. 143(2) OF THE ACT WAS TO BE ISSUED BY THE COMPETENT AUTHORITY AND WITHIN THE TIME. I ALSO FIND THAT THE LD. DR ALSO FAILED TO BRING ANYTHING CONTRARY TO THE ARGUMENTS ADVANCED BY THE LD. AR WITH REGARD TO THE ISSUE OF NOTIC E U/S.143(2) OF THE ACT BEFORE COMPLETION OF ASSESSMENT U/S.144/147 OF THE ACT. CONSEQUENTLY, I FIND THAT IN ABSENCE OF ANY VALID NOTICE U/S.143(2) OF THE ACT HAVING BEEN ISSUED IN THE INSTANT CASE, THE IMPUGNED ORDER PASSED U/S.144/147 OF THE ACT CANNOT B E SUSTAINED. AS SUCH, THE ASSESSMENT FRAMED, WITHOUT THE ISSUANCE OF THE MANDATORY NOTICE U/S. 143(2), IS VOID AB INITIO. THE ASSESSEE SUCCEEDS IN LEGAL GROUND OF APPEAL . ITA NO.365/CTK/2018 ASSESSMENT YEAR : 2013 - 2014 P A G E 6 | 6 9. SINCE I HAVE HELD THE ASSESSMENT ORDER AS VOID AB INITIO, OTHER GROUNDS OF APPEAL ON MERITS ARE NOT ADJUDICATED UPON ORDER PRONOUNCED ON 31 / 1 2 /201 9 . ( CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 31 / 1 2 /20 1 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : PURNA CHANDRA DAS, PLOT NO.9, ASHOK NAGAR, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 3(4), BHUBANESWAR. 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//