DEVYANI A. SHAH, MUMBAI V. ACIT 16(2), MUMBAI

ITA 3746/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0905 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 29-06-2017
• Assessment Year: 1996-1997
• Appeal Filed On: 17-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Question of law
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON'BLE ACCOUNTANT MEMBER ITA.NO. 3746 /MUM/201 5 (A.Y: 1996 - 97 ) DEVYANI A. SHAH 49, SAGAR KUNJ, 78, NEPEANSEA ROAD MUMBAI 400 006 PAN NO. AMHPS 7276 D V. ACIT 16(2), MATRUMANDIR, 2 ND FLOOR, TARDEO ROAD, MUMBAI 400 007 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DILIP J. THAKKAR SHRI RAJESH P. SHAH REVENUE BY : SHRI SAMUEL DARS E DATE OF HEARING : 09.10.2017 DATE OF PRONOUNCEMENT : 05 .01.2018 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(A) - 30, MUMBAI DATED 23.04.2015 . ASSESSEE RAISED VARIOUS GROUNDS OF APPEAL BOTH TECHNICAL GROUND S AS WELL AS ON MERITS OF THE ADDITIO N MADE BY ASSESSING OFFICER. ONE OF THE GROUNDS RAISED BY THE ASSESSEE IS THAT THE LD.CIT(A) ERRED IN HOLDING THAT RE - ASSESSMENT 2 ITA.NO.3746/MUM/2015 (A.Y: 1996 - 97) DEVYANI A. SHAH U/S.143 R.W.S. 147 OF THE ACT WITHOUT ISSUING THE NOTICE U/S. 143(2) WAS A VALID ASSESSMEN T. 2. IT WAS SUBMITTED BEFORE US THAT NO NOTICE U/S. 143(2) WAS ISSUED AND SERVED ON ASSESSEE BEFORE COMPLETION OF ASSESSMENT AND SINCE ISSUE OF NOTICE U/S.143(2) IS MANDATORY BEFORE FINALIZING THE ASSESSMENT AND SINCE NO SUCH NOTICE IS ISSUED THE RE - ASSESSM ENT MADE BY THE ASSESSING OFFICER IS VITIATED, NOT VALID AND BAD IN LAW. 3. LD. DR SUPPORTED THE ORDERS OF THE LD.CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND FIND THAT ASSESSEE HAS TAKEN ADDITIONAL GROUNDS BEFORE THE LD.CIT(A) STATING THAT NO NOTICE WAS ISSUED U/S. 143(1) BEFORE FILLING OF RETURN IN RESPONSE TO THE NOTICE U/S.1 48 AND THEREFORE RE - ASSESSMENT MADE BY THE ASSESSING OFFICER IS NOT VALID AND BAD IN LAW. HOWEVER , THE LD.CIT(A) DISMISSED THIS GROUND OBSERVING AS UNDER: - 2.8.1. THE APPELLANT HAS ALSO RAISED AN ADDITIONAL GROUND OF APPEAL, STATING THAT NO NOTICE WAS ISSUE U/S. 143(2) AFTER FILING OF RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. IN VIEW OF T HE PROVISIONS OF SECTION 292BB OF THE ACT, AND MY DECISION GIVEN IN R ESPECT OF THE ARGUMENTS REGARDING PRINCIPLES OF NATURAL JUSTICE (SUPRA), THE ADDITIONAL GROUND BECOMES INFRUCTUOUS AND HENCE, THE SAME IS DISMISSED . 5. AS COULD BE SEEN FROM THE ABOVE OBSERVATION OF THE LD.CIT(A), THE LD.CIT(A) HAS NOT RECORDED ANY FINDING AS TO WHETHER THE NOTICE U/S.143(2) 3 ITA.NO.3746/MUM/2015 (A.Y: 1996 - 97) DEVYANI A. SHAH WAS ISSUED, IF IT WAS ISSUED WHEN IT WAS ISSUED AND WHEN I T WAS SERVED ON THE ASSESSEE. WITHOUT GIVING ANY FINDING AS TO THE ISSUANCE AND SERVICE OF NOTICE HE WAS OF THE VIEW THAT IN VIEW OF THE PROVISIONS OF SECTION 29 2BB OF THE ACT SINCE SUFFICIENT OPPORTUNITIES WERE GIVEN TO ASSESSEE THE PRINCIPLES OF NATURAL JUSTICE WERE ADHERED TO AND THEREFORE ADDITIONAL GROUND BECOMES INFRUCTUOUS. THE ACTION OF THE LD.CIT(A) IN DISMISSING THE ADDITIONAL GROUND WITHOUT GIVING ANY SPECIFIC FINDING ON ISSUE AND SERVICE OF NOTICE U/S. 143(2 ) IS NOT PROPER AND JUSTIFIED. 6. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. MALVIKA ARUN SOMAIYA [2 TAXMANN.COM 144] ] HELD AS UNDER: - 1. WE HAVE HEARD THE LEARNED COUNSEL APPEARING OF THE PARTIES. 2. WHILE CHALLENGING THE ORDER OF THE TRIBUNAL DATED 27.09.2007, IT IS CONTENDED THAT HE ASSESSEE HAVING NOT FILED ANY FRESH RETURNS IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, THE TRIBUNAL ERRED IN HOLDING THAT NOTICE UNDER SECTION 143(3)(2) OUGHT TO HAVE BEEN SERVED UPON THE ASSESSEE BEFORE TAKING ANY FURTHER PROCEEDINGS AND ON THIS BASIS QUESTION OF LAW RAISED IS THAT THE TRIBUNAL HAS ERRED IN INTERPRETING SECTION 143(3) OF THE INCOME TAX ACT AND HAS INCORRECTLY COME TO THE CONCLUSION THAT THE ORDER OF THE ASSESSMENT WAS IN VIOLATION OF THE STATUTORY PROVISIONS. 3. IN OUR VIEW, THE FINDINGS RECORDED BY THE TRIBUNAL DO NOT CALL FOR ANY INTERFERENCE IN FACE OF THE JUDGMENT OF THIS COURT IN THE CASE OF CWT V. HUF OF H.H . LATE J. M. SCINDIA AND THE JUDGMENT OF THE RAJASTHAN COURT IN THE CASE OF TIWARI KANHAIYA LAL V. CIT. NO QUESTION OF LAW MUCH LESS SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERMINATION. APPEAL DISMISSED. NO ORDERS AS TO COSTS . 4 ITA.NO.3746/MUM/2015 (A.Y: 1996 - 97) DEVYANI A. SHAH IT COULD BE SEEN FROM THE ABOVE THE HON'BLE HIGH COURT AFFIRMED THE VIEW OF THE TRIBUNAL IN HOLDING THAT NOTICE U/S. 143(2) OUGHT TO HAVE BEEN SERVED UPON THE ASSESSEE BEFORE TAKING ANY FURTHER PROCEEDINGS U/S.143(3) OF THE ACT. 7. FURTHER IN THE CASE OF CIT V. M/S. SOLAR CAPITAL S LIMITED THE HON'BLE JURISDICTIONAL HIGH COURT NAGPUR BENCH IN ITA.NO S .141, 142, 143, 144, 145, 146 AND 149 OF 2013 DATED 13.08.2015 HELD THAT PROVISIONS OF SECTION 292BB OF THE ACT WOULD NOT BE APPLICABLE TO ASSESSMENT RELATING TO THE PERIOD BEFORE 01.04.2 008 , WHILE HOLDING SO THE HON'BLE JURISDICTIONAL HIGH COURT HELD AS UNDER: - ON HEARING THE LEARNED COUNSEL FOR THE PARTIES AND ON A PERUSAL OF THE JUDGMENTS REFERRED HEREIN ABOVE AND RELIED ON BY THE LEARNED COUNSEL FOR THE PARTIES THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERMINATION IN THESE APPEALS. THE LEARNED COUNSEL FOR THE DEPARTME NT HAS FAIRLY STATED THAT THE 1 ST SUBSTANTIAL QUESTION OF LAW HAS BEEN ANSWERED AGAINST THE DEPARTMENT BY THE JUDGMENT, REPORTED IN (2015) 113 DTR (BOM .) 267. IN OUR VIEW, AS RIGHTLY SUBMITTED ON BEHALF OF THE ASSESSEES, THE 2 ND SUBSTANTIAL QUESTION OF LAW IS ALSO ANSWERED AGAINST THE DEPARTMENT BY THE TWO UNREPORTED DECISIONS OF THIS COURT. IT IS HELD BY THE BOMBAY HIGH COURT IN THE ORDERS, DATED 15/07/2011 IN IN COME TAX APPEAL NO.5487 OF 2010 AND 07/01/2010 IN INCOME TAX APPEAL NO.2429 OF 2009 THAT THE PROVISIONS OF SECTION 292BB WOULD NOT BE APPLICABLE TO ASSESSMENTS RELATING TO THE PERIOD BEFORE 01/04/2008. ADMITTEDLY, IN THESE CASES, THE ASSESSMENT RELATES TO THE ASSESSMENT YEARS 2002 - 03 TO 2005 - 06. IN VIEW OF THE TWO AFORESAID DECISIONS OF THIS COURT, WE WOULD NOT LIKE TO RELY ON THE JUDGMENTS OF THE OTHER HIGH COURTS, REFERRED TO BY THE LEARNED COUNSEL FOR THE DEPARTMENT. EVEN OTHERWISE, THE PROVISIONS OF SEC TION 292BB ARE CLEAR AND UNAMBIGUOUS AND NO WEIGHTAGE CAN BE GIVEN TO CLAUSE 42.7 OF THE CLARIFICATORY CIRCULAR TO READ INTO THE PROVISIONS, SOMETHING THAT IS NOT THERE. THE ORDERS OF THE INCOME TAX APPELLATE TRIBUNAL ARE JUST AND PROPER AND CALL FOR NO IN TERFERENCE. 5 ITA.NO.3746/MUM/2015 (A.Y: 1996 - 97) DEVYANI A. SHAH 8. THEREFORE, IN VIEW OF THE ABOVE WE ARE OF THE CONSIDERED OPINION THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE BEFORE THE LD.CIT(A) SHOULD HAVE BEEN EXAMINED BY CALLING FOR RECORDS/REMAND REPORT FROM THE ASSESSING OFFICER AND THE LD.CIT(A ) SHOULD HAVE RECORDED A FINDING WHEN THE NOTICE WAS ISSUED AND SERVED ON THE ASSESSEE. THUS , AS THE OUTCOME OF THIS GROUND HAS BEARING ON THE VERY VALIDITY OF THE ASSESSMENT MADE U/S. 143(3) R.W.S. 147 OF THE ACT , WE RESTORE THIS GROUND TO THE FILE OF TH E LD.CIT(A) WHO SHALL EXAMINE THE ISSUE THOROUGHLY AND DECIDE IN ACCORDANCE WITH THE LAW KEEPING IN VIEW THE ABOVE DECISION S OF THE HON'BLE JURISDICTIONAL HIGH COURT. SINCE WE ARE RESTORING GROUND NO.9 OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN RESPECT OF NON ISSUE/ SERVICE OF NOTICE U/S. 143(2) OF THE ACT, WE ARE RESTORING ALL OTHER GROUNDS TO THE FILE OF THE LD.CIT(A) FOR ADJUDICATING AFRESH IN ACCORDANCE WITH THE LAW. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATIS TICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 05 TH JANUARY , 2018 . SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 05 / 01/2018 GIRIDHAR , SPS 6 ITA.NO.3746/MUM/2015 (A.Y: 1996 - 97) DEVYANI A. SHAH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM