SHRI GURUCHARAN SINGH, Bhopal V. The ITO 3(1), Bhopal

ITA 377/IND/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2234 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Keywords: Invalid notice; Validity of assessment
• Section: 143(3); 147; 148

Judgement Text

GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 1 OF 6 , , .. , ..!,#$ # % IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER, AND SHRI O.P.MEENA, ACCOUTANT MEMBER ... / I.T. A. NO.377 & 378/IND/2014 ! &' / ASSESSMENT YEAR: 2007-08 & 2008-09 SHRI GURUCHARAN SINGH MARWAH, PRP. M/S JANTA GOODS TRANSPORT, HOUSE NO.11 P.N.B. COLONY, IDGAH HILLS, BHOPAL .../ PAN:BUZPS8087D V. ITO 3(1) INDORE / APPELLANT / RESPONDENT / APPELLANT BY NONE (WRITTEN SUBMISSIONS) / RESPONDENT BY SHRI R.P. MOURYA (DR) / DATE OF HEARING 08-08-2017 !' / PRONOUNCED ON 11-08-2017 #( / O R D E R PER O.P. MEENA, AM. 1. THOUGH THESE TWO APPEALS, THE ASSESSEE HAS TAKEN AS MANY AS 7 GROUNDS OF APPEAL HOWEVER, GROUND 1 RELAT ES VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 147 FOR A.YS. 2007-08 AND 2008-09 WHICH READ AS UNDER: GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 2 OF 6 THAT THE LD. CIT(A) HAD ERRED IN FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 147. THE REASSESSMENT COMPLETED ON THE BASIS OF NOTICE U/S 143(2) OF THE INCOME TAX ACT PR IOR TO EXPIRY OF TIME U/S 143(2) ISSUED IS ILLEGAL. 2 . SINCE FACTS FOR BOTH YEARS IE. A.YS. 2007-08 AND 2008-09 ARE IDENTICAL, HENCE, WE ARE DISCUSSING FACTS OF A. Y. 2007- 08 IN I.T.A NO. 377/IN/2014 WHICH WOULD ALSO APPLY FOR A.Y. 2008-09 IN ITA NO.378/IN/2014 ALSO. DURING THE COURSE OF HEARING NO ONE HAS APPEARED ON BEHALF OF THE ASSESSE HOWEVER WRITTEN SUBMISSIONS WERE FILED ON 24.10.2016 WITH A REQUEST THAT SAME MAY BE CONSIDER ED WHILE DECIDING THE APPEAL, THEREFORE, WE CONSIDERED THE SAME WHILE ADJUDICATING THIS APPEAL. 3 . BRIEF FACTS ARE THAT THE ASSESSEE HAS FILED A RET URN OF INCOME ON 21.08.2009 AND NOTICE U/S 148 OF THE ACT WAS ISSUED TO ASSESSEE ON 01.09.2010 AS PER WRITTEN SUBMISSIONS IT WAS SUBMITTED THAT A NOTICE U/S 143( 2) HAS TO BE SERVED BEFORE THE EXPIRY OF 6 MONTHS FROM THE END OF THE F.Y. AND WHICH THE RETURN IS FURNISHED. WHEREAS IN CASE OF APPELLANT THE PROCEEDINGS U/S 148 WERE INIT IATED ON GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 3 OF 6 01.09.2010 I.E. BEFORE 30.09.2010 MEANING BY TIME O F ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS NOT EXPIRED. TH E AO SHOULD FIRST EXHAUST THE REMEDY AVAILABLE U/S 143(2 ) OF THE ACT. THE ACT OF ISSUING A NOTICE U/S 148 PRIOR TO E XPIRY OF TIME FRAME WITHIN WHICH NOTICE U/S 143(2) CAN BE IS SUED IS ILLEGAL AS HELD BY MADRAS HIGH COURT IN THE CASE OF CIT VS. QATALYS SOFTWARE TECHNOLOGIES (2009) 308 ITR 249 BE CAUSE THE RETURN FILED BY ASSESSEE IS ONLY PROCESSED U/S 143(1) BUT THE PROCEEDINGS CANNOT BE SAID TO HAVE TERMINAT ED, ACTION U/S 147 COULD NOT BE INITIATED. THE SAME VIE W HAS BEEN EXPRESSED BY CALCUTTA HIGH COURT IN THE CASE O F CESC LTD. VS. DCIT (2003) 263 ITR 402 AND ALSO IN C ASE OF CIT VS. RAJENDRAJI SHAH 247 ITR 772 AND VIPIN KHANN A VS. CIT 255 ITR 220. IN VIEW OF ABOVE, THE NOTICE ISSUE D AND SERVED BY THE LD. AO WAS ABINITIO VOID, INVALID AND BAD IN LAW AS THE TIME OF REGULAR ASSESSMENT WAS NOT ELAPS ED AND THE PROCEEDINGS CONSEQUENT TO SUCH INVALID NOTICE W AS BAD IN LAW AND, THEREFORE, DESERVES TO BE QUASHED. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF JURISDI CTIONAL I.T.A.T., INDORE IN THE CASE OF ITO VS. VIJAY BOREE ELLES (2008-10 ITJ-473-I.T.A.T. INDORE) AND ALSO IN THE C ASE OF GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 4 OF 6 NIZAMS SUPPLEMENTAL FAMILY TRUST VS. CIT (2000) 24 2 ITR 381 (HON'BLE SUPREME COURT). 4 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5 . WE HAVE CONSIDERED THE FACTS AND PERUSED THE MATE RIAL ON RECORD. ONGOING, THROUGH WRITTEN SUBMISSIONS OF THE ASSESSEE, IT IS SEEN THAT THE ASSESSEE HAS FILED A RETURN OF INCOME ON 28.08.2009 WHEREAS THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 01.09.2010. WE ALSO NOTED THAT ACCORDING TO PROVISIONS OF SECTION 143(2) AS STOOD AT THE RELEVANT TIME FOR ASSESSMENT YEAR UNDER CONSIDERATI ON, THE NOTICE U/S 143(2) CAN BE SERVED BEFORE THE EXPIRY O F 6 MONTHS FROM THE END OF THE F.Y. IN WHICH RETURN WAS FURNISHED, THEREFORE, IN THE INSTANT CASE THE RETUR N WAS FURNISHED DURING THE F.Y. 2009-10. ACCORDINGLY, THE NOTICE U/S 143(2) COULD BE ISSUED IN THIS CASE ON OR BEFOR E 30.09.2010. HOWEVER, WE FIND THAT BEFORE THE ISSUE OF NOTICE U/S 143(2). THE AO HAS ISSUED A NOTICE U/S 1 48 ON 01.09.2010. WHEN THE TIME LIMIT FOR NORMAL ASSESSME NT U/S 143(3) WAS ALREADY AVAILABLE, THEREFORE, ASSESS MENT U/S 147 WHICH IS EXTRAORDINARY MECHANISM GET WHEN T IME GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 5 OF 6 LIMIT FOR REGULAR ASSESSMENT U/S 143(3) WAS PENDING . THE ASSESSEE WHILE FILING WRITTEN SUBMISSION RELIED IN THE CASE OF MADRAS HIGH COURT IN THE CASE OF CIT VS. QATALYS SOFTWARE TECHNOLOGIES (SUPRA) AND HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CESC LTD. VS. DCIT (SUPRA), AN D FURTHER RELIANCE IS PLACED IN THE CASE OF CIT VS. T CP LTD. (2010) 235 CTR 414 (MAD) WHEREIN IT WAS HELD THAT N OTICE U/S 148 CANNOT BE ISSUED FOR MAKING AN ASSESSMENT U /S 147 WHEN TIME LIMIT IS AVAILABLE FOR ISSUE OF NOTIC E U/S 143(2) FOR MAKING AN ASSESSMENT UNDER SECTION 143(3 ). SIMILAR RATIO WAS ALSO LAID DOWN IN THE CASE OF VIP IN KHANNA VS. CIT (SUPRA) AND OTHERS RELIED BY THE ASS ESSEE. IN THE LIGHT OF FORGOING DISCUSSIONS, WE ARE OF THE CONSIDERED OPINION THAT PROCEEDINGS U/S 147 INITIAT ED WHEN THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) FOR MAKING REGULAR ASSESSMENT U/S 143(3) WERE AVAILABLE HENCE THE PROCEEDINGS INITIATED U/S 147 BY ISSUE OF NOTICE U/S 148 IS VOID AB INITIO. ACCORDINGLY, ASSESSMENT PROCEEDINGS ARE QUASHED FOR THE A.Y. 2007-08 AND 20 08- 09. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. GURUCHARAN SINGH VS. ITO /ITA NO.377 & 378/IND/14 A .Y.07-08 PAGE 6 OF 6 6. SINCE, WE HAVE QUASHED THE ASSESSMENT PROCEEDINGS ON THE BASIS OF LEGAL GROUND OF ISSUE OF NOTICE U/S 14 8 OF THE ACT, THEREFORE, WE ARE NOT DECIDING THE OTHER GROUN DS ON MERITS. AS SAME BECOMES INFRUCTUOUS DOES NOT REQUIR ED ANY ADJUDICATION. ACCORDINGLY, THE OTHER GROUNDS AR E TREATED AS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR A.Y. 2007-08 (ITA NO.377/IN/2014) AND A.Y. 2008 - 09(ITA NO.378/IN/2014). 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.08.201 7 SD/- SD/- ( C.M. GARG) (O.P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11 TH AUGUST, 2017 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE