ITO 16(2)(4), MUMBAI V. CHAMPABEN K. SHAH, MUMBAI

ITA 3855/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55719 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 31-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 13-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: RAMESH K CHHEDA
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 143(3); 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO. 3855/MUM/2010 (ASSESSMENT YEAR: 2002-03) INCOME TAX OFFICER - 16(2)(4) SMT. CHAMPABEN K. SHAH (EXECUTOR OF THE MATRU MANDIR, TARDEO ROAD WILL AND LEGAL HEIR OF SHRI KHIMJI D. SHAH) MUMBAI 400007 VS. M/S. HEENA PANNALAL TERRACE GRANT CROSS LANE, MUMBAI 400007 PAN - AAHPS 8313 H APPELLANT RESPONDENT APPELLANT BY: SHRI SHANTAM BOSE RESPONDENT BY: SHRI RAMESH K. CHHEDA DATE OF HEARING: 31.10.2011 DATE OF PRONOUNCEMENT: 31.11.2011 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY REVENUE IS AGAINST THE ORDER OF THE CIT(A) XVII, MUMBAI DATED 09.02.2010. 2. VALIDITY OF REOPENING OF ASSESSMENT WAS SUBJECT MAT TER OF DISPUTE BEFORE THE LEARNED CIT(A) WHEREIN THE CASE OF THE A SSESSEE WAS THAT NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT) HAVING NOT BEEN SERVED ON THE ASSESSEE, THE WHOLE PROCEEDINGS BECOM E NULL AND VOID; HAVING REGARD TO THE FACT THAT LEARNED CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE, IT GAVE RISE TO THE PRESENT APPEAL ON BEHALF OF THE RE VENUE. 3. THE FACTS IN SHORT ARE THAT THE ORIGINAL RETURN WAS FILED BY ASSESSEE ON 27.09.2002 AND THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT, WHICH WAS SOUGHT TO BE REOPENED BY ISSUANCE OF NOTI CE UNDER SECTION 148 OF THE ACT, ON 01.04.2005. PRIOR TO THE ISSUANCE OF TH E NOTICE, I.E. ON 13.10.2003 ASSESSEE EXPIRED AND THE ESTATE WAS ADMI NISTERED BY HIS NEPHEW AND WIFE, SMT. CHAMPABEN K. SHAH, WHO ARE APPOINTED AS EXECUTORS OF HIS WILL. THOUGH IT WAS CLAIMED BY THE A.O. THAT NOTICE UNDER SECTION 148 WAS ITA NO. 3855/MUM/2010 SMT. CHAMPABEN K. SHAH 2 ISSUED ON 01.04.2005, THE CORRECT DATE OF SERVICE O F NOTICE WAS NOT MENTIONED. SIMILARLY, IN THE ASSESSMENT ORDER IT WA S STATED THAT NOTICE UNDER SECTION 143(1) AND 142(1) WAS SERVED UPON ASS ESSEE BUT IT WAS NOT MENTIONED AS TO ON WHICH DATE SUCH NOTICE WAS SERVE D; IN FACT NOTICE UNDER SECTION 143(1) AND 142(1) WAS IN THE NAME OF SHRI K HIMJI D. SHAH, THE ASSESSEE, WHO EXPIRED ON 13.10.2002, WHICH FACT WAS KNOWN TO THE DEPARTMENT SINCE THE RETURN FOR A.Y. 2003-04 WAS FI LED ON BEHALF OF ASSESSEE UNDER THE NAME OF THE EXECUTOR OF THE WILL. DESPITE THIS GLARING FACT THE A.O. PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT VIDE ITS ORDER DATED 15.12.2006. ON AN APPEAL B Y THE EXECUTORS OF THE ESTATE OF SHRI KHIMJI D. SHAH, THE PLEA OF THE REVE NUE WAS THAT THE NOTICE WAS IN FACT SERVED AND THE PARTY HAVING COOPERATED WITH IN THE ASSESSMENT PROCEEDINGS, THE ASSESSMENT MADE BY THE A.O. IS SAV ED BY THE PROVISIONS OF SECTION 292BB OF THE ACT. HOWEVER, EVEN BEFORE THE LEARNED CIT(A) NO EVIDENCE COULD BE FURNISHED TO PROVE THE FACTUM OF SERVICE OF NOTICE. ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THAT NO NOT ICE HAVING BEEN SERVED UNDER SECTION 148 OF THE I.T. ACT, THE PROCEEDINGS CONSEQUENT THERETO HAVE TO BE TREATED AS NULL AND VOID. EVEN SECTION 292BB OF THE ACT HAS ONLY PROSPECTIVE OPERATION AND IT CANNOT BE APPLIED TO T HE PROCEEDINGS THAT HAVE TAKEN PLACE PRIOR TO 01.04.2008. IN THIS REGARD REL IANCE WAS PLACED ON THE DECISION OF THE ITAT SPECIAL BENCH, DELHI IN THE CA SE OF KUBER TOBACCO PRODUCTS (P) LTD. VS. DCIT 120 TTJ (DEL) (SB) 577. 4. HAVING REGARD TO THE CIRCUMSTANCES THE LEARNED CIT( A) QUASHED THE ASSESSMENT PROCEEDINGS BY OBSERVING AS UNDER: - 7. CONSIDERING THE FINDINGS OF THE HON'BLE SP;, BE NCH OF THE ITAT BASED UPON THE INTERPRETATION OF STATUTE OF THE HON 'BLE SUPREME COURT, IT BECOMES CLEAR THAT SEC. 292BB WOULD BE ON LY EFFECTIVE AFTER A.Y. 2008-09 AND IN THIS CASE SINCE THE AO DOES NOT HAVE THE RECORD OF SERVICE OF NOTICE U/S. 148, THE APPELLANTS CONT ENTION THAT NOTICE U/S. 148 WAS NOT SERVED UPON THEM HAS TO BE ACCEPTE D AND WITHOUT A VALID SERVICE OF NOTICE U/S. 148, THE WHOLE PROCEED INGS OF REASSESSMENT BECOMES NULL AND VOID. RESPECTFULLY FO LLOWING THE DECISION OF THE HON'BLE SPL. BENCH ITAT, SINCE THER E WAS NO VALID SERVICE OF NOTICE U/S. 148, THE WHOLE REASSESSMENT PROCEEDINGS STAND CANCELLED AND THE ORIGINAL ORDER OF THE AO IS HELD VALID. SINCE THE ITA NO. 3855/MUM/2010 SMT. CHAMPABEN K. SHAH 3 ORDER U/S. 143(3)/148 IS CANCELLED, THE OTHER GROUN DS OF APPEAL ARE NOT DEALT WITH. 5. THOUGH REVENUE PREFERRED AN APPEAL BEFORE US, THE L EARNED D.R. COULD NOT POINT OUT ANY CASE LAW TO CONTRADICT THE FINDIN GS OF THE LEARNED CIT(A). NO EVIDENCE WAS FURNISHED TO PROVE THAT NOTICE WAS IN FACT SERVED UPON THE EXECUTORS/LEGAL REPRESENTATIVES OF THE DECEASED ASS ESSEE. ON THE OTHER HAND, THE LEARNED COUNSEL PLACED ON RECORD THE DECI SION OF THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS. CEBON INDIA LTD. 184 TAXMAN 290 WHEREIN THE COURT OBSERVED THAT IN THE ABSENCE OF PROOF OF SERVICE OF NOTICE WITHIN STIPULATED TIME, MERE GIVING OF DISPATCH NUMBER WOU LD NOT CURE THE DEFECT AND IRREGULARITY OR DEFECT IS NOT CURABLE UNDER SEC TION 292BB OF THE ACT. 6. HAVING REGARD TO THE RIVAL SUBMISSIONS, WE ARE OF T HE FIRM VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CAL L FOR ANY INTERFERENCE. ACCORDINGLY, AS PRONOUNCED IN THE OPEN COURT, APPEA L FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2011. SD/- SD/- (T.R. SOOD) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 31 ST OCTOBER 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXVIII, MUMBAI 4. THE CIT XVI, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.