PADAM CHAND DHADDA HUF, Jaipur V. ACIT, Jaipur

ITA 40/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1968 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRITHVIRAJ MEENA CIT DHK
• Keywords: Audit objection; Period of limitation; Question of law; Reasonable cause; Difference of opinion; Procedural lapse; Benefit of exemption; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 54F; 147; 148; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 40/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S PADAM CHAND DHADDA HUF 1387, GANESH BHAWAN, PARTANIYON KA RASTA, JOHRI BAZAR, JAIPUR. CUKE VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AADHP 6433 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SIDHARTH RANKA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PRITHVI RAJ MEENA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 31/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)- I, JAIPUR DATED 27.09.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED LOWER AUTHORITIES GROSSLY ERRED IN ISSUING NOTICE U /S. 148 OF THE INCOME- TAX ACT, 1961 WHICH IS ISSUED WITHOUT ANY REASON TO BELIEVE, BASED ON AUDIT OBJECTION, BASED ON CHANGE OF OPINION AND THU S THE ENTIRE PROCEEDINGS OF REASSESSMENT DESERVES TO HAVE BE QUA SHED. 1.1. THAT THE PROCEEDINGS U/S. 148 OF THE INCOME-TA X ACT, 1961 SUFFERS FROM NON-ISSUANCE OF NOTICE U/S. 143(2) AND THE LD. CIT (A) QUASHED THE ASSESSMENT ORDER ON THIS GROUND ONLY BUT ON THE OTHER HAND HE HAS GIVEN DIRECTIONS TO THE LD. ASSESSING OFFICER T O INITIATE FRESH RE- ASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 O F THE ACT AND SUCH DIRECTIONS OF THE ID. CIT (A) IS ILLEGAL, BAD IN LA W, BEYOND HIS JURISDICTION AND COMPETENCE AND WHICH WILL LEAD TO SECOND ROUND OF 2 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE APPEL LANT AND THUS DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT (A) GROSSLY ERRED IN NOT DECIDING THE GROUNDS ON MERITS OF THE CASE AND HE OUGHT TO HAVE DECIDED THE CASE ON MERITS OF THE CAS E AS WELL OTHERWISE IT WILL LEAD TO SECOND ROUND OF LITIGATIO N AGAINST THE ASSESSEE APPELLANT. 2.1. THAT THE LEARNED ASSESSING OFFICER GROSSLY ERR ED IN RESTRICTING THE BENEFIT OF EXEMPTION CLAIMED BY THE ASSESSEE APPELL ANT U/S. S4F OF THE INCOME-TAX ACT TO RS. 2,939,001/-INSTEAD OF RS. 11, 756,003/- CLAIMED BY THE ASSESSEE APPELLANT AND THUS DISALLOWING RS. 8,817,002/- BY HOLDING THAT THE ASSESSEE HAS INVESTED IN (4) FOUR DIFFERENT FLATS AND THE BENEFIT IS TO BE RESTRICTED TO ONLY 1 (ONE) FLA T. 2.2. THAT THE LEARNED ASSESSING OFFICER GROSSLY ERR ED IN DISALLOWING THE BROKERAGE PAID BY THE ASSESSEE APPELLANT OF RS. 1,5 37,000/- BY ACCOUNT PAYEE CHEQUES TOWARDS SALE OF AGRICULTURAL PROPERTY. 2.3. THAT THE LEARNED LOWER AUTHORITIES GROSSLY ERR ED IN DISALLOWING THE INDEXED COST OF EXPENSES INCURRED ON ACCOUNT OF BOU NDARY WALL AND SMALL TWO ROOMS WITH KITCHEN AMOUNTING TO RS. 1,249 ,969/-. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY OR AMEND ANY GROUND ON OR BEFORE THE DATE OF HEARING. 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY 28 DAYS. LD. COUNSEL FOR THE ASSESSEE FILING AN AFFIDAVIT STATING THAT THE REASO NS FOR NON-FILING OF THE APPEAL WITHIN PRESCRIBED PERIOD OF LIMITATIONS. 2.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE AVE RMENTS MADE IN AFFIDAVIT. 2.2 LD. D/R OPPOSED THE SUBMISSIONS, AND SUBMITTED THAT NO REASONABLE CAUSE IS SHOWN FOR CONDONING DELAY. 2.3 AFTER HEARING THE RIVAL CONTENTIONS, AND CONSID ERING THE MATERIAL PLACED BEFORE US, WE DEEM IT PROPER TO CONDONE THE DELAY. HENCE THE APPEAL IS ADMITTED FOR HEARING. 3 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. 3. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS REOPENED AND THE ASSESSMENT UNDER SECTION 147 R.W.S 143(3) OF TH E INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FRAMED VIDE O RDER DATED 30.09.2015. WHILE FRAMING THE ASSESSMENT, THE AO MADE ADDITION OF RS. 15,37,000/- ON ACCOUNT OF DISALLOWANCE OF TRANSFER EXPENSES AND ALSO MADE ADD ITION IN RESPECT OF THE DISALLOWANCE OF INDEXED COST OF CONSTRUCTION. FURT HER, THE ASSESSING OFFICER DISALLOWED DEDUCTION U/S 54F OF THE ACT AMOUNTING T O RS. 88,17,002/-. AGGRIEVED BY THIS ORDER, ASSSESSEE PREFERRED AN APPEAL BEFORE LD . CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSE HOLDING THAT THE ASSESSMENT FRAMED IS VOID AB-INITIO. HOWEVER, THE LD. CIT(A) GAVE LIBERTY TO THE ASSESSING OFFICER TO INITIATE THE FRESH ASSESSMENT PROCEEDINGS. FURTHER, THE LD. CIT(A) IN RESPECT OF DISALLOWANCE OF INDEXED COST O F CONSTRUCTION, AND THE OTHER DID NOT DECIDE THE SAME. AGAINST THIS, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 4. GROUND NOS. 1 TO 2 ARE AGAINST THE DECISION OF THE LD. CIT(A) TO GIVE LIBERTY TO THE ASSESSING OFFICER TO THE FRESH ASSESSMENT PR OCEEDINGS BY ISSUING A NOTICE U/S 148 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRE D TO AS THE ACT). 4.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT ONCE THE REASSESSMENT FOUND TO BE ILLEGAL, NO LIBERTY CAN BE GIVEN TO INITIATE FRESH REASSESSMENT. THERE IS NO PROVISION UNDER THE LAW TO MAKE REASSESSMENT TWICE. FURTHER, HE SUBMITTED THA T THE LD. CIT(A) HAS NO POWER TO REMAND THE MATTER TO THE ASSESSING OFFICER, FOR MAKING FRESH ASSESSMENT. 4 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. 4.2 ON THE CONTRARY, LD. D/R SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . WE FIND THAT LD. CIT(A) HAS DECIDED THE ISSUE OF REOPENING AS UNDER:- (II) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, REMAND REPORT OF THE AO AND ITS REJOINDER BY THE APPELLANT, MATER IAL PLACED ON RECORD AND THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT. IT IS EVIDENT FROM THE ABOVE REMAND REPORT OF THE AO THAT NO NOTI CE U/S 143(2) OF THE ACT WAS ISSUED BY THE AO AT ANY TIME WITHIN THE STIPULA TED TIME. FURTHER, ACCORDING TO THE AO, THE APPELLANT HAS NOT FILED AN Y RETURN OF INCOME IN COMPLIANCE TO NOTICE ISSUED U/S 148 OF THE ACT AND THUS THERE WAS NO OCCASION FOR THE AO TO ISSUE NOTICE U/S 143(2) OF T HE ACT. IT IS AN UNDISPUTED FACT THAT VIDE LETTER DATED 26.03.2015, THE APPELLA NT STATED THAT EARLIER RETURN OF INCOME FILED BY IT ON 31.07.2011 MAY BE TREATED TO HAVE BEEN FILED IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT WHICH WAS T OTALLY IGNORED BY THE AO. IT IS NOTED THAT IF THE AO REQUIRED THE ASSESSEE TO FILE ITS RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT, THEN NOTHING IN THE ACT OR THE RULES PREVENTED THE AO IN REQUIRING THE ASSESSEE TO FILE ITS RETURN OF INCOME. THE AO JUST CANNOT IGNORE THE ABOVE REFERRED LETTER DATED 26.03.2015 OF THE APPELLANT WHEREIN IT WAS STATED THAT THE RETURN FIL ED ON 31.07.2011 MAY BE TAKEN AS A RETURN FILED IN COMPLIANCE TO NOTICE ISS UED U/S 148 OF THE ACT. (III) FURTHER, IT COULD BE SEEN FROM THE NUMBER OF JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE AR IN ITS REJOINDER TO THE REMAN D REPORT OF THE AO THAT IF A NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED TO THE AS SESSEE REQUIRING IT TO FILE ITS RETURN OF INCOME AND IF THE ASSESSEE FEELS THAT IT IS NOT NECESSARY TO FILE A FRESH RETURN AND THAT THE EARLIER RETURN FILED BY I T U/S 139 OF THE ACT SHOULD BE TREATED AS THE RETURN FOR THE PURPOSE OF REASSESSME NT U/S 147 AND 148 OF THE ACT, IT MAY INFORM THE AO OF ITS DECISION AND IN TH AT EVENT, THE EARLIER RETURN 5 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. WILL BE TREATED AS THE FRESH RETURN SUBMITTED IN RE SPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. (IV) IT MAY BE MENTIONED THAT IN THE CASE OF ACIT V S HOTEL BLUE MOON 321 [2010] ITR 362 (SC), IN THE CONTEXT OF BLOCK ASSESS MENTS IT WAS HELD BY THE HON'BLE APEX COURT THAT: 'WHERE THE ASSESSING OFFICER IN REPUDIATION OF THE RETURN FILED UNDER SECTION 158BC(A) PROCEEDS TO MAKE AN ENQUIRY, HE HAS NECESS ARILY TO FOLLOW THE PROVISIONS OF SECTION 142 AND SUB-SECTIONS (2) AND (3) OF SECTION 143. [PARA 16]' (V) IN THE CASE OF PR. CIT VS SHRI JAI SHIV SHANKAR TRADERS (P) LTD [2015] 64 TAXMANN.COM 220 (DELHI), THE HON'BLE HIGH COURT CON SIDERED THE ABOVE REFERRED CASE OF HOTEL BLUE MOON AND OTHER CASES OF VARIOUS HIGH COURTS AND HELD AS UNDER: '12. THE NARRATION OF FACTS AS NOTED ABOVE BY THE C OURT MAKES IT CLEAR THAT NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED T O THE ASSESSEE AFTER 16TH DECEMBER 2010, THE DATE ON WHICH THE ASSESSEE INFOR MED THE AO THAT THE RETURN ORIGINALLY FILED SHOULD BE TREATED AS THE RE TURN FILED PURSUANT TO THE NOTICE UNDER SECTION 148 OF THE ACT. 13. IN DIT V. SOCIETY FOR WORLDWIDE INTERBANK FINAN CIAL TELECOMMUNICATIONS [2010] 323 ITR 249 (DELHI), THIS COURT INVALIDATED AN REASSESSMENT PROCEEDINGS AFTER NOTING THAT THE NOTICE UNDER SECT ION 143(2) OF THE ACT WAS NOT ISSUED TO THE ASSESSEE PURSUANT TO THE FILING O F THE RETURN. IN OTHER WORDS, IT WAS HELD MANDATORY TO SERVE THE NOTICE UNDER SEC TION 143(2) OF THE ACT ONLY AFTER THE RETURN FILED BY THE ASSESSEE IS ACTUALLY SCRUTINIZED BY THE AO. 14. THE INTERPLAY OF SECTIONS 143 (2) AND 148 OF TH E ACT FORMED THE SUBJECT MATTER OF AT LEAST TWO DECISIONS OF THE ALLAHABAD H IGH COURT. IN CIT V. RAJEEV SHARMA [2011] 336 ITR 6781[2010] 192 TAXMAN 197 (AL L.) IT WAS HELD THAT A 6 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. PLAIN READING OF SECTION 148 OF THE ACT REVEALS THA T WITHIN THE STATUTORY PERIOD SPECIFIED THEREIN, IT SHALL BE INCUMBENT TO SEND A NOTICE UNDER SECTION 143 (2) OF THE ACT. IT WAS OBSERVED: 'THE PROVISIONS CONTAINED IN SUB-SECTION (2) OF SEC TION 143 IS MANDATORY AND THE LEGISLATURE IN THEIR WISDOM BY USING THE WORD ' REASON TO BELIEVE' HAD CAST A DUTY ON THE ASSESSING OFFICER TO APPLY MIND TO TH E MATERIAL ON RECORD AND AFTER BEING SATISFIED WITH REGARD TO ESCAPED LIABIL ITY, SHALL SERVE NOTICE SPECIFYING PARTICULARS OF SUCH CLAIM. IN VIEW OF TH E ABOVE, AFTER RECEIPT OF RETURN IN RESPONSE TO NOTICE UNDER SECTION 148, IT SHALL BE MANDATORY FOR THE AO TO SERVE A NOTICE UNDER SUB-SECTION (2) OF SECTI ON 143 ASSIGNING REASON THEREIN. IN ABSENCE OF ANY NOTICE ISSUED UNDER SUB- SECTION (2) OF SECTION 143 AFTER RECEIPT OF FRESH RETURN SUBMITTED BY THE ASSE SSEE IN RESPONSE TO NOTICE UNDER SECTION, THE ENTIRE PROCEDURE ADOPTED FOR ESC APED ASSESSMENT, SHALL NOT BE VALID.' 15. IN A SUBSEQUENT JUDGMENT IN CIT V. SALARPUR COL D STORAGE (P.) LTD. [2014] 50 TAXMANN.COM 105/[2015] 228 TAXMAN 48 (ALL.) (MAG .) IT WAS HELD AS UNDER: '10. SECTION 292 BB OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2008 WITH EFFECT FROM 1 APRIL 2008. SECTION 292 BB OF THE ACT PROVIDES A DEEMING FICTION. THE DEEMING FICTION IS TO THE EFFECT THAT ONCE THE ASSESSEE HAS APPEARED IN ANY PROCEEDING OR COOPERATED IN ANY ENQUIRY RELATIN G TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UN DER THE PROVISIONS OF THE ACT, WHICH IS REQUIRED TO BE SERVED ON THE ASSESSEE , HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF TH E ACT. THE ASSESSEE IS PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDI NG OR ENQUIRY THAT THE NOTICE WAS (I) NOT SERVED UPON HIM; OR (II) NOT SER VED UPON HIM IN TIME; OR (III) SERVED UPON HIM IN AN IMPROPER MANNER. IN OTHER WOR DS, ONCE THE DEEMING FICTION COMES INTO OPERATION, THE ASSESSEE IS PRECL UDED FROM RAISING A CHALLENGE ABOUT THE SERVICE OF A NOTICE, SERVICE WI THIN TIME OR SERVICE IN AN IMPROPER MANNER. THE PROVISO TO SECTION 292 BB OF T HE ACT, HOWEVER, CARVES 7 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. OUT AN EXCEPTION TO THE EFFECT THAT THE SECTION SHA LL NOT APPLY WHERE THE ASSESSEE HAS RAISED AN OBJECTION BEFORE THE COMPLET ION OF THE ASSESSMENT OR REASSESSMENT. SECTION 292 BB OF THE ACT CANNOT OBVI ATE THE REQUIREMENT OF COMPLYING WITH A JURISDICTIONAL CONDITION. FOR THE ASSESSING OFFICER TO MAKE AN ORDER OF ASSESSMENT UNDER SECTION 143 (3) OF THE AC T, IT IS NECESSARY TO ISSUE A NOTICE UNDER SECTION 143 (2) OF THE ACT AND IN THE ABSENCE OF A NOTICE UNDER SECTION 143 (2) OF THE ACT, THE ASSUMPTION OF JURIS DICTION ITSELF WOULD BE INVALID.' 16. IN THE SAME DECISION IN SALARPUR COLD STORAGE ( P.) LTD. (SUPRA), THE ALLAHABAD HIGH COURT NOTICED THAT THE DECISION OF T HE SUPREME COURT IN HOTEL BLUE MOON (SUPRA) WHERE IN RELATION TO BLOCK ASSESS MENT, THE SUPREME COURT HELD THAT THE REQUIREMENT TO ISSUE NOTICE UNDER SEC TION 143(2) WAS MANDATORY. IT WAS NOT 'A PROCEDURAL IRREGULARITY AN D THE SAME IS NOT CURABLE AND, THEREFORE, THE REQUIREMENT OF NOTICE UNDER SEC TION 143(2) CANNOT BE DISPENSED WITH.' 17. THE MADRAS HIGH COURT HELD LIKEWISE IN SAPTHAGI RI FINANCE & INVESTMENTS V. ITO (2012] 25 TAXMANN.COM 341/210 TAXMAN 78 (MAD .) (MAG.). THE FACTS OF THAT CASE WERE THAT A NOTICE UNDER SECTION 148 O F THE ACT WAS ISSUED TO THE ASSESSEE SEEKING TO REOPEN THE ASSESSMENT FOR AY 20 00-01. HOWEVER, THE ASSESSEE DID NOT FILE A RETURN AND THEREFORE A NOTI CE WAS ISSUED TO IT UNDER SECTION 142 (1) OF THE ACT. PURSUANT THERETO, THE A SSESSEE APPEARED BEFORE THE AO AND STATED THAT THE ORIGINAL RETURN FILED SH OULD BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 O F THE ACT. THE HIGH COURT OBSERVED THAT IF THEREAFTER, THE AO FOUND THAT THER E WERE PROBLEMS WITH THE RETURN WHICH REQUIRED EXPLANATION BY THE ASSESSEE T HEN THE AO OUGHT TO HAVE FOLLOWED UP WITH A NOTICE UNDER SECTION 143(2) OF T HE ACT. IT WAS OBSERVED THAT: 'MERELY BECAUSE THE MATTER WAS DISCUSSED WITH THE A SSESSEE AND THE SIGNATURE IS AFFIXED IT DOES NOT MEAN THE REST OF T HE PROCEDURE OF NOTICE UNDER SECTION 143(2) OF THE ACT WAS COMPLIED WITH OR THAT ON PLACING THE OBJECTION 8 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. THE ASSESSEE HAD WAIVED THE NOTICE FOR FURTHER PROC ESSING OF THE REASSESSMENT PROCEEDINGS. THE FACT THAT ON THE NOTICE ISSUED U/S 143(2) OF THE ACT, THE ASSESSEE HAD PLACED ITS OBJECTION AND REITERATED IT S EARLIER RETURN FILED AS ONE FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF T HE ACT AND THE OFFICER HAD ALSO NOTED THAT THE SAME WOULD BE CONSIDERED FOR CO MPLETING OF ASSESSMENT, WOULD SHOW THAT THE AO HAS THE DUTY OF ISSUING THE NOTICE UNDER SECTION 143(3) TO LEAD ON TO THE PASSING OF THE ASSESSMENT. IN THE CIRCUMSTANCES, WITH NO NOTICE ISSUED U/S 143(3) AND THERE BEING NO WAIV ER, THERE IS NO JUSTIFIABLE GROUND TO ACCEPT THE VIEW OF THE TRIBUNAL THAT THER E WAS A WAIVER OF RIGHT OF NOTICE TO BE ISSUED U/S 143(2) OF THE ACT.' 18. AS ALREADY NOTICED, THE DECISION OF THIS COURT IN VISION INC. (SUPRA) PROCEEDED ON A DIFFERENT SET OF FACTS. IN THAT CASE , THERE WAS A CLEAR FINDING OF THE COURT THAT SERVICE OF THE NOTICE HAD BEEN EFFEC TED ON THE ASSESSEE UNDER SECTION 143 (2) OF THE ACT. AS ALREADY FURTHER NOTI CED, THE LEGAL POSITION REGARDING SECTION 292BB HAS ALREADY BEEN MADE EXPLI CIT IN THE AFOREMENTIONED DECISIONS OF THE ALLAHABAD HIGH COUR T. THAT PROVISION WOULD APPLY INSOFAR AS FAILURE OF 'SERVICE' OF NOTICE WAS CONCERNED AND NOT WITH REGARD TO FAILURE TO 'ISSUE' NOTICE. IN OTHER WORDS , THE FAILURE OF THE AO, IN RE- ASSESSMENT PROCEEDINGS, TO ISSUE NOTICE UNDER SECTI ON 143(2) OF THE ACT, PRIOR TO FINALIZING THE RE-ASSESSMENT ORDER, CANNOT BE CO NDONED BY REFERRING TO SECTION 292BB OF THE ACT. 19. THE RESULTANT POSITION IS THAT AS FAR AS THE PR ESENT CASE IS CONCERNED THE FAILURE BY THE AO TO ISSUE A NOTICE TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT SUBSEQUENT TO 16TH DECEMBER 2010 WHEN THE ASSES SEE MADE A STATEMENT BEFORE THE AO TO THE EFFECT THAT THE ORIGINAL RETUR N FILED SHOULD BE TREATED AS A RETURN PURSUANT TO A NOTICE UNDER SECTION 148 OF TH E ACT, IS FATAL TO THE ORDER OF RE-ASSESSMENT. 20. CONSEQUENTLY, THERE IS NO LEGAL INFIRMITY IN TH E IMPUGNED ORDER OF THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. THE AP PEAL IS DISMISSED.' 9 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. (VI) IN THE CASE OF PCIT VS. SILVER LINE [2016] 65 TAXMA NN.COM 137 (DEL.) IT HAS BEEN HELD BY THE HON'BLE HIGH COURT THAT A REAS SESSMENT ORDER CANNOT BE PASSED WITHOUT COMPLIANCE WITH THE MANDATORY REQUIR EMENT OF NOTICE BEING ISSUED BY THE AO TO THE ASSESSEE U/S 143(2) OF THE ACT, ITAT WAS IN THE PRESENT CASE RIGHT IN CONCLUDING THAT THE REASSESSM ENT ORDERS IN QUESTION WERE LEGALLY UNSUSTAINABLE. (VII) IN THE INSTANT CASE UNDER CONSIDERATION, IT I S AN ADMITTED FACT THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED BY THE AO T O THE APPELLANT WHEN THE APPELLANT STATED VIDE ITS LETTER DATED 26.03.2015 T HAT THE ORIGINAL RETURN OF INCOME FILED ON 31.07.2011 MAY BE TREATED AS RETURN OF INCOME IN COMPLIANCE TO NOTICE ISSUED U/S 148 OF THE ACT. THE ISSUE OF N OTICE U/S 143(2) OF THE ACT IS MANDATORY IN NATURE AND SINCE IN THE INSTANT CAS E UNDER CONSIDERATION, NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED, THE AO HAS NO JURISDICTION TO MAKE THE ASSESSMENT. FURTHER, NON ISSUE OF NOTICE U/S 14 3(2) OF THE ACT IS EVEN NOT CURABLE BY THE PROVISIONS OF SECTION 292BB OF THE A CT AS HELD BY A NUMBER OF JUDICIAL AUTHORITIES AS STATED EARLIER IN THIS ORDE R AND AS RELIED UPON BY THE APPELLANT. (VIII) THEREFORE, IN VIEW OF THE ABOVE DISCUSSION A ND THE JUDICIAL PRONOUNCEMENTS, IT IS HELD THAT THE ASSESSMENT ORDE R UNDER CONSIDERATION WAS VOID AB INITIO AND THUS QUASHED. HOWEVER, THE AO IS FREE TO INITIATE FRESH ASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 OF THE ACT, IF DEEMED FIT. IT IS CLARIFIED THAT THESE ARE NOT T O BE CONSIDERED AS THE DIRECTIONS TO THE AO FOR ISSUE OF NOTICE U/S 148 OF THE ACT. THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THIS F INDING. SECTION 251 OF THE ACT CONFERS FOLLOWING POWERS ON CIT(A):- 10 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. (1). IN DISPOSING OF AN APPEAL, THE [COMMISSIONER (APPEALS)] SHALL HAVE THE FOLLOWING POWERS- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUAL THE ASSESSMENT. [(AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABATES UNDER SECTION 245H A, HE MAY, AFTER TAKING INTO CONSIDERATION ALL THE MATERIAL AND OTHER INFORMATION PRODUCED BY THE ASSESSEE BEFORE, OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY, THE SETTLEMENT COMMIS SION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CONFIRM, REDUCED, ENHANCE OR ANNUAL THE ASS ESSMENT.] (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, H E MAY CONFIRM OR CANCLE SUCH ORDER OR VARY IT SO AS EITHER TO ENHANC E OR TO REDUCE THE PENALTY. (C) IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE A PPEAL AS HE THINKS FIT. (2) THE [COMMISSIONER (APPEALS)] SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCED THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST S UCH ENHANCEMENT OR REDUCTION. [EXPLANATION- IN DISPOSING OF AN APPEAL, THE [COMMI SSIONER (APPEALS)] MAY CONSIDER AND DECIDED ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSES, NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE [COMMISSIONER (APPEALS)] BY THE A PPELLANT. FROM THE ABOVE, IT IS CLEAR THAT THE LD. CIT(A) IS NOT EMPOWERED TO DIRECT THE AO FOR MAKING FRESH ASSESSMENT. THEREFORE, WE MODIFY THE ORDER OF THE LD. CIT(A). THE LIBERTY AS GIVEN BY THE LD. CIT(A) TO THE AO IN PAR A 3.1.2 FOR MAKING FRESH REASSESSMENT IS HELD TO BE NOT WITHIN THE POWER OF THE LD. CIT(A) U/S 251 OF THE ACT. 11 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR. ACCORDINGLY, SAME IS HEREBY QUASHED. THUS, GROUND NO. 1 TO 2 OF THIS ORDER IS ALLOWED IN THE TERMS AS STATED HEREIN BEFORE. 5 . GROUND NOS. 2.1 TO 2.3 ARE ON MERIT. LD. CIT(A) HAS NOT GIVEN ANY FINDIN G ON THESE GROUNDS. MOVEROVER, WE HAVE SUSTAINED THE FINDING OF THE LD. CIT(A) FOR QUASHING THE ASSESSMENT. THEREFORE, THESE GROUNDS HAVE BECOME ACADEMIC ONLY. 6 . GROUND NO. 3 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 31 ST DAY OF OCTOBER 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 31/10/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S PADAM CHAND DHADDA HUF, JAIPU R. 2. THE RESPONDENT- ASSISTANT COMMISSIONER OF INCOME TAX, CIRLCE-1, JAIPUR. 3. THE CIT 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 40/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 12 ITA NO. 40/JP/2017. M/S PADAM CHAND DHADDA HUF, JAIPUR.