M/S. ANADI KUNJ, Indore V. THE ITO Ward - 3(1), Indore

ITA 42/IND/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5905 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: K C AGARWAL
• Keywords: Retrospective amendment; Validity of assessment; Procedural lapse; Reassessment proceedings
• Section: 142(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 42/IND/2015 ASSESSMENT YEAR: 2007- 08 M/S. ANADI KUNJ, 304AD SCHEME NO.74-C, VIJAY NAGAR, INDORE VS. ITO WARD 3(1), INDORE APPELLANT RESPONDENT APPELLANTS BY SHRI K.C. AGARWAL, CA RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 27.07.2016 DATE OF PRONOUNCEMENT 27.07.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-I, INDORE [HER EINAFTER REFERRED TO AS THE CIT(A)] DATED 24.09.2014 AND PER TAINS TO ASSESSMENT YEAR 2007-08 AS AGAINST APPEAL DECIDED I N ASSESSMENT ORDER DATED 29.12.2009 PASSED U/S. 143(3 ) OF INCOME TAX ACT,1961( HEREIN AFTER REFERRED TO AS 'T HE ACT) BY THE ITO WARD 3(1) INDORE [HEREINAFTER REFERRED TO A S THE AO]. ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 2 OF 12 2 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE READS AS UNDER :- GROUND NO.1 : ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-II, INDORE HAS ERRED IN TREATING THE NOTICE SERVED U/S. 143(2)(III) BEYOND TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FILED, AS RATIFIED, IN VIEW OF APPLICABILITY OF PROVISIONS OF SECTION 292BB FROM 01.04.2008. IN VIEW OF JUDICIAL PRONOUNCEMENTS PROVISIONS OF SECTION 292BB ARE APPLICABLE TO THE MATTER RELEVANT TO ASSESSMENT YEAR 2008-09 AND ONWARDS AND THUS, NOTICES U/S. 143(2) WAS TIME BARRED AND THE ASSESSMENT SO FRAMED IS AB- INITIO-VOID. GROUND NO.2 RELATES TO MAINTAINING THE ADDITION OF RS. 13,50,000/- BY TREATING UNSECURED LOANS TAKEN FROM FARMERS WHO HAVE ACCEPTED GRANTING SUCH LOANS TO THE ASSESSEE. GROUND NO.3 RELATES TO MAINTAINING DISALLOWANCE MADE U/S.40A(3) OF RS. 1,08,554/- GROUND NO.4 RELATES TO AGRICULTURE INCOME OF RS. 1,25,498/- INCLUDED IN TOTAL INCOME, WHICH DOES NOT FORM PART OF TOTAL INCOME. 3. THE FACT APROPOS TO GROUND NO.1 ARE THAT THE RETURN OF INCOME WAS FILED ON 24.07.2007 DECLARING TOTAL I NCOME OF ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 3 OF 12 3 RS.1,25,498/-. THE NOTICE U/S. 143(2) WAS ISSUED ON 26.09.2008 AND SERVED ON 30.09.2008 FIXING DATE OF HEARING FOR 06.10.2008. DUE TO CHANGE OF INCUMBENT, AGAIN A NOTICE U/S. 142(1) WAS ISSUED ON 19.02.2009 FIXING THE CAS E FOR HEARING ON 03.04.2009. IN COMPLIANCE TO THIS SHRI A NIL GARG CA, ATTENDED AND REQUESTED FOR ADJOURNMENT FOR 06.05.2009. DURING THE COURSE OF APPEAL PROCEEDING , IT WAS CLAIMED THAT THE NOTICE U/S.143(2) HAS BEEN ISSUED BEYOND TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH RE TURN WAS FURNISHED, WHICH IS IN VIOLATION OF CLAUSE AND THEREFORE THE ASSESSMENT MADE ON THE BASIS OF SAID NOTICE I S INVALID AB-INITIO. HOWEVER, LD. CIT(A)HELD THAT THE ASSESSE E HAS APPEARED IN ASSESSMENT PROCEEDING AND COOPERATED IN ASSESSMENT BEFORE THE A.O. , THEREFORE, AS PER PR OVISIONS OF SECTION 292BB, THE ASSESSEE HAS PRECLUDED TO TAKE A NY OBJECTION IN ANY PROCEEDING, HENCE, NOTICE IS DEEM ED TO BE VALID. THE ARGUMENT THAT SECTION 292B IS APPLICABLE FROM 01.04.2008 NOT CORRECT AS NOTICE U/S.143(2) WAS ISS UED AND SERVED AFTER 01.04.2008 ONLY. THE PROVISION OF SECT ION 292BB IS CURATIVE IN NATURE AND WOULD CURE ALL DEF ICIENCIES ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 4 OF 12 4 REGARDLESS OF THE FACT THAT THEY WERE SERVED BEFORE 01.04.2008. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NOTICE U/S. 143(2) WAS ISSUED BEYOND TIME LIMIT PRE SCRIBED IN THE STATUTE AND THE REVENUE AUTHORITIES CANNOT T AKE THE SHELTER OF SEC.292BB OF THE ACT AS THE SAID SECTION IS APPLICABLE FROM THE A.Y. 2008-09 AND NOT PRIOR TO T HAT. HE SUBMITS THAT SERVICE OF THE NOTICE U/S.143(2) IS NO T PROCEDURAL IRREGULARITY BUT BEING IT IS A MANDATORY , NON SERVICE OF THE SAME IS ILLEGALITY WHICH IS NON-CURA BLE. HE PLEADED FOR CANCELLING THE ASSESSMENT ORDER ON THIS GROUND. THE LD. A.R. ALSO PLACED HIS HEAVY RELIANCE ON THE FOLLOWING DECISIONS: KUBER TOBACCO PRODUCTS P LTD. VS. DCIT ( 120 TTJ557/117 ITD2 (SB-DEL), CIT VS. BHARAT G PATEL (2 014)(2) TMI517(GUJ), ITO VS. MOHD KHALIQ 60 DTR196 (LUCKNOW)(TRIB), BIPIN KUMAR TANDON VS. ITO (ITAN2487/AHD/2010) AHMEDBAD, ASHOK B BAFANA VS. DCIT 18ITR (TRIB)43(MUM), DCIT VS. SHRIKANT RATHI 19TTJ207 (INDORE), VINAY KUMAR RAMAWAT VS. CIT 19 TTJ328 (INDORE), CIT VS. PREMIER CAPITAL MARKET & INVESTMENT LTD. 275 ITR 260 (MP), CIT VS. METACHEM ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 5 OF 12 5 INDUSTRIES 245 ITR160 (MP), ADDITIONAL CIT VS. HANU MAN AGARWAL 151 ITR150 (PATNA), MANSFIELD & SONS VS. C IT 48 ITR254(CAL), CIT VS. MARGRETS HOPE TEA COMPANY LTD. 201 ITR 747(CAL) 5. PER CONTRA, THE LD. D.R. SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. HE ALSO DREW THE AMENDMENT MADE IN SECTION 292BB IS CURATIVE IN NATURE, HENCE, WHEN TH E ASSESSEE HAS COMPLIED WITH ASSESSMENT PROCEEDING ME ANS THAT THE NOTICE U/S. 143(2) DEEMED TO HAVE BEEN IS SUED. THE LD. D.R. HARPED UPON THE A.O. HAVING ISSUED NOT ICE AFTER 01.04.2008 THOUGH BELATEDLY AND THE ASSESSEE HAVING PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. THE LD . A.R. HAS CONTENDED THAT IN VIEW OF SUBSTANTIAL COMPLIANC E OF PROCEDURAL REQUIREMENT AND IN VIEW OF THE ASSESSEE `S PARTICIPATION IN THE ASSESSMENT PROCEEDINGS, NO INV ALIDITY TO THE ASSESSMENT ORDER SHOULD BE ATTACHED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THIS CASE THE ASSESSEE HAS FILED THE RETURN OF INCO ME, WHICH WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLE TED U/S.143(3)(II) OF THE ACT. THE UNDISPUTED FACT IN T HIS CASE IS ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 6 OF 12 6 THAT THOUGH THE NOTICE U/S.143(2) WAS ISSUED ON 26. 09.2008 TO THE ASSESSEE, WHICH IS BEYOND THE PRESCRIBED STA TUTORY TIME LIMIT PRESCRIBED. NOW THE LAW IS WELL SETTLED THAT IT IS MANDATORY ON THE A.O. TO ISSUE THE NOTICE U/S.143(2 ) AND SERVED THE SAME ON THE ASSESSEE WITHIN 12 MONTHS FR OM THE END OF THE MONTH IN WHICH THE ASSESSEE HAS FILED TH E RETURN OF INCOME. THE LD. A.R. FOR THE ASSESSEE HAS PLACED RELIANCE ON CATENA OF DECISIONS AS CITED ABOVE. THE RELIANCE IS PLACED IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD. (120 TTJ 557) (117 ITD2) (SB-DEL) WHEREIN THE HON'BLE SPECIAL BEN CH OF THE TRIBUNAL HAS CONSIDERED THIS ISSUE AND HAS HELD AS UNDER:- '39. NOW, WE PROCEED TO EXAMINE THAT WHETHER S. 292BB CAN BE CONSTRUED TO BE RETROSPECTIVE IN THE LIGHT OF THE ABOVE PRINCIPLES. IT IS ALSO OBSERVED THAT S. 292BB HAS BEEN MADE EFFECTIVE BY THE LEGISLATURE FROM 1ST APRIL, 2008 AND THERE IS NOTHI NG IN THE ENACTMENT TO SHOW THAT S. 292BB HAS RETROSPECTIVE OPERATION. IF IT IS SO, ACCORDING TO RULE OF INTERPRETATION DESCRIBED ABOVE, S. 292BB CANNOT BE CONSTRUED RETROSPECTIVELY. 40. ACCORDING TO ABOVE-MENTIONED PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT, EVERY LITIGANT HAS A VESTED RIGHT IN SUBSTANTIVE LAW, BUT NO LITIG ANT HAS SUCH RIGHT IN PROCEDURAL LAW. NO DOUBT, ISSUE A ND SERVICE OF NOTICE THOUGH MAY RELATE TO PROCEDURAL L AW, BUT WHERE PROCEDURAL STATUTE CREATES A NEW DISABILI TY OR OBLIGATION AND IMPOSES NEW DUTIES IN RESPECT OF TRANSACTIONS ALREADY ACCOMPLISHED, THEN THE STATUTE CANNOT BE CONSTRUED TO HAVE RETROSPECTIVE EFFECT. ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 7 OF 12 7 41. IT HAS ALREADY BEEN POINTED OUT THAT ISSUE AND SERVICE OF NOTICE IN THE MANNER PRESCRIBED BY THE STATUTE HAVE PLAYED A VITAL ROLE IN DETERMINING THE VALIDIT Y OR OTHERWISE OF ASSESSMENT/REASSESSMENT AND OTHER PROCEEDINGS UNDER THE ACT AND WHERE THE COURTS HAVE FOUND DEFECT EITHER IN THE NOTICE OR IN ITS PROPER SERVICE, THE VALIDITY OF ASSESSMENT/ REASSESSMENT AND OTHER PROCEEDINGS HAS BEEN STRUCK DOWN BY THE COURTS SUBJ ECT, OF COURSE, TO S. 292B OF THE ACT INTRODUCED W.E.F. 1ST OCT., 1975. THUS, TO CHALLENGE THE VALIDITY OF A PARTICUL AR ACTION OF THE DEPARTMENT OF MAKING ASSESSMENT OR REASSESSM ENT ON THE BASIS OF INVALIDLY ISSUANCE/SERVICE OF NOTIC E HAD BECOME RIGHT OF LITIGANT ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS EVEN THOUGH SUCH CONTENTION W AS NEVER RAISED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. INSTANCES OF STRIKING DOWN THE VALIDIT Y OF ASSESSMENT AND REASSESSMENT PROCEEDINGS HAVE ALREAD Y BEEN DISCUSSED IN THE EARLIER PART OF THIS ORDER. B Y INSERTION OF S. 292BB SUCH RIGHT OF THE ASSESSEE TO CHALLENGE THE VALIDITY OF ASSESSMENT OR REASSESSMEN T PROCEEDINGS DURING THE COURSE OF APPELLATE PROCEEDI NGS HAS BEEN TAKEN AWAY BY THE STATUTE W.E.F. 1ST APRIL , 2008. IT IS ALSO OBSERVED THAT THE ISSUE AND SERVICE OF N OTICE RELATE TO PROCEDURAL LAW, BUT, AT THE SAME TIME, IT CREATED A NEW DISABILITY ON THE ASSESSEE LITIGANT TO THE EX TENT THAT HE IS DEBARRED FROM TAKING A PLEA IN THE APPELLATE PROCEEDINGS TO CHALLENGE THE VALIDITY OF THE SAME O N THE GROUND OF VALID ISSUANCE/SERVICE OF NOTICE REQUIRED TO BE GIVEN BY THE STATUTE IN A CASE WHERE ASSESSEE HAS APPEARED IN SUCH PROCEEDINGS OR CO- OPERATED IN THE INQUIRY RELATING TO ASSESSMENT OR REASSESSMENT. THEREFORE, APPLYING THE ABOVE PRINCIPLES OF INTERPRETATION AND KEEPING IN VIEW ABOVE DISCUSSION IT HAS TO BE HELD THAT S. 292BB CANNOT BE CONSTRUED TO HAVE RETROSPECTIVE OPERATION AND IT HAS TO BE APPLIED PROSPECTIVELY. 42. HAVING ARRIVED AT THE CONCLUSION THAT S. 292BB HAS NO RETROSPECTIVE EFFECT AND IS TO BE CONSTRUED PROSPECTIVELY, IT HAS TO BE HELD THAT PRIOR TO 1ST APRIL, ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 8 OF 12 8 2008, I.E., UPTO 31ST MARCH, 2008, AS PER S. 292BB , THE ASSESSEE IS NOT PRECLUDED FROM TAKING ANY OBJECTION (HEREINAFTER REFERRED TO AS 'SUCH OBJECTION') REGAR DING INVALIDITY OF ASSESSMENT/REASSESSMENT ON THE GROUND OF IMPROPER/INVALID ISSUANCE/SERVICE OF A NOTICE. 43. THE SECOND ASPECT WHICH REQUIRES TO BE CONSIDERED IS THAT WHEN ASSESSEE CAN BE SAID TO BE PRECLUDED FROM TAKING SUCH OBJECTION S. 292BB HAS BEEN MADE APPLICABLE W.E.F. 1ST APRIL, 2008 BY THE FINANCE ACT , 2008. AS PER WELL ESTABLISHED LAW AS EXPLAINED BY HON'BLE SUPREME COURT IN THE CASE OF KARIMTHARUVI TEA ESTATE LTD. VS. STATE OF KERALA (1966) 60 ITR 262 (SC) (WHICH IS A DECISION RENDERED BY FIVE JUDGES O F HON'BLE SUPREME COURT) THAT THE IT ACT AS IT STANDS AMENDED ON THE FIRST DAY OF ANY FINANCIAL YEAR MUST APPLY TO THE ASSESSMENTS OF THAT YEAR. THE FACTS IN THAT CASE WERE THAT FOR ASST. YR. 1957-58 THE COMPANY WAS ASSESSED TO AGRICULTURAL INCOME-TAX UNDER THE KERALA AGRL. IT ACT , 1950 AND IN THE ASSESSMENT SURCHARGE @ 5 PER CENT ON THE AGRICULTURAL INCOME-TAX AND SUPER-TAX WAS LEVIED AN D COLLECTED FROM THE ASSESSEE UNDER THE PROVISIONS OF SURCHARGE ACT . THE LEVY OF SURCHARGE WAS AGITATED BY THE ASSESSEE ON THE GROUND THAT SURCHARGE ACT CAME INTO FORCE ONLY FROM 1ST SEPT., 1957 AND, THEREFORE, IT DOES NOT HAVE RETROSPECTIVE EFFECT AN D SURCHARGE COULD NOT BE LEVIED FOR ASST. YR. 1957-58 . SUCH CONTENTION OF THE ASSESSEE WAS REJECTED BY THE AO AS WELL AS BY THE FIRST APPELLATE AUTHORITY. HOWEVER, THE TRIBUNAL HELD THAT SURCHARGE COULD NOT BE LEVIED AS SURCHARGE ACT DID NOT HAVE RETROSPECTIVE OPERATION UNLESS THERE WAS A SPECIFIC PROVISION THEREIN TO THAT EFFECT AND THE QUESTION O F LAW WAS REFERRED TO KERALA HIGH COURT TO STATE THAT WHETHER SURCHARGE COULD BE LEVIED FOR ASST. YR. 195 7- 58. THE HON'BLE HIGH COURT DECIDED THE QUESTION IN FAVOUR OF THE REVENUE AND, THUS, THE MATTER WENT TO HON'BLE SUPREME COURT AND THEIR LORDSHIPS OF HON'BL E SUPREME COURT HAVE OBSERVED THAT THE LAW IS WELL- SETTLED THAT THE IT ACT AS IT STANDS AMENDED ON THE ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 9 OF 12 9 IST APRIL OF ANY ASSESSMENT YEAR MUST APPLY TO THAT ASSESSMENT YEAR. ANY AMENDMENTS IN THE ACT WHICH COME INTO FORCE AFTER THE 1ST DAY OF APRIL OF AN ASSESSMENT YEAR, WOULD NOT APPLY TO THAT ASSESSMENT YEAR, EVEN IF THE ASSESSMENT IS ACTUALLY MADE AFTER THE AMENDMENTS COME INTO FORCE. THEIR LORDSHIPS REFERRED TO THE EARLIER DECISION OF APEX COURT IN THE CASE OF CIT VS. SCINDIA STEAM NAVIGATION COMPANY LTD . (SUPRA) IN WHICH SIMILAR PROPOSITION OF LAW WAS LAID DOWN WHILE INTERPRETING S. 10(2)(VII) AND PROVISO (IV) AND S. 66(1) , (2) AND (5) AND IN THE SAID CASE IT WAS HELD THAT THE PROVISO THOUGH CAME INTO FORCE ON 5TH MAY, 1946 COULD NOT BE MADE OPERATIVE FROM 1ST APRIL, 1946 AND, THEREFORE, NO RETROSPECTIVE EFFECT COULD BE GI VEN TO THAT PROVISION BY ACCEPTING THE CONTENTION OF TH E REVENUE. IN THAT CASE THE REVENUE HAS SOUGHT TO APPLY PROVISO FOR ASST. YR. 1946-47 DESPITE THE FAC T THAT THE PROVISO HAD COME INTO FORCE FROM 5TH MAY, 1946 AND IT WAS HELD THAT THE PROVISO IS NOT RETROSPECTIVE AND IT WAS HELD THAT THE COURT CANNOT IMPORT INTO ITS CONSTRUCTION MATTERS WHICH ARE 'AD EXTRA LEGIS' AND THEREBY ALTER ITS TRUE EFFECT. IT WILL BE RELEVANT TO REPRODUCE THE OBSERVATIONS OF THEIR LORDSHIPS FROM THE SAID DECISION : 'IT IS WELL-SETT LED THAT THE IT ACT , AS IT STANDS AMENDED ON THE FIRST DAY OF APRIL OF ANY FINANCIAL YEAR MUST APPLY TO THE ASSESSMENTS OF THAT YEAR. ANY AMENDMENTS IN THE ACT WHICH COME INTO FORCE AFTER THE FIRST DAY OF APR IL OF A FINANCIAL YEAR, WOULD NOT APPLY TO THE ASSESSMENT FOR THAT YEAR, EVEN IF THE ASSESSMENT IS ACTUALLY M ADE AFTER THE AMENDMENTS COME INTO FORCE. IN SCINDIA STEAM NAVIGATION CO. LTD. VS. CIT , A DIVISION BENCH OF THE BOMBAY HIGH COURT CONSISTING OF CHAGLA, C.J. AND TENDOLKAR J., HAS CONSIDERED THE QUESTION AS TO THE EFFECT OF AN AMENDMENT WHICH CAME INTO FORCE AFTER THE COMMENCEMENT OF THE FINANCIAL YEAR. THE FACTS IN THAT CASE WERE THESE. THE ASSESSEE'S SHIP WAS LOST AS A RESULT OF ENEMY ACTION. THE GOVERNMEN T PAID THE ASSESSEE IN 1944 A CERTAIN AMOUNT AS COMPENSATION WHICH EXCEEDED THE ORIGINAL COST OF TH E ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 10 OF 12 10 SHIP. THE ITO INCLUDED THE DIFFERENCE BETWEEN THE ORIGINAL COST AND THE WDV OF THE SHIP IN THE TOTAL INCOME OF THE ASSESSEE FOR THE ASST. YR. 1946-47. T HE TRIBUNAL UPHELD THAT DECISION AND REFERRED THE QUESTION, WHETHER THE SUM REPRESENTING THE DIFFERENCE BETWEEN THE ORIGINAL COST AND THE WDV WAS PROPERLY INCLUDED IN THE ASSESSEE'S TOTAL INCOM E COMPUTED FOR THE ASST. YR. 1946-47. IT WAS ARGUED THAT THE FOURTH PROVISO TO S. 10(2)(VII) OF THE IT ACT (INSERTED BY THE AMENDMENT ACT OF 1946 W.E.F. 4TH MAY, 1946) UNDER WHICH THE INCLUSION OF THE AMOUNT WAS JUSTIFIED BY THE DEPARTMENT, HAD NO APPLICATION TO THE CASE. THE LEARNED JUDGES HELD THAT AS IT WAS THE FINANCE ACT OF 1946 THAT IMPOSED THE TAX FOR THE ASST. YR. 1946-47, THE TOTAL INCOME HAD TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE IT ACT AS ON 1ST APRIL, 1946; THAT AS THE AMENDMENTS MADE BY THE AMENDMENT ACT OF 1946 W.E.F. 4TH MAY, 1946, WERE NOT RETROSPECTIVE, THEY COULD NOT B E TAKEN INTO CONSIDERATION MERELY BECAUSE THE ASSESSEE WAS ASSESSED AFTER THAT DATE AND THAT THE ASSESSEE WAS NOT LIABLE TO PAY TAX ON THE SUM BECAUSE THE FOURTH PROVISO TO S. 10(2)(VII) OF THE IT ACT UNDER WHICH IT WAS SOUGHT TO BE TAXED WAS NOT IN FORCE IN RESPECT OF THE ASST. YR. 1946-47. 44. IF THE PRESENT ISSUE IS CONSIDERED IN THE LIGHT OF THE ABOVE DECISION OF HON'BLE SUPREME COURT, THEN, IT HAS TO BE HELD THAT S. 292BB IS APPLICABLE TO ASST. YR. 2008-09 AND SUBSEQUENT YEARS. THEREFORE, ANSWER TO THE SECOND ASPECT OF THE QUESTION IS THAT ASSESSEE IS PRECLUDED FROM TAKING SUCH OBJECTION FO R AND FROM ASST. YR. 2008-09. 45. SUMMARISING OUR FINDINGS, WE HOLD AS FOLLOWS : (I) SEC. 292BB EVEN IF IT IS PROCEDURAL IT IS CREATING A NEW DISABILITY AS IT PRECLUDES THE ASSESSEE FROM TAKING A PLEA WHICH COULD BE TAKEN AS A RIGHT, CANN OT BE CONSTRUED RETROSPECTIVELY AS THE SAME IS MADE APPLICABLE BY THE STATUTE W.E.F. 1ST APRIL, 2008. ( II) ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 11 OF 12 11 SEC. 292BB IS APPLICABLE TO THE ASST. YR. 2008-09 A ND SUBSEQUENT ASSESSMENT YEARS.' 7. WE, THEREFORE, RESPECTFULLY FOLLOWING THE PRIN CIPLES LAID DOWN BY THE HON'BLE SPECIAL BENCH IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD. (120 TTJ557/117 ITD 2 (SB-DEL), HOLD THAT EVEN IF IN THE PRESENT ASSESSME NT YEAR IN I.E. A.Y. 2007-08, THE ASSESSEE HAS FULLY PARTICIPATED IN THE ASSESSMENT PROCEEDING AND EVEN DID NOT RAISE ANY OBJECTION TILL THE COMPLETION OF THE SAID PROCEEDINGS, YET THE ASSESSEE CAN VALIDLY RAISED AN OBJECTION FOR NON SERVICE OF THE NOTICE U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT PRESCRIBE VIDE PROVISO TO SAID SUB-SECTION, AS SEC. 292BB OF THE ACT IS APPLICABLE FROM THE A.Y. 2008-09. IN THIS CASE, ADMITTEDLY, THE A.O . HAS HAS SERVED THE NOTICE U/S. 143(2) ON 30.09.2008 I.E . AFTER THE EXPIRY OF TWELVE MONTHS FROM 24.07.2007 I.E. TH E DATE OF FILING OF RETURN OF INCOME. WE FIND NO MERIT IN THE PLEA OF THE LD. D.R. THAT THE NOTICE WAS ISSUED AFTER 1. 4.2008 HENCE PROVISION OF SECTION 292BB ARE APPLICABLE AS AMENDMENT IS EFFECTIVE FOR AY2008-09 ONWARDS ONLY AS DISCUSSED ABOVE. WE, THEREFORE, HOLD THAT ASSESSME NT ORDER PASSED BY THE A.O. U/S.143(3) IS BAD IN LAW A ND WE ACCORDINGLY CANCEL THE SAME. GROUND NOS.2 , 3 &4 TA KEN BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. AS WE H AVE CANCELLED THE ASSESSMENT ORDER ITSELF BY ALLOWING G ROUND. NOS. 2 3 & 4 , WE DO NOT GO INTO THE OTHER GROUNDS TAKEN ON THE MERITS OR OTHERWISE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ITA NO.42/IND/2015/AY 07-08 ANAND KUNJ PAGE 12 OF 12 12 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT O N 25TH, JULY,2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED :4TH, AUGUST, 2016. OPM* COPY FORWARDED TO:- 1. THE ASSESSEE/2. THE AO CONCERNED/3. THE LD. PCIT CONCERNED 4. THE LD. CIT(A)/5. THE LD. DR, INDORE/6. THE GUAR D FILE BY ORDER A.R. ITAT, INDORE