Dr. Anisur Rahaman, Kolkata V. ITO, Ward -55(2), Kolkata, Kolkata

ITA 462/KOL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4153 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-09-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 18-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K CLALDA JCITSRDR
• Keywords: Assessment record; Reassessment proceedings
• Section: 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 462 / KOL / 2011 ASSESSMENT YEAR :2001-02 DR. ANISUR RAHAMAN 175, PARK STREET, KOLKATA-700 017 [ PAN NO.AFVPR 3334 N ] V/S . INCOME TAX OFFICER, WARD-55(2), 54/1 RAFI AHMED KIDWAI ROAD, KOLKATA-700 017 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SOMNATH GHOSH, ADVOCATE /BY RESPONDENT SHRI M.K. CLALDA, JCIT-SR-DR /DATE OF HEARING 10-11-2016 /DATE OF PRONOUNCEMENT 09-12-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA DATED 09.02.2011. ASSESSMENT WAS FRAMED BY ITO WARD-55(2), KOLKATA U/ S 147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 30.12.2009 FOR ASSESSMENT YEAR 2001-02. SHRI SOMNATH GHOSH, LD. ADVOCATE APPEARED ON BEHALF OF ASSESSEE AND SHRI M.K. CLALDA, LD. DEPARTMENTAL REPRESENTATIVE APPEAR ED ON BEHALF OF REVENUE. 2. THE GROUNDS RAISED BY ASSESSEE, PER ITS APPEAL A RE AS UNDER:- 1. FOR THAT THE ASSESSMENT ORDER DATED 30.12.2009 F RAMED U/S 147/143(3) IS VOID AND NULLITY IN THE EYE OF LAW AS THERE ARE NO RECORDED REASONS TO BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T. ITA NO. 462/KOL/2011 A.Y. 2001 -02 DR. ANISUR RAHAMAN VS. ITO WD-55(2) KOL. PAGE 2 2. WITHOUT PREJUDICE TO THE GROUND NO. 1 STATED ABO VE, THE RECORDED REASONS ARE INVALID AND IMPROPER AND AS SUCH, THE ASSESSMEN T FRAMED VIDE ORDER DATED 30.12.2009 IS BAD IN LAW. 3. FOR THAT THE ASSESSMENT U/S. 147(143(3) IS BAD I N LAW IN THE ABSENCE OF PROPER SANCTION FOR THE NOTICE U/S. 148. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 3,57,575/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED DEPOSITS IN THE BANK ACC OUNTS. 5. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE L. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,17,999/- M ADE BY THE AO ON ACCOUNT OF ALLEGED DIFFERENCE IN OPENING AND CLOSING CAPIT AL. 3. AT THE OUTSET WE FIND THAT THE ASSESSEE HAS CHAL LENGED THE RE- ASSESSMENT ORDER U/S. 147/143(3) OF THE ACT ON THE GROUND THAT NO NOTICE U/S. 143(2) WAS ISSUED BY ASSESSING OFFICER BEFORE MAKIN G THE ASSESSMENT UNDER SECTION 147 OF THE ACT. 4. BEFORE US LD. AR FOR THE ASSESSEE FILED A PAPER BOOK COMPRISING OF PAGES FROM 1 TO 51 AND SUBMITTED THAT IN THE INSTAN T CASE THE AO ASSUMED JURISDICTION ON 31-03-2008 TO ISSUE NOTICE U/S 148 OF THE ACT. THERE IS NO DISPUTE THAT IN RESPONSE TO THE NOTICE ISSUED U/S 1 48 OF THE ACT BY THE LD. ASSESSING OFFICER THE APPELLANT HAD FILED A RETURN ON 29-04-2009. HOWEVER, THE LD. ASSESSING OFFICER DID NOT AT ANY POINT OF T IME ISSUE NOTICE U/S. 143(2) OF THE INCOME TAX ACT 1961 IN THE COURSE OF THE REA SSESSMENT PROCEEDING. THE ISSUANCE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT 1961 IS A SINE QUA NON FOR SCRUTINIZING A RETURN AND THE FAILURE TO CO MPLY WITH SUCH MANDATORY REQUIREMENT WILL RENDER THE PROCEEDING AND THE RE-A SSESSMENT ORDER PASSED INVALID. THE ASSESSEE IS REQUIRED TO BE SERVED WITH NOTICE U/S143(2) OF THE ACT FOR SCRUTINIZING THE RETURN FILED U/S. 148 OF THE A CT IN THE SAME MANNER AS IN THE CASE OF A RETURN FILED U/S 139 OF THE ACT AND SUCH OMISSION INVALIDATES THE ORDER PASSED U/S. 147/143(3) OF THE ACT, WHERE THE AO HAD FAILED TO SERVE NOTICE U/S 143(2) WITHIN THE STIPULATED PERIOD AS P ROVIDED UNDER THAT SECTION. THE AO LOST HIS JURISDICTION TO MAKE A RE-ASSESSMEN T ORDER U/S. 143(3)/147 OF THE ACT. LASTLY, LD AR REQUESTED THE BENCH TO DECID E THE ISSUE ON MERIT AFTER QUASHING THE RE-ASSESSMENT PROCEEDING ISSUED BY ASS ESSING OFFICER. ITA NO. 462/KOL/2011 A.Y. 2001 -02 DR. ANISUR RAHAMAN VS. ITO WD-55(2) KOL. PAGE 3 5. ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON T HE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO PERUSED THE ASSESSMENT RECORDS. IT IS A FACT THAT THE ASSESSEE COMPANY FILED RETURN OF INCOME ON 9.1.2002 AND SUBSEQUENTLY NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 31.03.2008. THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 14 8 OF THE ACT FILED ITS RETURN OF INCOME ON 29.4.2009. FROM THE ASSESSMENT RECORDS , IT IS NOTICED THAT THERE IS NO NOTICE U/S. 143(2) OF THE ACT WAS ISSUED. THE ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT IS ALSO NOT APPEARING FRO M THE ASSESSMENT ORDER PASSED UNDER SECTION 147 OF THE ACT. SIMILARLY THE ORDER SHEET OF THE AO WHICH IS PLACED ON PAGES 51-52 OF THE PAPER BOOK IS SILEN T ABOUT THE ISSUANCE OF NOTICE. WE FIND THAT BY VIRTUE OF SECTION 143(2) OF THE ACT THE ASSESSEE HAS BEEN GIVEN OPPORTUNITY TO SUBSTANTIATE THE RETURN F ILED. THEREFORE, FOR INITIATING SCRUTINY ASSESSMENT OR REASSESSMENT PROCEEDINGS SER VICE OF NOTICE U/S. 143(2) OF THE ACT IS A CONDITION PRECEDENT. HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (2010) 321 ITR 362 (SC) AND ALSO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJEEV SHARMA (2010) 232 CTR (ALL.) 303 HAS HELD THAT NON ISSUE OF NOTIC E U/S. 143(2) OF THE ACT AFTER FILING OF RETURN BY ASSESSEE IN RESPONSE TO N OTICE U/S. 148 OF THE ACT VITIATES THE ASSESSMENT ORDER OR REASSESSMENT P ROCEEDINGS. CONSIDERING THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING TH E JUDICIAL PRONOUNCEMENTS IN THE CASE OF HOTEL BLUE MOON, SUPRA AND ALSO RAJEEV SHARMA, SUPRA, WE ARE OF THE VIEW THAT THE AO IS BOUND TO SERVE ON THE ASSES SEE A NOTICE U/S. 143(2) OF THE ACT, WHICH HE NEVER DID IN THIS CASE. SIMILARLY , LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF HON'BLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CEBON INDIA LTD. (2012) 347 ITR 583 (P&H), WHEREIN HON'BLE HIGH COURT HAS NOTED THE FACTS THAT CIT(A) FOUND THAT THERE IS NO EVIDENCE TO SHOW THAT NOTICE U/S. 143(2) OF THE ACT HAS BEEN SERVED ON THE ASSESSEE BEFORE NOVEMBER 30, 1997, I.E. WITHIN ONE YEAR FROM THE DATE OF FILING OF RETURN OF INCOME AND THEREFORE, HON'BLE H IGH COURT HELD AS UNDER: ITA NO. 462/KOL/2011 A.Y. 2001 -02 DR. ANISUR RAHAMAN VS. ITO WD-55(2) KOL. PAGE 4 'WE FIND THAT CONCURRENT FINDING HAS BEEN RECORDED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AS WELL AS THE TRIBUNAL ON THE QUESTION OF DATE OF SERVICE OF NOTICE. NOTICE WAS N OT SERVED WITHIN THE STIPULATED TIME. MERE GIVING OF DISPATCH NUMBER WIL L NOT RENDER THE SAID FINDING TO BE PERVERSE. IN THE ABSENCE OF NOTICE BE ING SERVED, THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE ASSES SMENT. ABSENCE OF NOTICE CANNOT BE HELD TO BE CURABLE UNDER SECTION 2 92BB OF THE ACT.' WE ALSO FIND THAT THE SERVICE OF THE NOTICE UNDER S ECTION 143(2) OF THE ACT IS MANDATORY AND FOR THIS DEFECT THE AO CANNOT EVEN TA KE THE RESORT TO THE PROVISIONS OF SECTION 292BB OF THE ACT. FROM THE BA RE PERUSAL OF SECTION 292BB WE FIND THAT A DEEMING FICTION HAS BEEN CREAT ED BY THIS SECTION. IN CASE, AN ASSESSEE CO-OPERATES DURING THE ASSESSMENT EVEN IF NO NOTICE HAS BEEN SERVED ON HIM, IT IS DEEMED TO BE SERVED UPON HIM IN TIME AS PER THE PROVISIONS OF THE ACT. THE PROVISIONS OF THIS SECTI ON CLEARLY LAID DOWN THE CIRCUMSTANCES UNDER WHICH THE DEEMING FICTION HAS T O COME INTO FORCE. THESE CONDITIONS HAVE BEEN STATED TO BE AS (A), (B) AND ( C), WHICH TALKS ABOUT THE SITUATION WHERE THE NOTICE WAS NOT SERVED UPON THE ASSESSEE OR NOT SERVED UPON HIM IN TIME OR SERVED UPON HIM IN AN IMPROPER MANNER RESPECTIVELY. THEREFORE, SECTION TALKS ABOUT ONLY THE SITUATION W HERE THE ASSESSEE RAISES THE ISSUE OF NON-SERVICE OF A NOTICE AND STILL CO-O PERATES WITH THE DEPARTMENT. OTHERWISE ALSO, THE REQUIREMENT FOR THE ISSUANCE OF STATUTORY NOTICE CANNOT BE DISPENSED WITH BY THE CO-OPERATION OF THE ASSESSEE. SINCE THIS NOTICE FORMS THE BASIS FOR ASSESSING OFFICER TO ASSUME JURISDICT ION UNDER RESPECTIVE SECTIONS. IN THIS CONNECTION WE ARE PLACING RELIANC E ON THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. CEBON INDIA LTD. [2012] 347 ITR 583/[2009] 184 TAXMAN 290 WHEREBY IT HAS BEEN VERY CATEGORICALLY HELD THAT ABSENCE OF A STATUTORY NOTI CE CANNOT BE HELD TO BE CURABLE UNDER SECTION 292BB OF THE ACT. THE RELEVAN T EXTRACT OF THE JUDGMENT IS REPRODUCED BELOW:- ASSESSMENTVALIDITYABSENCE OF NOTICE UNDER S. 143( 2)CONCURRENT FINDING HAS BEEN RECORDED BY THE CIT(A) AS WELL AS THE TRIBUNAL THAT THE NOTICE UNDER S. 143(2) WAS NOT SERVED WITHIN THE STIPULATE D TIMEMERE GIVING OF DISPATCH NUMBER WILL NOT RENDER THE SAID FINDING TO BE PERVERSEIN THE ABSENCE OF SERVICE OF NOTICE THE AO HAD NO JURISDIC TION TO MAKE ASSESSMENT ITA NO. 462/KOL/2011 A.Y. 2001 -02 DR. ANISUR RAHAMAN VS. ITO WD-55(2) KOL. PAGE 5 ABSENCE OF NOTICE CANNOT BE HELD TO BE CURABLE UNDE R S. 292BB CEBON INDIA LTD. VS. ADDL. CIT (2008) 12 DTR (DEL)(TRIB) 402 AFFIRMED CIT(A) AS WELL AS THE TRIBUNAL HAVING RECORDED CONC URRENT FINDING THAT THE NOTICE UNDER S. 143(2) WAS NOT SERVED ON THE ASSESS EE WITHIN THE STIPULATED TIME, IMPUGNED ASSESSMENT WAS NOT VALID; ABSENCE OF NOTICE IS NOT A CURABLE DEFECT UNDER S. 292BB. ONCE NOTICE U/S. 143(2) OF THE ACT IS NOT ISSUED, A SSESSMENT FRAMED BY THE AO AND CONFIRMED BY THE CIT(A) IS VOID-AD-INITIO. T HEREFORE WE REVERSE THE SAME. AS THE AO ORDER IS NOT MAINTAINABLE AS PER TH E PROVISIONS OF THE ACT ON TECHNICAL GROUNDS I.E. NON-ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THEREFORE WE ARE NOT INCLINED TO ADJUDICATE THE APP EAL ON MERITS. ACCORDINGLY THE APPEAL OF ASSESSEE IS ALLOWED. 7. SINCE WE HAVE QUASHED INITIATION OF PROCEEDINGS AND ISSUANCE OF NOTICE U/S 147/148 OF THE ACT BY ALLOWING LEGAL GROUND OF ASSESSEE THEN OTHER GROUNDS OF THE ASSESSEE ON MERITS BECOMES ACADEMIC AND INFRUCTUOUS AND WE DISMISS THE SAME AS HAVING BECOME INFRUCTUOUS. 8. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 09/ 12/2016 SD/- SD/- ( !') ( !') (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S $!% &- 09 / 12 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DR ANISUR RAHAMAN, 175, PARK STREET, KOL KATA-700 017 2. /RESPONDENT-ITO WARD,55(2), 54/1 RAFI AHMED KIDWAI ROAD, KOLKATA-17 3. %.%/0 1 1 2 / CONCERNED CIT KOLKATA 4. 1 1 2- / CIT (A) KOLKATA 5. 567 /0, 1 /0 , / DR, ITAT, KOLKATA 6. 7:; <= / GUARD FILE. BY ORDER/ 1! , /TRUE COPY/ / % 1 /0 ,