DCIT CEN CIR 7(3), MUMBAI V. SAURABH NAVAL KISHOR GARG, MUMBAI

ITA 4728/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0396 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 20-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH L PATEDE
• Keywords: Question of law; Validity of assessment; Accommodation entries; Assessment record; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI , , BEFORE HONBLE S/SHRI SANJAY GARG, JM AND SHRI RAJESH KUMAR , AM ./ I.T.A. NO. 4086 /MUM/201 5 ( / ASSESSMENT YEAR S : 20 08 - 09 ) SAURABH NAVAL KISHOR GARG, PROP. M/S SANGAM EXPORTS, OFFICE NO.3, GROUND FLOOR, SHREEJI ARCADE, TATA ROAD NO.2, OPERA HOUSE, MUMBAI - 400004 / VS. DY. C OMMISSIONER OF INCOME TAX CC - 42(NOW DCIT, CC 7(3),ROOM NO.655 6TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO. 4728/MUM/2015 ( / ASSESSMENT YEAR : 20 08 - 09 ) DY.COMMISSIONER OF INCOME TAX - CC 7(3),ROOM NO.655 6TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / VS. SAURABH NAVAL KISHOR GARG, PROP. M/S SANGAM EXPORTS ./ PAN : ALNGP6600J ( / APPELLANT ) .. ( / RE SPONDENT ) / A SSESSEE BY : SHRI DHARMESH SHAH / RE VENUE BY : SHRI PRAKASH L PATEDE / DATE OF HEARING : 8 .6.2017 / DATE OF PRONOUNCEMENT : 16. 6.201 7 ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 2 / O R D E R PER RAJESH KUMAR , AM : THE CAPTIONED ARE CROSS - APPEAL S BY THE ASSESSEE AND REVENUE PERTAINING TO ASSESSMENT YEAR 2008 - 09. THE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE CIT(A) - 40, MUMBAI , DATED 10.04.2015 WHICH IN TURN HAS ARISE N FROM AN ORDER PASSED BY THE ASSESSING OFFICER DATED 2 8.03. 20 1 3 UNDER SECTION 143(3) R.W.S.147 OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). 2. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER : GROUNDS OF APPE3AL AGAINST THE ORDER DATED 10.4.2015 U/S 250 OF THE ACT PASSED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 49, MUMBAI. L. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE RE - OPENING OF THE ASSESSMENT BY THE ASSESS ING OFFICER WAS INVALID AND BAD IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE REASONS RECORDED BY THE ASSESSING OFFICER WERE INVALID AND IT DID NOT CONFER VALID JURISDICTION WITH T HE ASSESSING OFFICER. HENCE THE ASSESSMENT IS INVALID AND BAD IN LAW. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ASSESSING OFFICER HAS FAILED TO ISSUE NOTICE IN ACCORDANCE WITH THE PROV ISIONS OF S. 143(2) OF THE ACT. HENCE THE ASSESSMENT ORDER PASSED IS INVALID AB INITIO. 4. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION OF RS. 3,76,454/ - ON ALLEGED COMMISSION ON IMPORT PURCHASE S. 5. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ADDITION ON ACCOUNT OF COMMISSION ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 3 TO THE TUNE OF 0.075% ON SALES BILLS EXCLUDING SALES MADE TO SISTER CONCERNS. 6. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF ISSUING ACCOMMODATION BILLS MERELY ON THE BASIS OF STATE MENT RECORDED DURING POST SURVEY PROCEEDING OF THE APPELLANT. 7. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LA W AND IN FACTS IN CONFIRMING THE ASSESSMENT OF INTEREST INCOME OF RS. 8,90,129/ - . 8. WITHOUT PREJUDICE TO GROUND NO. 6, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN NOT ASSESSING COMMISSION INCOME ON L OAN ENTRIES INSTEAD OF ASSESSMENT OF ENTIRE INTERE ST INCOME OF RS. 8,90,129/ - . 9. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND IN FACT IN CONFIRMING HE DISALLOWANCE OF EXPENSES CLAIMED BY THE APPELLANT IN ITS RETURN OF INCOME 3 . THE GROUND OF APPEAL TAKEN BY REVENUE IS AS UNDER: ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CA S E AND IN THE LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.66,92,384/ - FOR PROVIDING ACCOMMODATION ENTRIES OF DOMESTIC PURCHASE WITHOUT APPRE CIATING T HE F A CT TH A T DURING THE COUR S E OF THE SEARCH, THE ASSESSEE HAD STATED THAT THERE WAS NO REAL SALE AND PURCHASE TRANSITION AND HE WAS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES OF S A LES AND PURCHASES: I.T.A. NO.4086/MUM/2015 4 . WE WOULD LIKE TO MENTIONED THAT T HE AS S ES S EE HAS CHALLENGE D T HE VALIDITY OF THE ASSESSMENT ON THE GROUND THAT THE AO HAS NOT ISSUED NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT AND HAS CHALLENGED ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 4 THE VERY BASIS OF FRAMING THE ASSESSMENT. WE WOULD LIKE TO DEAL WITH AND DISPOSE OF THIS GROUND OF APPEAL FIRST OF ALL . 5 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.9.2008 DECLARING A TOTAL INCOME OF RS.3,84,880/ - . THEREAFTER, T HE ASSE SS ME N T WAS REOPENED UNDER SECTIO N 148 OF THE INCOME TAX ACT VIDE NOTICE DATED 30.3.2012. THEREAFTER, NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE ON 19.6.2012. THE ASSESSEE REPLIED THAT THE SAID NOTICE VIDE LETTER DATED 28.1.2013 SUBMITTING THEREIN THAT RETU RN FILED ORIGINALLY U/S 139(1) OF THE ACT ON 30.9.2008 MAY PLEASE BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT . THE CONTENTION RAISED BY THE ASSESSEE IN THE TECHNICAL GROUND CHALLENGING THE VALIDITY OF ASSESSMENT I S THAT THE NOTICE ISSUED U/S 143(2) OF THE ACT WAS ISSUED ON 19.6.2012 PRIOR TO THE COMPLIANCE OF THE NOTICE U/S 148 OF THE ACT VIDE LETTER DATED 28.1.2013 REQUESTING THE AO THAT THE RETURN DATED 30.9.2008 FILED U/S 139(1) BE TREATED AS RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. ACCORDING TO THE ASSESSEE NO NOTICE U/S 143(2) WAS ISSUED AFTER 28.01.2013 WHEN THE ASSESSEE REPLIED TO THE NOTICE U/S 148 OF THE ACT AND THUS THERE WA S NO JURIS DICTION TO FRAME THE ASSESSMENT . THE LD. AR PLACED BEFORE US A COPY OF ORDER SHEET OBTAINED FROM THE DCIT CIRCLE WHICH WAS SUPPLIED VIDE LETTER DATED 5.5.2017 TO THE ASSESSEE WHICH IS EXTRACTED BELOW : ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 5 ASSESSMENT YEAR 2008 - 09 M/S SANGAM EXPORTS 27.3.2012 THE NOTICE UNDER SECTION 148 OF T HE IT ACT WAS ISSUED AND SERVED UPON THE ASSESSEE AFTER DULY RECORDING THE REASONS FOR ISSUE OF NOTICE AND ESCAPEMENT OF INCOME; 19.6.2012 NOTICE UNDER SECTION 142(1) AND 143(2) ISSUED AND SERVED UPON THE ASSESSEE ALONG WITH Q FIXING HEARING ON 12.7.20 12 NONE ATTENDED 18.1.2013 SINCE THERE WAS NO COMPLIANCE HENCE LETTER DATED 18.1.2013 ISSUED AND SERVED UPON THE ASSESSEE FIXING HEARING ON 23.1.2013 28.1.2013 SHRI SAURABH GARG ATTENDED AND FILED LETTER DATE 28.1.203 STATING THAT RETURN FILED UNDER SECTION 139(1) ON 30.9.2008 MAY BE T R EA T ED AS FILED IN RESPONSE TO NOTICE ISSUED U/S 148. HE REQUSTED FOR ADJOURNMENT F OR A PERIOD OF 15 DAYS ACCORDINGLY ADJOURNMENT TO 8 TH FEB 2013. 6.3.2013 SHRI SAURAB GARG ATTENDED AND FILE SOME OF THE DETAILS ONL Y. HE IS REQUESTED TO FILE THE BALANCE COMPLETE DETAILS. ADJOURNED TO 11.3.2013. 28.3.2013 SHRI SAURABH GARG ATTENDED AND PRODUCED DETAILS OF SALES, PURCH AS ES A ND LOAN ADVANCES TO THE PARTIES WITH CONFIRMATION OF ACCOUNT . THE A S SES S EE WAS ASKED WHY INCOME RECEIVED AS COMMISSION ON IMPORTS, SALES , WITH PURCHASE BILL ISSUES SHOULD NOT BE ADDED TO YOUR INCOME AS THE SAME HAVE NOT BEEN OFFERED TO TAX. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN WHY INTEREST INCOME ON LOANS ADVANCED AND INTER ES T NOT CHARGED O N LOAN GIVEN SHOULD NOT BE CHARGED TO TAX ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 6 6 . ADMITTEDLY THE ORDER SHEET ENTRIES SHOW THAT NO NOTICE WAS ISSUED AFTER 28.1.2013 THE DATE ON WHICH THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE RETURN FILED U/S 139(1) ON 30.9.2008 BE TREATED AS THE RESPO NSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. 7 . THE LD. AR VEHEMENTLY SUBMITTED BEFORE US THAT THE ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S.147 DATED 28.3.2013 WAS WITHOUT ANY JURISDICTION AS NO NOTICE HAS BEEN ISSUED POST COMPLIANCE TO NOT ICE U/S 148 OF THE ACT WHICH WAS MADE ON 28.1.2013 SUBMITTING THEREIN THAT THE RETURN FILED U/S 139(1) OF THE ACT ON 30.9.2008 MAY BE TREATED AS IN REPLY TO THE NOTICE ISSUE DU/S 148. THE LD. AR SUBMITTED THAT THE AO HAS ISSUED SHOW CAUSE NOTICE ON 12. 7.2012 WHICH WAS DULY RECORDED IN THE ORDERSHEET ON 19.7.2012. THE LD. AR VEHEMENTLY SUBMITTED THAT ISSUANCE OF NOTICE U/S 143(2) IS MANDATORY AFTER THE 28.01.2013 A FTER THE ASSESSEE HAS COMPLIED WITH THE NOTICE ISSUE U/S 148. IN THIS CASE, NOTICE U/S 1 48 DATED 27.03.2012 WHEREAS COMPLIANCE TO THE NOTICE WAS MADE ON 28.1.2013. THE LD COUNSEL OF THE ASSESSEE CONTENDED THAT IN ORDER TO ASSUME JURISDICTION TO PROCEED FURTHER IN THE ASSESSMENT PROCEEDINGS U/S 148 OF THE ACT, THE ISSU ANCE OF NOTICE U/S 14 3(2) OF THE ACT AFTER 28.1.2013 WAS MANDATORY, WHICH WAS DONE BY THE AO AND THEREFORE THE ASSESSMENT PASSED UNDER SE CTION 143(3) R.W.S.147 WAS WITHOUT ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 7 JURISDICTION , INVALID AND VOID ABINTIO AND SHOULD BE QUASHED. IN DEFENSE OF HIS ARGUMENT THE LD. AR PLACED RELIANCE ON THE FOLLOWING CASE LAW: I) CWT V. HUF OF H.H. LATE J .M. SCINDIA [300 ITR 193] ; II) PR. CIT V/S SILVER LINE [383 ITR 455] ; III) PR. CIT V/S SHRI JAL SHIV SHANKAR TRADERS PVT. LTD [383 ITR 448] ; IV) G N MOHAN RAJU V. [167 TTJ 236] ; V) G ANESH CONSTRUCTION CO V. IT O [ITA NO.1179/MUM/2015] ; 18.08.2016 FOR A.Y. 2009 - 10. VI) CBDT CIRCULAR NO.286/98/2013 - IT (INV. 11), DATED 18.12. 2014 VII) CBDT CIRCULAR NO.286/2/2003 - IT (INV. 11), DATED 10.03. 2003; VIII) CIT V/ S S. KHADER KHAN SON [214 CTR 589] ; IX) CIT V/S KHADER KHAN SON [254 CTR 228] ; X) PAUL MATHEWS AND SONS V. CIT [263 ITR 101] ; XI) MARUTI MILLS (P) LTD V. UNION OF INDIA AND ORS [250 ITR 3 48]; XII) GHERU LAL BAL CHAND V. IT O [137 ITR 190]. X III) TDI MARKETINQ (P) LTD V. ACIT [28 SOT 215]. XIV) SUNSHINE IMPORT AND EXPORT P LTD V/S DCIT IN ITA NO.4347/MUM/2015 (AY - 2008 - 09) DATED 9.9.2016 THE LD. AR FIN ALLY PRAYED BEFORE THE BENCH THAT THE ASSESSMENT PROCEEDINGS, WHICH CULMINATED INTO PASSING OF THE ASSESSMENT ORDER U/S 143(3) READ WITH SECTION 147 OF THE ACT WAS WITHOUT JURISDICTION AND THEREFORE SHOULD BE QUASHED AS NO NOTICE U/S 143(2) WAS ISSUED POST COMPLIANCE OF NOTICE UNDER SECTION 148 BY THE AO IN VIEW OF THE R ATIO LAID DOWN IN THE FOREGOING DECISIONS REFERRED TO AND RELIED UPON BY THE LD.AR. 8 . THE LD. DR VEHEMENTLY OPPOSING HE ARGUMENT ADVANCED BY THE LD.AR SUBMITTED THAT THE ASSESSEE CANNOT BE ALLOWED TO RAISE OBJECTION QUA THE ISSUE OF NOTICE U/S 143(2) O F THE ACT AFTER COMPLETION OF THE ASSESSMENT AS THE ASSESSEE HAS PARTICIPATED IN T HE ASSESSMENT PROCEEDING S FROM TIME TO TI ME AND RAISED NO OBJECTION QUA THE NON ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 8 ISSUANCE OF NOTICE U/S 143(2) POST COMPLIANCE OF NOTICE ISSUED U/S 148 OF THE ACT TO THE ASSE SSEE AND THEREFORE THE CASE OF THE ASSESSEE WAS CLEARLY COVER ED BY THE PROVISIONS OF SECTION 292BB OF THE ACT WHICH CLEARLY STATE D THAT W HERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR COOPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT , IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE WOULD BE PRECLUDED FROM TAKING ANY OBJECTIO N IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS ( A ) NOT SERVED UPON HIM; OR ( B ) NOT SERVED UPON HIM IN TIME; OR ( C ) SERVED UPON HIM IN AN IMPROPER MANNER: BUT THE PROVISO TO THE SAID SECTION FUR THER PROVIDE D THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT . IN THE PRESENT CASE, THE LD. AR HAS NOT RAISED ANY OBJECTION DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND HAS DULY CO - OPERATED AND ATTENDED THE PROCEEDINGS AND THUS HE COULD NOT BE ALLOWED TO TAKE OBJECTION OF NO N ISSU ANCE OF NOTICE U/S 143(2) OF THE ACT AFTER COMPLETION OF THE ASSESSMENT. THE LD. DR ALSO SUBMITTED THAT THE NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 27.3.2012 WHEREAS T HE ASSESSEE HAS NOT MADE ANY ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 9 COMPLIANCE TILL 28.1.2013 WHEN THE ASSESSEE FILED A LETTER OF EVEN DATE STAT ING THEREIN THAT THE RETURN FILED U/S 139(1) ON 30.9.2008 MAY BE TREATED AS RETURN FILED IN RESPON SE TO THE NOTICE ISSUED U/S 148 OF THE ACT . ON THE CONTRARY, THE LD. D R FURTHER SUBMITTED THAT THE NOTICE ISSUED U/S 143(2) OF THE ACT WAS ISSUED BY THE AO ON 19.6.2012 POST ISSUING NOTICE U/S 148 ON 27.3.2012. THE ASSESSEE HAS NOT FILE D ANY RET U RN OF INCOME WITHIN THE 30 DAYS FROM THE ISSUANCE OF NOTICE U/S 148 AND THE AO HAS ISSUED NOTICES UNDER SECTION 143(2) O N 19.6.2012 AND THEREBY CORRECTLY ASSUMED THE JURISDICTION AND FRAMED THE ASSES SMENT. FURTHER, THE LD. DR SUBMITTED THAT THE ASSESSEE FIL ED A LETTER DATED 28.1.2013 AND NOT RETURN OF INCOME WHEREAS THE AO DULY RECORDED THE SATISFACTION AFTER EXAMINING THE RETURN AS ORIGINALLY FILED BY THE ASSESSEE BEFORE INITIATING THE PROCEEDINGS AND NOTICE WAS DULY ISSUED U/S 143(2) OF THE ACT ON 19.6.20 12 . THE LD DR CONTENDED THAT THE AO HAS VALIDLY ASSUMED THE JURISDICTION BY ISSUING THE SAID NOTICE AND THE ASSESSEE SHOULD NOT BE ALLOWED TO RAISE THIS TECHNICAL AND LEGAL ISSUE AT THIS STAGE. 9 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED HE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDERS AND CASE S RELIED UPON BY THE PARTIES. ADMITTEDLY IN THE PRESENT CASE, THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 27.3.2012 AN D NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 12.7.2012 . THE ASS ESSEE COMPLIED WITH THE NOTICE ISSUED U/S 148 ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 10 OF THE ACT DATED 28.1.2013 WHEREIN THE ASSESSEE SUBMITTED THAT THE RETURN ORIGINALLY FILED U/S 139(1) OF THE ACT ON 30.9.2008 SHOULD BE TREA T ED AS RETURN FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 1 48 OF THE ACT . NOW, THE ISSUE BEFORE US IS WHETHER NOTICE U/S 143(2) WAS TO BE MANDATORILY TO BE ISSUED POST 28.1.2013 OR THE NOTICE ISSUED ON 12.7.2012 WOULD BE SUFFICE TO ASSUME JURISDICTION TO FRAME THE ASSESSMENT. WE FIND MERITS IN THE CONTENTIONS OF THE LD COUNSEL OF ASSESSEE THAT THE NOTICE U/S 143(2) OF THE ACT HAS TO BE ISSUED AFTER 28.01.2013 IN ORDER TO ASSUME JURISDICTION TO FRAME THE ASSESSMENT. IN THE CASE OF PR. CIT V/S SHRI JAL SHIV SHANKAR TRADERS PVT. LTD (SUPRA) , THE HONBLE HIGH COURT HAS HELD THAT THE ISSUE OF NOTICE U/S 143(2) OF THE ACT PRIOR TO FINALIZATION OF RE - ASSESSMENT ORDER CANNOT BE CONDONED BY INVOKING THE PROVISIONS OF SECTION 292BB OF THE ACT. THE HONBLE HIGH COURT HAS FURTHER HELD AS UNDER : 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 EFFECTED ON THE ASSESSEE UNDER SECTION 143 (2) OF THE ACT. AS ALREADY FURTHER NOTICED, THE LEGAL POSITION REGARDING SECTION 292BB HAS ALREADY BEEN MADE EXPLICIT IN THE AFOREMENTIONED DECISIONS OF THE ALLAHABAD HIGH COURT. THAT PROVISION WOULD APPLY INSOFAR AS FAILURE OF 'SERVICE' OF NOTICE WAS CONCERNED AND NOT WITH REGARD TO FAILU RE TO 'ISSUE' NOTICE. IN OTHER WORDS, THE FAILURE OF THE AO, IN RE - ASSESSMENT PROCEEDINGS, TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT, PRIOR TO FINALISING THE RE - ASSESSMENT ORDER, CANNOT BE CONDONED BY REFERRING TO SECTION 292BB OF THE ACT. 19. THE RE SULTANT POSITION IS THAT AS FAR AS THE PRESENT 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 ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 11 WHEN THE ASSESSEE MADE A STATEMENT BEFORE THE AO TO THE EFFECT THAT TH E ORIGINAL RETURN FILED SHOULD BE TREATED AS A RETURN PURSUANT TO A NOTICE UNDER SECTION 148 OF THE ACT, IS FATAL TO THE ORDER OF RE - ASSESSMENT. 20. CONSEQUENTLY, THERE IS NO LEGAL INFIRMITY IN THE IMPUGNED ORDER OF THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEAL IS DISMISSED. IN THE CASE OF G N MOHAN RAJU (SUPRA) THE , THE COORDINATE BENCH OF THE TRIBUNAL HELD AS UNDER : 8. A LOOK AT S. 143(2) IS CALLED FOR AT THIS JUNCTURE. IT IS REPRODUCED HEREUNDER : '143(2) WHERE A RETURN HAS BEEN F URNISHED UNDER S. 139, OR IN RESPONSE TO A NOTICE UNDER SUB - S. (1) OF S. 142, THE AO SHALL (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE, SERVE ON THE ASSESSEE A NOTICE SPECIFYING PARTICULARS OF SUCH CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO BE SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE OR PARTICULARS SPECIFIED THEREIN OR ON WHICH THE ASSESSEE MA Y RELY, IN SUPPORT OF SUCH CLAIM : PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1ST JUNE, 2003. (II) NOTWITHSTANDING ANYTHING CONTAINED IN CL. (1), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER - PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFFICER OR TO PRODUCE, OR CAU SE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN : PROVIDED THAT NO NOTICE UNDER CL. (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 12 END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FU RNISHED.' ONCE THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS SUBJECT TO PROCESSING UNDER S. 143(1) OF THE ACT, THE PROCEDURE OF ASSESSMENT PURSUANT TO SUCH A RETURN, IN OUR OPINION, CAME TO AN END, SINCE AO DID NOT ISSUE ANY NOTICE WITHIN THE 6 MONTHS PER IOD MENTIONED IN PROVISO TO S. 143(2)(II). NO DOUBT, IF THE INCOME HAS BEEN UNDERSTATED OR THE INCOME HAS ESCAPED ASSESSMENT, AN AO IS HAVING THE POWER TO ISSUE NOTICE UNDER S. 148 OF THE IT ACT. NOTICE UNDER S. 148 OF THE ACT, ISSUED TO THE ASSESSEE REQUI RED IT TO FILE A RETURN WITHIN 30 DAYS FROM THE DATE OF SERVICE OF SUCH NOTICE. THERE IS NO PROVISION IN THE ACT, WHICH WOULD ALLOW AN AO TO TREAT THE RETURN WHICH WAS ALREADY SUBJECT TO A PROCESSING UNDER S. 143(1) OF THE IT ACT, AS A RETURN FILED PURSUAN T TO A NOTICE SUBSEQUENTLY ISSUED UNDER S. 148 OF THE ACT. HOWEVER, ONCE AN ASSESSEE ITSELF DECLARED BEFORE THE AO THAT HIS EARLIER RETURN COULD BE TREATED AS FILED PURSUANT TO NOTICE UNDER S. 148 OF THE IT ACT, THREE RESULTS CAN FOLLOW. AO CAN EITHER SAY NO, THIS WILL NOT BE ACCEPTED, YOU HAVE TO FILE A FRESH RETURN OR HE CAN SAY THAT 30 DAYS TIME PERIOD BEING OVER, I WILL NOT TAKE COGNIZANCE OF YOUR REQUEST OR HE HAS TO ACCEPT THE REQUEST OF THE ASSESSEE AND TREAT THE EARLIER RETURNS AS ONE FILED PURSUANT TO THE NOTICE UNDER S. 148 OF THE IT ACT. IN THE FORMER TWO SCENARIOS, AO HAS TO FOLLOW THE PROCEDURE SET OUT FOR A BEST OF JUDGMENT ASSESSMENT AND CANNOT MAKE AN ASSESSMENT UNDER S. 143(3). ON THE OTHER HAND, IF THE AO CHOSE TO ACCEPT ASSESSEE'S REQUEST, HE CAN INDEED MAKE AN ASSESSMENT UNDER S. 143(3). IN THE CASE BEFORE US, ASSESSMENTS WERE COMPLETED UNDER S. 143(3) R/W S. 147. OR IN OTHER WORDS, AO ACCEPTED THE REQUEST OF THE ASSESSEE. THIS IN TURN MAKES IT OBLIGATORY TO ISSUE NOTICE UNDER S. 143(2) AF TER THE REQUEST BY THE ASSESSEE TO TREAT HIS EARLIER RETURN AS FILED IN PURSUANCE TO NOTICES UNDER S. 148 OF THE IT ACT WAS RECEIVED. THIS REQUEST, IN THE GIVEN CASE, HAS BEEN MADE ONLY ON 5TH OCT., 2010. ANY ISSUE OF NOTICE PRIOR TO THAT DATE CANNOT BE TR EATED AS A NOTICE ON A RETURN FILED BY THE ASSESSEE PURSUANT TO A NOTICE UNDER S. 148 OF THE ACT. OR IN OTHER WORDS, THERE WAS NO VALID ISSUE OF NOTICE UNDER S. 143(2) OF THE IT ACT, AND THE ASSESSMENTS WERE DONE WITHOUT FOLLOWING THE MANDATORY REQUIREMENT UNDER S. 143(2) OF THE IT ACT. THIS, IN OUR OPINION, RENDERED THE SUBSEQUENT PROCEEDINGS ALL INVALID. LEARNED CIT(A) HAD ONLY ADJUDICATED ON A POSITION WHERE THERE WAS NO SERVICE OF NOTICES UNDER S. 143(2) OF THE IT ACT. HE HAD NOT DEALT WITH THE SCENARIO , WHERE NOTICE WAS ISSUED PRIOR TO THE FILING OF RETURN BY THE ASSESSEE. WE THEREFORE, QUASH THE ASSESSMENTS DONE FOR THE ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 13 IMPUGNED ASSESSMENT YEARS. SINCE THE APPEALS OF THE ASSESSEE ARE ALLOWED ON ITS GROUND 3, OTHER GROUNDS ARE NOT ADJUDICATED. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. IN THE CASE OF M/S. GANESH CONSTRUCTION CO.,(SUPRA) THE CO - ORDINATE BENCH OF THETRIBUNAL HELD AS UNDER : 5. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. ADMIT TED FACTS ARE THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT BY THE AO. THE LEARNED SR. DR BEFORE ME PRODUCED THE ASSESSMENT RECORDS FROM WHERE IT IS GATHERED THAT NO NOTICE U/S 143(2) OF THE ACT WAS EVER ISSUED BY THE AO FOR FRAMING OF ASSESSMENT AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT. AS EXPLAINED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND THE LETTER FILED BEFORE THE AO, WHICH IS ENCLOSED IN THE ASSESSEE'S PAPER BOOK AT PAGE 22, WHICH CLEARLY REVEALS THAT THE ASSESSEE HAS FILED RETURN OF INCOME ORIGINALLY AS E - RETURN FOR THE ASSESSMENT YEAR 2009 - 10 AND COPY OF THE SAME WAS ENCLOSED WITH THIS LETTER. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO MADE A STATEMENT AT THE BAR THAT HE HAS INFORMED THE AO TO TREAT T HE E - RETURN FILED BY THE ASSESSEE AS RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. IN VIEW OF THIS FACT, NOW, I AM TURNING TO THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASE OF SHRI JAI SHIV SHANKAR TRADERS PVT. L TD. WHEREIN THE HON'BLE DELHI HIGH COURT RELYING ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS HOTEL BLUE MOON [2010] 321 ITR 362 (SC) HAS HELD THAT IF NOTICE U/S 143(2) WAS NOT ISSUED TO THE ASSESSEE BEFORE COMPLETION OF ASSESSMENT O R REASSESSMENT, THEN SUCH REASSESSMENT WAS NOT SUSTAINABLE IN LAW. THE RELEVANT OBSERVATION OF THE HON'BLE SUPREME COURT READS AS UNDER: - 'THE ASSESSEE'S FURTHER APPEAL HAS BEEN ALLOWED BY THE INCOME - TAX APPELLATE TRIBUNAL BY THE IMPUGNED ORDER. RELYING IN TER ALIA, ON THE DECISION OF T HE SUPREME COURT IN ASS. CIT V. HOTEL BLUE MOON [2010] 321 ITR 362 (SC) AND A PLETHORA OF JUDGMENTS OF THE HIGH COURTS, THE INCOME - TAX APPELLATE TRIBUNAL CONCLUDED THAT FOR COMPLETING THE ASSESSMENT UNDER SECTION 148 OF THE ACT, COMPLIANCE WITH THE PROCEDURE UNDER SECTION 143(2) WAS MANDATORY. IT WAS HELD THAT IF NOTICE WAS NOT ISSUED TO THE ASSESSEE BEFORE COMPLETION OF THE REASSESSMENT, THEN SUCH REASSESSMENT WAS NOT SUSTA INABLE IN LAW'. ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 14 IT IS ARGUED BY THE LEARNED SR. DR THAT THAT THIS ISSUE OF NON - ISSUANCE OF NOTICE U/S 143(2) OF THE ACT IS CURABLE AND CAN BE CURED BY THE PROVISIONS OF SECTION 292BB OF THE ACT. I HAVE G ONE THROUGH THE PROVISIONS OF SECTION 292BB OF THE ACT AND NOTICED THAT THESE PROVISIONS WILL NOT APPLY WHERE NOTICE HAS NOT AT ALL BEEN ISSUED BUT WILL APPLY ONLY IN THE CASES WHERE NOTICE ISSUED BUT NO T SERVED UPON THE ASSESSEE, NOT SERVED UPON HIM IN TIME AND SERVED UPON THE ASSESSEE IN AN IMPROPER MANNER. HERE, IN THE PRESENT CASE, NONE OF THE CONDITIONS AS PRESCRIBED U/S 292BB OF THE ACT IS PREVAILING AND HENCE, THE PROVISIONS WILL NOT APPLY. THE PRE SENT CASE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS HOTEL BLUE MOON (2010) 321 ITR 362 (SC). IN THE GIVEN FACTS AND CIRCUMSTANCES AND THE PRECEDENTS AS DISCUSSED ABOVE, I AM OF THE VIEW THAT ONCE THE NOTICE U/S 143(2) OF THE ACT IS NOT ISSUED AT ALL BY THE REVENUE FOR COMPLETING THE REASSESSMENT PROCEEDINGS BY ISSUING NOTICE U/S 148 OF THE ACT, THE ITA NO.1179/MUM/2015 SAME IS INVALID AND CANNOT BE CURED BY THE PROVISIONS OF SECTION 292BB OF THE ACT. ACCORDINGLY, I QUASH THE REASSESSMENT AND ALLOW THE APPEAL OF THE ASSESSEE. 6. AS REGARDS TO THE OTHER ISSUES ON JURISDICTION AS WELL AS ON MERITS, I NEED NOT TO GO INTO THE SAME BECAUSE REASSESSMENT PROCEEDINGS IS QUASHED ON JURISDICTIONAL ISSUE OF NON - ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE FACTS OF THE ASSESSEES CASE ARE SQUARELY COVED BY THE RATIO LAID DOWN IN THE AFORESAID DECISIONS AND WE THEREFO RE FOLLOWING THE RATIO LAID DOWN HEREINABOVE HOLD THAT THE NON - ISSUANCE OF NOTICE U/S 143(2) OF THE ACT ON ON OR AFTER 28.1.2013 WHEN THE ASSESSEE INFORMED THE AO THAT THE RETURN FILED BY THE ASSESSEE U/S 139(1) MAY BE TREATED AS RETURN FILED IN RESPON SE TO THE NOTICE U/S 148 OF THE ACT IS F ATAL TO THE ORDER OF RE - ASSESSMENT SO FRAMED AND ACCORDINGLY, QUASHED. THE APPEAL OF THE ASSESSEE IS ALLOWED ON THIS TECHNICAL AND LEGAL GROUND. ITA NO. 4086 / MUM/20 1 5 AND 4728/MUM/2015 15 10. WE HAVE ALREADY ALLOWED THE APPEAL OF THE ASSESSEE ON TECHNICAL AND LEGAL GROUND AND THEREFORE THE OTHER GROUNDS RAISED BY THE ASSESSEE NEED NOT BE ADJUDICATED. I.T.A. NO.4728/MUM/2015 4. 11 . SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON TECHNICAL GROUND, THE APPEAL BY THE REVENUE IS RENDERED INFRUCTUOUS A ND ACCORDINGLY DISMISSE D. 12. IN THE RESULT, THE APPEAL OF TH E ASSESSEE IS ALLOWED AND THAT OF REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 16TH JUNE, 2017 . 16TH JUNE, 2017 SD SD ( / SANJAY GARG) ( / RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 16 /06/ 201 7 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI