MELISMA FINANCE & TRADING P. LTD, MUMBAI V. DCIT CTRL. CIR -34, MUMBAI

ITA 5399/MUM/2009

• Counselvise Citation: 539919914 RSA 2009
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 21-07-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 29-09-2009
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Keywords: Reason to believe
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B BEFORE SHRI D. MANMOHAN (VP) & SHRI PROMOD KUMAR (A M) I.T.A.NO. 5399/MUM/2009 (ASSESSMENT YEAR : 2000-01 ) MELISMA FINANCE & TRADING PVT. LTD. 94, BHAJIPALA LANE PARDA MANSION 3 RD FLOOR, MUMBAI-400 003. VS. DCIT CENTRAL CIRCLE-34 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. PAN/GIR NO. : AAACM9378E ASSESSEE BY : SHRI VIMAL PUNMIYA DEPARTMENT BY : SHRI P.C. MAURYA DATE OF HEARING : 3.10.2011 DATE OF PRONOUNCEMENT : 12.10.2011 ORDER PER D. MANMOHAN, (VP) :- IN THIS APPEAL THE ASSESSEE-COMPANY CHALLENGED T HE JURISDICTION OF THE ASSESSING OFFICER IN MAKING AN ASSESSMENT U/ S. 143(3) OF THE ACT, WITHOUT ISSUING NOTICE U/S. 143(2) OF THE ACT WITHI N THE STATUTORY PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RET URN WAS FURNISHED. 2. FACTS IN SHORT ARE THAT THE ASSESSEE-COMPANY DEC LARED LOSS OF ` 52,19,474/- IN THE RETURN FILED ON 30.11.2000. RET URN OF INCOME SO FILED WAS PROCESSED U/S. 143(1)(A) OF THE ACT ON 29.01.20 01. HAVING PROCESSED RETURN OF INCOME, STATUTE PROVIDES THE AS SESSING OFFICER TO REOPEN THE ASSESSMENT EITHER BY SERVING A NOTICE U/ S. 143(2) OF THE ACT, IF HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LOSS, EX EMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSI BLE OR IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR (B) INCOME CHARGEABLE TO TAX HAS ESCA PED ASSESSMENT AND THIS FACT COMES TO THE NOTICE OF THE ASSESSING OFFI CER SUBSEQUENTLY, PROCEEDINGS CAN BE INITIATED BY ISSUING A NOTICE U/ S. 148 OF THE ACT. 3. IN THE INSTANT CASE THE ASSESSING OFFICER CHOSE TO ISSUE A NOTICE U/S. 143(2) OF THE ACT IN WHICH EVENT PROCEDURE PRE SCRIBED THEREIN HAS TO BE STRICTLY FOLLOWED VIZ. A NOTICE HAS TO BE SERVED ON THE ASSESSEE WITHIN MELISMA FINANCE & TRADING PVT. LTD. 2 THE STIPULATED PERIOD OF TIME. IN THIS APPEAL IT IS NOT IN DISPUTE THAT A NOTICE U/S. 143(2) OF THE ACT WAS PREPARED BY THE A SSESSING OFFICER WITHIN THE PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN OF INCOME WAS FURNISHED. ACCORDING TO THE A SSESSING OFFICER A NOTICE U/S. 143(2) OF THE ACT DATED 7.2.2001 HAS BE EN ISSUED WITHIN STIPULATED TIME. ON THE OTHER HAND CASE OF THE ASSE SSEE WAS NO SUCH NOTICE HAS EVER ISSUED BY THE ASSESSING OFFICER AND THE FIRST NOTICE, U/S. 143(2) OF THE ACT, WAS PREPARED ON 28.3.2003 AND IT WAS SERVED THEREAFTER IN WHICH EVENT PROCEEDINGS WERE BARRED B Y LIMITATION AND CONSEQUENTLY ASSESSMENT PROCEEDINGS ARE BAD IN LAW. THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) REJECTED THE CONT ENTION OF THE ASSESSEE BY MERELY OBSERVING THAT INITIAL NOTICE WAS ISSUED AND SERVED WELL WITHIN THE STATUTORY TIME PRESCRIBED UNDER ACT. 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. THOUGH THE ASSESSEE CHALLENGED THAT THE ASSESSMENT ORDER IS NO T IN CONFORMITY WITH THE PROCEDURE PRESCRIBED IN LAW, AS A MATTER OF ABU NDANT PRECAUTION ASSESSEE-COMPANY FILED AN ADDITIONAL GROUND BY CLEA RLY HIGHLIGHTING THAT NO NOTICE U/S. 143(2) OF THE ACT WAS RECEIVED BY TH E ASSESSEE BEFORE THE END OF 12 MONTHS, RECKONED FROM THE DATE OF FILING OF RETURN OF INCOME. ADDITIONAL GROUND READS AS UNDER :- THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS I N CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER OF PASSING THE ASSESSMENT ORDER. THE LEARNED CIT(A) OUGHT TO HAVE HELD THE SA ME AS BAD IN LAW AS NO NOTICE U/S. 143(2) WAS RECEIVED WITHIN TH E PRESCRIBED TIME LIMIT AND THUS ORDER PASSED U/S. 143(3) IS PAS SED WITHOUT JURISDICTION. 5. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON SEV ERAL CASE LAW IN SUPPORT OF HIS CONTENTION THAT IN THE ABSENCE OF EV IDENCE ON RECORD TO SUGGEST THAT NOTICE WAS SERVED UPON THE ASSESSEE IT HAS TO BE ASSUMED THAT NO NOTICE, MANDATED U/S. 143(2) OF THE ACT, WA S SERVED UPON THE ASSESSEE AND THEREFORE ASSESSMENT PROCEEDINGS ARE L IABLE TO BE QUASHED. 6. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, SUBMITTED THAT THIS MATTER PERTAINS TO A.Y. 2000-01 AND HENCE THERE IS NO EVIDENCE AVAILABLE ON RECORD TO PROVE THAT THE N OTICE DATED 7.2.2001 WAS IN FACT SERVED UPON THE ASSESSEE-COMPANY BUT TH E FACT THAT THE MELISMA FINANCE & TRADING PVT. LTD. 3 NOTICE WAS PREPARED AND SIGNED BY PREVIOUS ASSESSIN G OFFICER, WHO WAS HOLDING THE CHARGE AT THAT POINT OF TIME, AMPLY GOE S TO SHOW THAT THE NOTICE WAS SERVED UPON THE ASSESSEE-COMPANY. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. A PLAIN READING OF PROVISIONS OF SECTIO N 143(2), AS IT EXISTED PRIOR TO THE AMENDMENT BY THE FINANCE ACT 2003 W.E. F. 1.6.2003, SHOWS THAT NOTICE HAS TO BE NOT ONLY PREPARED BUT IT SHOU LD BE SERVED UPON THE ASSESSEE WITHIN THE PERIOD OF 12 MONTHS FROM THE EN D OF MONTH IN WHICH RETURN OF INCOME IS FURNISHED. MERELY BECAUSE A NOT ICE WAS PREPARED BY THE CONCERNED ASSESSING OFFICER BEFORE THE STATUTOR Y PERIOD IT WILL NOT AMOUNT TO COMPLIANCE OF THE CONDITION STIPULATED U/ S. 143(2) OF THE ACT; SERVICE OF NOTICE IS A PREREQUISITE FOR REOPENING O F AN ASSESSMENT SO AS TO ENABLE THE ASSESSING OFFICER TO MAKE AN ASSESSMENT U/S.143(3) OF THE ACT. IN THE INSTANT CASE THOUGH THE ASSESSEE HAS AL L ALONG BEEN PLEADING THAT THERE IS NO PROOF OF SERVICE OF NOTICE AND FIR ST NOTICE WAS EVER SERVED UPON THE ASSESSEE EXCEPT THE NOTICE DATED 28.3.2003 , NO EVIDENCE WHATSOEVER COULD BE FURNISHED BY THE ASSESSING OFFI CER TO CONTRADICT THE CLAIM OF THE ASSESSEE. UNDER THE PECULIAR CIRCUMSTA NCES OF THE CASE, WE HOLD THAT THE NOTICE DATED 7.2.2001 WAS NOT SERVED UPON THE ASSESSEE WITHIN 12 MONTHS RECKONED FROM THE DATE OF FILING O F RETURN OF INCOME. CONSEQUENTLY ASSESSMENT MADE U/S. 143(3) OF THE ACT BECOMES VOID AND LIABLE TO BE QUASHED IN THE LIGHT OF FOLLOWING DECI SIONS :- CIT VS. P.L. GANDHI, 315 ITR 110(MAD) DCIT VS. MAHI VALLY HOTELS & RESORTS, 287 ITR 360 ( GUJ) CIT VS. BHAN TEXTILES, 287 ITR 370 (DEL) 8. IN THE ABSENCE OF ANY PROOF REGARDING SERVICE OF NOTICE, WE QUASH THE ASSESSMENT ORDER. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER HAS BEEN PRONOUNCED ON 12 TH DAY OF OCTOBER, 2011. SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER SD/- (D.MANMOHAN) VICE-PRESIDENT DATED : 12 TH OCTOBER, 2011. COPY TO : 1. THE APPELLANT MELISMA FINANCE & TRADING PVT. LTD. 4 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS