Lucky Machines P.Ltd, Faridabad V. DCIT, Circle-1, Faridabad

ITA 5415/DEL/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9123 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: K C SINGHAL
• Keywords: Reassessment proceedings; Set aside
• Section: 143(1); 292BB; 143(2); 13; 68; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.5415/DEL./2019 ASSESSMENT YEAR 2010-11 M/S LUCKY MACHINES P. LTD. KAWARA INDUSTRIAL AREA, KAWARA ROAD, NEAR LINGYAS COLLEGE, FARIDABAD. PAN NO. AABCL7307H VS. DCIT CIRCLE-1, FARIDABAD, HARYANA. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C. SINGHAL, ADVOCATE FOR REVENUE : SHRI PRAKASH DUBEY, SR. DR DATE OF HEARING : 0 4 .01.2021 DATE OF PRONOUNCEME NT : 08 .01.2021 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-FARIDABAD DATED 22.05.201 9 FOR AY 2010-11. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES THROUGH VIDEO CONFERRING AND PERUSED THE MATERIAL O N RECORD. 3. LD. COUNSEL FOR ASSESSEE DID NOT PRESS GROUND NO . 1 & 2 OF THE APPEAL REGARDING INITIATION OF REASSESSMENT PROCEEDINGS. THE SAME IS DISMISSED AS NOT PRESSED. 2 ITA.NO.5415/DEL./2019 4. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN OF INCOME DECLARING RS. 500/- WAS E-FILED BY THE ASSESSEE COM PANY ON 12.09.2010. THE RETURN WAS PROCESSED U/S 143(1) OF THE IT ACT, AS SUCH. THE AO ISSUED NOTICE U/S 148 ON 31.0 3.2017 AFTER RECORDING THE REASONS THAT THE ASSESSEE COMPA NY HAS RECEIVED ACCOMMODATION ENTRY FROM GRACE EXIM PVT. L TD. IN A SUM OF RS. 4 LAKHS. THE ASSESSEE SUBMITTED BEFORE AO IN ITS SUBMISSION DATED 19.04.2017, THE RETURN FILED ORIGI NALLY MAY BE CONSIDERED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT. THE ASSESSEE FILED DETAILED REPLY BEFO RE AO OBJECTING TO THE PROPOSED ACTION U/S 148 OF THE ACT AS WELL AS ADDITION ON MERITS. THE AO, HOWEVER, MADE ADDITION OF RS. 4 LAKHS U/S 68 OF THE ACT IN REASSESSMENT ORDER DATED 24.12.2017 U/S 143(3)/147 OF THE ACT. 5. THE ASSESSEE CHALLENGED THE AFORESAID ADDITION B EFORE LD. CIT(A) AS WELL AS CHALLENGED THE LEGALITY OF THE AS SESSMENT ORDER BY STATING THAT AO HAS ERRED IN LAW AND FACTS BY NOT ISSUING AND SERVING THE STATUTORY NOTICE PRESCRIBED U/S 143(2) OF THE ACT, THEREFORE, REASSESSMENT ORDER IS ILLEGA L, WITHOUT JURISDICTION AND CONTRARY TO LAW AND VOID AB INITIO AND, AS SUCH, LIABLE TO BE QUASHED. THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO IN WHICH THE AO HAS STATE D THAT NO NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE BECAUS E IT WAS BASED ON THE BELIEF THAT NOTICE U/S 143(2) IS NOT R EQUIRED IN REASSESSMENT PROCEEDINGS. THE LD. CIT(A) NOTED THA T SINCE 3 ITA.NO.5415/DEL./2019 ASSESSEE HAS PARTICIPATED IN THE REASSESSMENT PROCE EDINGS ON DIFFERENT DATES AND ASSESSEE HAS NEVER RAISED OBJEC TIONS REGARDING NON ISSUE OF NOTICE U/S 143(2) OF THE ACT BEFORE AO, THEREFORE, SAME IS NOT FATAL TO THE REASSESSMENT PR OCEEDINGS. THE GROUND OF APPEAL OF THE ASSESSEE WAS DISMISSED. 6. LD. COUNSEL FOR ASSESSEE REFERRING TO GROUND NO. 3 SUBMITTED THAT IMPUGNED ASSESSMENT ORDER IS ILLEGAL BEING WITHOUT JURISDICTION, SINCE MANDATORY NOTICE U/S 14 3(2) WAS NEVER ISSUED. LD. COUNSEL FOR ASSESSEE SUBMITTED T HAT ISSUE IS COVERED BY JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LAXMAN DAS KHANDELWAL 108 TAXMAN.COM 183 (SC) IN WHICH IT WAS HELD THAT FOR SECTION 292BB TO APPL Y, SECTION 143(2) NOTICE MUST HAVE EMANATED FROM DEPARTMENT AN D IT IS ONLY INFIRMITIES IN MANNER OF SERVICE OF NOTICE THA T SECTION SEEKS TO CURE AND IT IS NOT INTENDED TO CURE COMPLE TE ABSENCE OF NOTICE ITSELF. 7. ON THE OTHER HAND, LD. DR SUBMITTED THAT SINCE T HE ASSESSEE PARTICIPATED IN THE REASSESSMENT PROCEEDIN GS AND NEVER RAISED THE ISSUE OF NON-ISSUE OF NOTICE U/S 1 43(2) BEFORE AO, THEREFORE, PROVISIONS OF SECTION 292BB WOULD AP PLY AGAINST THE ASSESSEE AND REASSESSMENT ORDER HAS BEE N CORRECTLY PASSED BY THE AO EVEN FOR NON-ISSUE OF NO TICE U/S 143(2) OF THE ACT. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL ON RECORD. PROVISO TO SECTION 143(2) PROV IDES, 4 ITA.NO.5415/DEL./2019 PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM TH E END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. IT IS AN ADMITTED FACT THAT ASSESSEE IN RESPONSE TO THE NOTI CE U/S 148 OF THE ACT DATED 31.03.2017 FILED A LETTER BEFORE A O DATED 19.04.2017 STATING THEREIN THAT RETURN FILED U/S 13 9 ON 12.09.2010 MAY BE TREATED AS RETURNED FILED IN RESP ONSE TO THE NOTICE U/S 148 OF THE ACT. THUS, ASSESSEE MADE COM PLIANCE TO THE NOTICE U/S 148 OF THE ACT. IT IS AN ADMITTED F ACT THAT THE AO DID NOT ISSUE ANY NOTICE U/S 143(2) AT THE REASS ESSMENT PROCEEDINGS. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. LAXMAN DAS KHANDELWAL (SUPRA) CONSIDERING THE I SSUE OF NON-ISSUE OF NOTICE U/S 143(2) IN THE LIGHT OF PROV ISIONS OF SECTION 292BB OF THE ACT HELD AS UNDER: A CLOSE LOOK AT SECTION 292BB SHOWS THAT IF THE ASSESSEE HAS PARTICIPATED IN THE PROCEEDINGS, IT SH ALL BE DEEMED THAT ANY NOTICE WHICH IS REQUIRED TO BE SERV ED UPON WAS DULY SERVED AND THE ASSESSEE WOULD BE PRECLUDED FROM TAKING ANY OBJECTIONS THAT THE NOTIC E WAS (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANN ER. ACCORDING TO SECTION 292BB, IF THE ASSESSEE HAD PARTICIPATED IN THE PROCEEDINGS, BY WAY OF LEGAL FI CTION, NOTICE WOULD BE DEEMED TO BE VALID EVEN IF THERE BE INFRACTIONS AS DETAILED IN SAID SECTION. THE SCOPE OF SECTION 292BB IS TO MAKE SERVICE OF NOTICE HAVING CERTAIN INFIRMITIES TO BE PROPER AND VALID IF THERE WAS REQUISITE PARTICIPATION ON PART OF THE ASSESSEE AND SECTION DOES NOT SAVE COMPLETE ABSENCE OF NOTICE AN D, THUS, FOR SECTION 292BB TO APPLY, THE NOTICE MUST H AVE 5 ITA.NO.5415/DEL./2019 EMANATED FROM THE DEPARTMENT AND IT IS ONLY THE INFIRMITIES IN THE MANNER OF SERVICE OF NOTICE THAT THE SECTION SEEKS TO CURE AND IT IS NOT INTENDED TO CUR E COMPLETE ABSENCE OF NOTICE ITSELF. SINCE THE FACTS ON RECORD ARE CLEAR THAT NO NOTICE U/S 143(2) WAS EVER ISSUED BY THE DEPARTMENT, THE FINDI NGS RENDERED BY THE HIGH COURT AND THE TRIBUNAL AND THE CONCLUSION ARRIVED AT WERE CORRECT. THERE IS NO RE ASON TO TAKE A DIFFERENT VIEW IN THE MATTER. 9. CONSIDERING THE ABOVE, IT IS CLEAR THAT ISSUE IS COVERED BY THE JUDGMENT OF SUPREME COURT IN THE CASE OF LAXMAN DAS KHANDELWAL (SUPRA) IN FAVOUR OF THE ASSESSEE. THUS , ALL THE OBJECTIONS OF THE LD. DR ARE OVERRULED. SINCE, NO NOTICE U/S 143(2) HAS BEEN ISSUED BY THE AO AT REASSESSMENT PR OCEEDINGS WHICH IS MANDATORY FOR COMPLETION OF ASSESSMENT, TH EREFORE, REASSESSMENT ORDER IS BAD IN LAW, ILLEGAL AND VOID AB INITIO AND, AS SUCH, LIABLE TO BE QUASHED. IN VIEW OF THE ABOV E DISCUSSION, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REASSESSMENT PROCEEDINGS AND DELETE THE ENTIRE ADDI TIONS. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08.01.2021. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 08.01.2021 *KAVITA ARORA 6 ITA.NO.5415/DEL./2019 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6 . GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.