M/s. Lexpo International, CHENNAI V. ACIT, CHENNAI

ITA 542/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64168 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: S M SURANA; D ANAND
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 542/MDS/2012 ASSESSMENT YEAR : 2006-07 M/S. LEXPO INTERNATIONAL, FLAT NO. E-2/6, GEMINI PARSN APTS., OLD # 599, NEW # 448,CATHEDRAL GARDEN ROAD, ANNA SALAI, CHENNAI 600 006. [PAN:AAAFL1977F] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE XIII, CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.M. SURANA & SHRI D. ANAND RESPONDENT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 28.08.2012 DATE OF PRONOUNCEMENT : 05.09.2012 ORDER PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) XII, CHENNAI D ATED 21.12.2011 FOR THE ASSESSMENT YEAR 2006-07. SHRI S.M. SURANA AND S HRI D. ANAND, ADVOCATES REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL REPRESENTED ON BEHALF OF THE REVENUE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.542 542542 542/M/ /M/ /M/ /M/12 1212 12 2 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPE AL CONTENDING THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN C ONFIRMING THE ASSESSMENT AND THE NOTICE UNDER SECTION 143(2) OF T HE ACT WAS NOT SERVED WITHIN THE TIME ALLOWED AND THEREFORE THE ASSESSMEN T IS BAD IN LAW. 3. FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF EXPORT OF LEATHER GARMENTS FILED ITS RETURN OF INCO ME FOR THE ASSESSMENT YEAR 2006-07 ON 31.10.2006 DECLARING LOSS OF ` .1,08,41,652/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 30.07. 2007 ACCEPTING THE LOSS RETURNED BY THE ASSESSEE. THE ASSESSMENT WAS SUBSEQ UENTLY COMPLETED UNDER SECTION 143(3) OF THE ACT ON 24.12.2008 DETER MINING THE INCOME AT ` .4,78,188/- BEFORE SET OFF OF UNABSORBED BUSINESS L OSS AND NIL INCOME AFTER SET OFF OF LOSS. WHILE COMPLETING THE ASSESSMENT, T HE ASSESSING OFFICER DISALLOWED THE ASSESSEES CLAIM FOR LOSS OF STOCK D UE TO THEFT FOR AN AMOUNT OF ` .1,13,19,840/-. 4. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) CONTENDING THAT THE ASSESSMENT MADE BY TH E ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT IS BAD IN LAW, AS N O NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED AS CONTE MPLATED IN THE PROVISIONS OF SECTION 143(2) OF THE ACT. ON SERVICE OF NOTICE UNDER SECTION 143(2) BEYOND THE TIME LIMIT STIPULATED, THE COMMISSIONER OF INCOME TAX (APPEALS) I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.542 542542 542/M/ /M/ /M/ /M/12 1212 12 3 OBSERVED THAT THE ASSESSEE NEVER OBJECTED OR DISPUT ED THE ISSUE OF SERVICE OF NOTICE BEFORE THE ASSESSING OFFICER AND THEREFOR E, THE OBJECTION RAISED BY THE ASSESSEE CANNOT BE AGITATED BEFORE THE APPELLAT E AUTHORITIES. ON MERITS, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE SO CALLED THEFT WAS CLAIMED TO HAVE BEEN TAKEN PLACE IN AUGUST, 1997, T HEREFORE, THE SAID LOSS, IF ANY, PERTAINS TO THE ASSESSMENT YEAR 1998-99 AND TH US, THE SAID LOSS CANNOT BE ALLOWED IN ANY OTHER ASSESSMENT YEAR AS EACH ASS ESSMENT YEAR IS INDEPENDENT AND SEPARATE. AGAINST THIS ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE FILED AN APPEAL BEFORE US. 5. THE FIRST ISSUE IN THE GROUNDS OF APPEAL IS WIT H REGARD TO NON-SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT BEFORE COMPL ETION OF ASSESSMENT UNDER SECTION 143(3). THE COUNSEL FOR THE ASSESSEE SUBMITS THAT NOTICE UNDER SECTION 143(2) WAS NOT SERVED ON THE ASSESSEE AND IN THE ABSENCE OF SERVICE OF NOTICE UNDER SECTION 143(2), THE ASSESSM ENT MADE UNDER SECTION 143(3) IS BAD IN LAW. THE COUNSEL SUBMITS THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 31.10.200 6 AND AS PER THE PROVISIONS OF SECTION 143(2), NOTICE UNDER SECTION 143(2) SHOULD HAVE BEEN SERVED 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED I.E. 31.10.2007. THE COUNSEL SUBMITS THAT NO NOTICE UNDE R SECTION 143(2) WAS SERVED BEFORE 31.10.2007 AND IN THE ABSENCE OF SERV ICE OF NOTICE, THE ASSESSMENT MADE IS BAD IN LAW. THE COUNSEL RELIED O N THE DECISION OF THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.542 542542 542/M/ /M/ /M/ /M/12 1212 12 4 HONBLE SUPREME COURT IN THE CASE OF ACI V. HOTEL B LUE MOON [321 IR 362] AND THE DECISION OF THE HONBLE MADRAS HIGH COURT I N THE CASE OF CIT V. C. PALANIAPPAN [284 ITR 257]. 6. THE COUNSEL FOR THE REVENUE SUBMITTED THAT AS P ER THE RECORD, A NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSES SEE. THE ASSESSEE HAS COOPERATED IN THE ASSESSMENT PROCEEDINGS AND NEVER RAISED THIS OBJECTION IN THE ASSESSMENT PROCEEDINGS, THEREFORE, THE ASSESSME NT MADE IS IN ACCORDANCE WITH LAW. 7. WE HAVE HEARD BOTH SIDES AND PERUSED THE MATERI ALS ON RECORD. IN THIS CASE, NO EVIDENCE IS PLACED ON RECORD TO PROVE THAT THE NOTICE IS SERVED ON THE ASSESSEE WITHIN THE STIPULATED TIME AS PER THE PROVISIONS OF SECTION 143(2) OF THE ACT. THE DEPARTMENT HAS NOT DEMONSTRA TED THAT THE NOTICE UNDER SECTION 143(2) WAS SERVED ON THE ASSESSEE WIT HIN THE TIME CONTEMPLATED UNDER SECTION 143(2) SO AS TO PROCEED FURTHER FOR COMPLETION OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. SINCE N O NOTICE UNDER SECTION 143(2) WAS SERVED ON THE ASSESSEE WITHIN 12 MONTHS FROM THE END OF THE MONTH ON WHICH THE RETURN WAS FILED, THE ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT IS BAD IN LAW IN VIEW OF THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT V. HOTEL BLUE MOO N (SUPRA). THEREFORE, I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.542 542542 542/M/ /M/ /M/ /M/12 1212 12 5 WE SET ASIDE THE ASSESSMENT MADE UNDER SECTION 143( 3) OF THE ACT FOR THE ASSESSMENT YEAR 2006-07. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 5 TH OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER CHENNAI, DATED, THE 05.09.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.