New Okhla Industrial Development Authority, Noida V. ACIT, Noida

ITA 5879/DEL/2014

• Counselvise Citation: 587920114 RSA 2014
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Keywords: Principle of natural justice; Question of law; Procedural lapse; Block assessment
• Section: 143(3); 142(1); 147; 145; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. I. C. SUDHIR , JM ITA NO. 5879/DEL/2014 : ASSTT. YEAR : 2009 - 10 M/S NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY, SECTOR - 6, NOIDA - 201301 VS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, NOIDA (APPELLANT) (RESPONDENT) PAN NO. AA ALN0120A ASSESSEE BY : SH. AJAY WADHWA, ADV., MS. RAJ RANI LAKRA, CA , SUNIL KUMAR GUPTA, CA & DINESH VERMA, CA REVENUE BY : SH . GUNJAN PRASHAD , CIT DR DATE OF HEARING : 01 . 04 .2015 DATE O F PRONOU NCEMENT : 26 .06 .2015 ORDER PER N.K . SAINI , A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 26.09.2014 OF THE L D. CIT(A) , NOIDA . 2. FOLLOWING GROUNDS H AVE RAISED IN THIS APPEAL: 1. THAT THE LD. CIT (A) WITHOUT APPRECIATING THE MERIT OF SUBMISSION WITH RESPECT TO GROUND NO. 1 DISMISSED THE SAME HOLDING IT TO BE VAGUE AND GENERAL IN NATURE. 2. THAT THE LD. CIT (A) WITHOUT APPRECIATING THE MERIT OF WRIT TEN SUBMISSIONS WITH RESPECT TO GROUND NO.2, 4, 5 & 6 HAS SIMPLY REPRODUCED THE SAME IN HIS ORDER AND HAS DISMISSED THE SAME IN VIEW OF THE JUDGMENT OF HONORABLE ALLAHABAD HIGH COURT. ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 2 3. THAT THE LD. CIT (A) ERRED IN CONFIRMING THE ACTION OF A.O. WITH RES PECT TO GROUND NO. 4 BY NOT CONSIDERING THE SUBMISSION OF NECESSARY SUPPORTING DOCUMENTS BEFORE A.O. BY THE APPELLANT. 4. THAT THE ORDER OF THE LD. A.O. IS VOID AB INITIO IN AS MUCH AS, NO MANDATORY NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUE D AT ANY STAGE OF THE ASSESSMENT PROCEEDINGS. 5. THAT THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN TAKING THE ENTIRE SURPLUS IN THE INCOME & EXPENDITURE ACCOUNT AS INCOME. THEY HAVE FAILED TO APPRECIATE THAT THE RECEIPTS AND EXPENDITURE OF APP ELLANT HAVE COMPONENTS WHICH ARE CAPITAL IN NATURE, EXEMPT IN MANY CASES, DO NOT RELATE TO THE FINANCIAL YEAR ETC. TO SUM UP, THE COMPUTATION OF INCOME AS PER THE PROVISIONS OF INCOME TAX ACT, 1961 HAVE NOT BEEN UNDERTAKEN AND THE ENTIRE SURPLUS HAS BEEN T AKEN AS INCOME. 6. THAT THE AUTHORITIES BELOW HAVE ERRED TO APPRECIATE THE FACT THAT APPELLANT DOES NOT AND CANNOT UNDERTAKE ANY BUSINESS ACTIVITY AND, THEREFORE, THE SURPLUS, IF ANY, IS NOT TAXABLE UNDER ANY HEAD OF INCOME. 7. THAT THE AUTHORITIES BEL OW HAVE FAILED TO APPRECIATE THE FACT THAT SURPLUS AS PER THE INCOME AND EXPENDITURE ACCOUNT HAS FURTHER BEEN ALLOCATED/PROVIDED FOR THE ACTIVITIES OF APPELLANT AND, THEREFORE, THE AMOUNTS BEING IN THE NATURE OF PROVISION, THERE IS NO SURPLUS AVAILABLE TO TAXATION AFTER REDUCING THESE ALLOCATIONS/PROVISIONS. 8. THAT THE AUTHORITIES BELOW HAVE FAILED TO GIVE CREDIT FOR THE TAX COLLECTED BY THEM FROM BANKS AND INSTITUTIONS WITH WHOM APPELLANT WAS MAINTAINING DEPOSITS AND GETTING INTEREST THEREON. ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 3 9. THAT T HE AUTHORITIES BELOW HAVE ERRED IN GRANTING CREDIT FOR TDS BY ALLOTTEES AND BANKS AND IGNORED THE HUGE AMOUNTS OF TAX APPEARING IN FORM 26AS/FORM 16A. 10. THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACT THAT APPELLANT CAN BE HELD TO BE CARR YING OUT CHARITABLE ACTIVITIES AND, THEREFORE, ITS RECEIPTS ARE NOT AMENABLE TO TAX. FOR THE SAKE OF BREVITY, THE GROUNDS OF APPEAL FILED BEFORE LD. (IT (APPEAL) ARE REPRODUCED BELOW - (I) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. AO HAS ACTED AGAINST THE PRINCIPLES OF NATURAL JUSTICE IN COMPLETING THE ASSESSMENT WITHIN A SHORT PERIOD OF 39 DAYS; (II) THAT THE LD. AO ERRED IN TREATING THE EXCESS OF RECEIPTS OVER EXPENDITURE AS TAXABLE INCOME THOUGH THE APPELLANT IS PERFORM ING SOVEREIGN FUNCTIONS AS MANDATED BY THE SECTION 3 OF UTTAR PRADESH INDUSTRIAL DEVELOPMENT ACT, 1976 AND IS NOT MANDATED TO CARRY OUT ANY BUSINESS ACTIVITY. (III) THAT THE LD. AO HAS ERRED IN DISALLOWING THE EXPENSES IN THE FORM OF GRANTS TO ITTUP, GB UNIVERSITY AND UPSRTC DESPITE THE DOCUMENTARY EVIDENCES SUBMITTED TO LD. AO. THESE GRANTS ARE THE PART OF STATUTORY FUNCTIONS DISCHARGED BY THE APPELLANT AS MANDATED BY THE UTTAR PRADESH INDUSTRIAL DEVELOPMENT ACT, 1976; (IV) THAT HAVING REGARD TO THE FA CTS AND CIRCUMSTANCES OF THE CASE, THE LD. AO HAS ERRED IN INTERPRETING THE PROVISIONS OF THE SECTION 10(20) OF THE INCOME TAX ACT, 1961, ONLY RELYING UPON THE ALLAHABAD HIGH COURT JUDGMENT WITHOUT TAKING THE COGNIZANCE OF THE FACT THAT APPELLANT HAS FILED A SLP WITH HONORABLE SUPREME COURT AND LEAVE HAS BEEN GRANTED BY ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 4 THE HONORABLE SUPREME COURT VIDE ITS ORDER DATED 17.01.2014 ON THE QUESTION OF LAW; (V) THAT THE LD. AO HAS FAILED TO APPRECIATE THE FUNCTIONS PERFORMED AND DISCHARGED BY THE ASSESSEE AND IN TREATING THE STATUS OF THE ASSESSEE AS ARTIFICIAL JURIDICAL PERSON INSTEAD OF LOCAL AUTHORITY; (VI) THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. AO HAS IGNORED THE PROVISIONS OF ARTICLE 289 OF THE CONSTITUTION OF INDIA; (VI I) THAT THE LD. AO HAS ERRED AS A MATTER OF FACT IN INITIATING THE PENALTY UNDER SECTION 271A OF THE INCOME TAX ACT, 1961 AS NO BOOKS OF ACCOUNTS WERE EVER REQUIRED TO BE PRODUCED DURING THE ASSESSMENT PROCEEDINGS; (VIII) THAT THE LD. AO HAS ERRED AS A M ATTER OF FACT AND IN LAW IN INITIATING THE PENALTY UNDER SECTION 271B FOR NON SUBMISSION OF AUDIT REPORT UNDER SECTION 44AB DESPITE THE FACT THAT APPELLANT IS NOT MANDATED TO CARRY OUT ANY BUSINESS ACTIVITY BY SECTION 3 OF UTTAR PRADESH INDUSTRIAL DEVELOPM ENT ACT, 1976; (IX) THAT THE LD. AO HAS ERRED AS A MATTER OF FACT IN INITIATING THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT REGARDING CONCEALMENT OF PARTICULAR OF INCOME OF FORMULATING INACCURATE PARTICULAR OF INCOME. (X) THAT 'THE APPE LLANT CRAVES LEAVE TO ADD, AMEND, ALTER, VARY AND/OR WITHDRAW OR RESCIND ALL OR ANY OF THE GROUND OF APPEAL ON OR BEFORE THE FINAL HEARING.' ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 5 PRAYER: 1. AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE MENTIONED IN STATEMENT OF FACTS AND GROUNDS OF APPE AL SUBMITTED BY THE APPELLANT - PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT,1961 BE QUASHED. 2. THE ADDITIONS AMOUNTING TO RUPEES 1,15,86,36,500/ - MAY PLEASE BE DELETED. 3. THE ADDITIONS AMOUNTING TO RUPEES 4,51,57,86,991/ - BE MAY PLEASE BE DEL ETED. 3. AT THE FIRST INSTANCE THE LD. COUNSEL FOR THE ASSESSEE ARGUED THE LEGAL GROUND RAISED IN GROUND NO.4 WHICH RELATES TO THE NON - ISSUANCE OF MANDATORY NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BEFORE COMPLE TION OF THE ASSESSMENT . 4. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT IN THIS CASE PROCEEDINGS U/S 147/148 OF THE ACT WERE INITIATED BY THE AO AFTER RECORDING THE REASONS AND THE NOTICE U/S 148 OF THE ACT DATED 06.03.2013 WAS ISSUED AND DULY SERVED IN THE OFFICE OF CEO, NOIDA AUTHORITY ON 12.03.2013 . A S PER THE SAID NOTICE THE ASSESSEE WAS REQUIRED TO FILE ITS RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF THE SERVICE OF THE NOTICE. THE RETURN OF INCOME WAS FILED ON 13.12.2013 DECLARING NIL INCOME . THE AO NOTICED THAT THE ASSESSEE HAD ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 6 MENTIONED THAT IT WAS NOT LIABL E FOR AUDIT U/S 44AB OF THE ACT . H OWEVER, ALONGWITH RETURN , BALANCE SHEET AND INCOME & EXPENDITURE ACCOUNT ACCOMPANIED WITH SCHEDULES AND NOTES ON ACCOUNT WAS FURNISHED . THE AO NOTICED T HAT THE ASSESSEE FOR THE CURRENT YEAR HAD EXCESS OF INCOME OVER EXPENDITURE AMOUNTING TO RS. 4,51,57,86,991/ - WHICH HAD BEEN ALLOCATED FOR APPROPRIATION UNDER TWO HEADS VIZ., I) A PPROPRIATION FOR NEW INFRASTRUCTURE FACILITY II) A PPROPRIATION FOR MAINTEN ANCE & CREATION OF PUBLIC UTILITY. 5. THE AO NOTICED THAT PRIOR TO ITS CLAIM OF EXEMPTION U/S 10(20) OF THE ACT, THE ASSESSEE CLAIMED EXEMPTION U/S 10(20A) OF THE ACT , WHICH WAS OMITTED BY THE FINANCE ACT, 2002 W.E.F 01.04.2003. SUBSEQUENTLY, A WRIT WAS FILED BY THE ASSESSEE IN THE HON BLE ALLAHABAD HIGH COURT FOR ITS CLAIM U/S 10(20) OF THE ACT WHICH WAS DECIDED IN FAVOUR OF THE DEPARTMENT VIDE ORDER DATED 28.02.2011 AND AS PER THE SAID ORDER THE ASSESSEE L OST ITS EXEMPTION AND CLAIM OF L OCAL A UTHORITY W ITH REGARD TO SECTION 10(20) OF THE ACT. THE AO ADDED THE AMOUNT OF RS. 4,51,57,86,991/ - TO THE INCOME OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAD NOT DISCLOSED TAXABLE INCOME IN ITS INCOME TAX RETURN NOR ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 7 ANY TAX AUDIT REPORT HAD BEEN FURNISHED, THE REFORE, EXCESS OF INCOME OVER EXPENDITURE WAS TREATED AS TAXABLE INCOME. THE AO ALSO ADDED RS. 1,15,86,36,500/ - OUT OF THE EXPENSES BY OBSERVING THAT THE ASSESSEE HAD FURNISHED NO EVIDENCE OF ANY NATURE EVEN WHEN IT WAS ASKED TO SUBMIT EXPLANATION ALONG WI TH RELEVANT EVIDENCE AS TO WHETHER EXPENSES IN THE FORM OF GRANT TO IT TUP, GB UNIVERSITY , USRTC HAD BEEN INCURRED I N ACCORDANCE WITH THE PROVISION OF SECTION 36(1)(XII) OF THE ACT. 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND C HALLENGED THE ADDITIONS MADE BY THE AO AND ALSO STATED THAT THE AO ACTED AGAINST THE PRINCIPAL OF NATURAL JUSTICE IN COMPLETING THE ASSESSMENT. THE WRITTEN SUBMISSIONS FURNISHED BY THE ASSESSEE HAS BEEN INCORPORATED BY THE LD. CIT(A) IN PARA 4 AT PAGES NO. 8 TO 20 OF THE IMPUGNED ORDER , FOR THE COST OF REPETITION, THE SAME ARE NOT REPRODUCED HEREIN. 7 . THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAD NOT SPELT OUT ANY CONSTRAINS FACED BY ITS DURING THE ASSESSM ENT PROCEEDINGS AND THA T THE PROCEDURAL ISSUE WAS NOT RAISED DURING THE ASSESSMENT PROCEEDINGS BEFORE THE AO. HE FURTHER OBSERVED ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 8 THAT THE AO INITIATED THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2005 - 06 SUBSEQUENT TO THE AMENDMENT IN SECTION 10(20) OF THE ACT AND THE ASSESSEE FILED A WRIT PETITION BEFORE THE HON BLE ALLAHABAD HIGH COURT CHALLENGING THE ACTION OF THE AO WHEREIN VIDE ORDER DATED 28.02.2011 , I T HAS BEEN HELD THAT AFTER AMENDMENT U/S 10(20) OF THE ACT W.E.F. 01.04.2003, T HE ASSESSEE IS NOT A LOCAL AUTHORITY WITHIN THE MEANING OF SECTION 10(20) OF THE ACT. THE LD. CIT(A) ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 10(20) OF THE ACT. AS REGARDS TO THE DISALLOWANCE OF EXPENSES IN THE FORM OF GRANT TO ITTUP, GB UNI VERSIT Y, USRTC, T HE CONTENTION OF THE ASSESSEE WAS THAT THE SAID GRANT WAS ON THE PART OF STATUTORY FUNCTION DISCHARGED BY THE ASSESSEE AS MANDATED BY THE UP INDUSTRIAL DEVELOPMENT ACT, 1976. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE FAILED TO PRODUCE RELEVANT D ETAILS AND NECESSARY EVIDENCE TO EXPLAIN THE VIEW ON THE NATURE OF IMPUGNED GRANT WHICH HAD BEEN CLAIMED TO BE AN EXPENDITURE. HE ALSO OBSERVED THAT THE SUBMISSIONS OF THE ASSESSEE WAS SILENT REGARDING NATURE AS WELL AS TREATMENT OF GRANT TO ORGANIZATION A ND IT WAS NOT CLEAR AS TO WHETHER TH ESE GRANT S WERE IN THE NATURE OF EXPENSES/INVESTMENT OR LOAN/ADVANCES ETC. HE, THEREFORE, FOR WANT OF NECESSARY DETAILS FOUND NO ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 9 INFIRMITY IN THE ORDER OF THE AO IN REJECTING THE CLAIM OF THE ASSESSEE. 8 . BEING AGGRIEV ED THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE AT THE FIRST INSTANCE ARGUED THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT RAISED VIDE GROUND NO. 4 AND SUBMITTED THAT NO NOTICE U/S 143(2) OF THE ACT HAD BEEN ISSUED AFTER ISSUANCE OF NOTICE U/ S 148 OF THE ACT. IT WAS FURTHER STATED THAT THE ASSESSEE TOOK INSPECTION OF THE FILE OF THE AO ON 30.10.2014 AND DID NOT FIND ANY NOTICE U/S 143(2) CLAIMED TO HAVE BEEN ISSUED BY THE DEPARTMENT ON 16.01.2014. IT WAS CONTENDED THAT ORDER SHEET OF THE ASSES SMENT FILE MAINTAINED BY THE AO FOR THE CAPTIONED ASSESSMENT YEAR WHICH ALWAYS RECORDS FACTUM OF ISSUANCE OF ALL THE NOTICE U/S 142(1) ETC. DID NOT CONTAIN A WHISPER OF THE NOTICE S U/S 143(2) OF THE ACT AND THERE WAS NO SUCH ENTRY IN THE ORDER SHEET. IT WA S CONTENDED THAT IN THE ASSESSMENT ORDER PASSED FOR THE YEAR UNDER CONSIDERATION ALL THE NOTICES ISSUED U/S 142(1)/148 ETC. ARE MENTIONED BUT NOTHING IS MENTIONED ABOUT THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. IT WAS CONTENDED THAT NOTICE U/S 148 OF T HE ACT WAS ISSUED ON 06.03.2013 AND THE RETURN OF INCOME IN PURSUANCE THERETO WAS FILED ON 13.12.2013, AFTER THE FILING OF THE RETURN NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 10 15.12.2013 SEEKING THE DETAILS . IT WAS STATED THAT IT IS TRITE THAT DETAILS CAN ONLY BE ASKED U/S 142(1) OF THE ACT AFTER THE RETURN HAS BEEN FILED AND NOTICE U/S 143(2) OF THE ACT HAS BEEN ISSUED BUT IN THE INSTANT CASE NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED. IT WAS FURTHER STAT E D THAT THE DEPARTMENT CLAIMED THAT NOTICE U/S 143( 2) OF THE ACT WAS ISSUED ON 16.01.2014 AND ENTRY WAS MADE IN THE DISPATCH REGISTER AT SERIAL NO. 1326 BUT IN THE SAID ENTRY IT HAS BEEN MENTIONED THAT ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009 - 10 IN THE CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT A UTHORITY - REGARDING BUT NOWHERE ISSUANCE OF NOTICE U/S 143(2) HAS BEEN MENTIONED. IT WAS CONTENDED THAT AT SERIAL NO. 1326 DIFFERENT LETTER WAS ISSUED AND NOT THE NOTICE U/S 143(2) OF THE ACT. IT WAS EMPHASIZED THAT THE ASSESSEE IS ALSO MAINTAINING VERY ST RICT RECORD OF CORRESPONDENCE BUT THERE WAS NO CORRESPONDENCE RELATING TO NOTICE U/S 143(2) OF THE ACT. 9. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THE NOTICE DATED 16.01.2014 CLAIMED TO BE A NOTICE U/S 143(2) OF THE ACT BY THE DEPARTMENT WAS WITH RE GARD TO THE SUBJECT ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009 - 10 IN THE CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 11 ADDRESSED TO THE C.E.O WHICH WAS ENTERED AT SERIAL NO. 554 ON 21.04.2014 AND THE STAMP OF C.E.O OFFICE WAS PLACED ON THE S AID LETTER (A REFERENCE WAS MADE TO PAGE NO. 139 OF THE ASSESSEE S PAPER BOOK). THE SAID LETTER FROM THE C.E.O OFFICE MOVED TO A.C.O S OFFICE VIDE RECEIPT NO. 712 DATED 21.01.2014 (COPY OF WHICH IS PLACED AT PAGE NO. 169 OF THE ASSESSEE S PAPER BOOK). THE SAID LETTER IS HAVING THE STAMP OF THE A.C.O S OFFICE. IT WAS FURTHER STATED THAT FROM THE A.C.O S OFFICE THE LETTER MOVED TO F.C S OFFICE VIDE REC EIPT NO. 4492 DATED 28.01.2014 (COPY OF WHICH IS PLACED AT PAGE NO. 201 OF THE ASSESSEE S PAPER BOOK) AND FRO M THERE IT MOVED TO SENIOR FINANCE AND ACCOUNTS OFFICE VIDE RECEIPT NO. 3753 DATED 28.01.2014 (COPY OF WHICH IS PLACED AT PAGE NO. 219 OF THE ASSESSEE S COMPILATION). ON THE BASIS OF AFORESAID ENTRIES IN VARIOUS DEPARTMENT OF THE ASSESSEE AND RECEIPT REGIS TER, I T WAS SUBMITTED THAT THE NOTICE DATED 16.01.2014 BEARING THE STAMP AND RECEIPTS OF THE VARIOUS OFFICES , IS A CONTEMPORARY EVIDENCE WHICH CONCLUSIVELY ESTABLISHED THE FACT THAT THE CLAIM OF THE DEPARTMENT WAS MERELY AN AFTERTHOUGHT. IT WAS SUBMITTED T HAT WHEN THE ASSESSEE STATED THAT NO NOTICE HAD BEEN RECEIVED , THE BURDEN WAS ON THE DEPARTMENT TO PROVE THE SERVICE OF THE SAME BUT NO SUCH SERVICE OF THE NOTICE U/S 143(2) OF THE ACT ON THE ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 12 ASSESSEE WAS PROVED BY THE DEPARTMENT. IT WAS SUBMITTED THAT ISS UANCE OF NOTICE U/S 143(2) OF THE ACT IS MANDATORY AND FAILURE TO ISSUE THE NOTICE U/S 143(2) OF THE ACT WITHIN THE PRESCRIBED PERIOD CANNOT BE CURED BY TA KING RECOURSE TO SECTION 292BB OF THE ACT. IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSMENT FRAMED WI THOUT ISSUING THE NOTICE U/S 143(2) OF THE ACT WAS BAD - IN - LAW AND DESERVES TO BE QUASHED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: ACIT VS HOTEL BLUE MOON (2010) 321 ITR 362 (SC) CIT VS ADARSH BUS TRAVEL (ALL. HC( (2010) 204 TAXMAN 114 CIT VS R AJEEV SHARMA (ALL. HC) (2010) 336 ITR 678 CIT VS SALARPUR COLD STORAGE (P) LTD. (2015) 228 TAXMAN 48 (ALL. HC) CIT VS MUKESH KUMAR AGRAWAL (2012) 345 ITR 29 (ALL. HC) CIT VS M/S BORA POLYCLINIC PVT. LTD. (ALL. HC) (ITA NO. 134 OF 2005 & 135 OF 2005) ORDER DATED 05.07.2010 ALPINE ELECTRONICS ASIA PTE. LTD. VS DGIT (DEL HC) (2012) 341 ITR 247 RAJ KUMAR CHAWLA VS ITO (DEL ITAT) (SB) (2005) 1 SOT 934 DCIT VS M/S SILVER LINE (ITA NO. 1809, 1504, 1505 & 1506/DEL/2013) ORDER DATED 26.09.2014 ADARSH EDUCATION SOCIE TY VS ITO (2006) 8 SOT 847 (DEL) CIT VS PANORAMA BUILDERS (P.) LTD. (2014) 224 TAXMAN 203 (GUJ. HC) ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 13 ITO VS ALIGARH AUTO CENTRE (2013) 58 SOT 90 (AGRA ITAT) GREATER NOIDA INDUSTRIAL DEVELOPMEN T AUTHORITY VS ACIT IN ITA NOS. 5821 TO 5826/DEL/2014 ORDER DATED 09.01.2015 10 . IN HIS RIVAL SUBMISSIONS THE LD. CIT DR DEFENDED THE IMPUGNED ORDER AND SUBMITTED THAT IN THIS CASE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 06.03.2013 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME IN 30 DAYS BUT THE ASSESSEE FILED THE RETURN OF INCOME ON 13.12.2013. IT WAS FURTHER SUBMITTED THAT THE IN COME TAX ACT DOES NOT PRESCRIBE THAT ORDER SHEET ENTRY SHOULD HAVE ALL THE ENTRIES NO R DOES THE ACT MENTION ABOUT THE ORDER SHEET OR THAT IN THE ASSESSMENT ORDER THE ISSUANCE OF NOTICE U/ S 143(2) BE MENTIONED. IT WAS FURTHER SUBMITTED THAT ASSUMING BUT NOT ADMITTING THAT THE NOTICE U/S 1 43(2) OF THE ACT WAS NOT ISSUED, E VEN THEN A NOTICE IS ISSUED JUST TO PUT THE ASSESSEE ON NOTICE BUT THERE IS NO STATUTORY FOR M FOR THE NOTICE U/S 143(2) O F THE ACT AND IF THERE IS A DETAIL SHOW CAUSE NOTICE , THAT WOULD SUFFICE THE PURPOSE OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS MADH A Y BHARAT ENERGY CORPORATION LTD. (2011) 337 ITR 389 (DEL) MOD H AYUB VS ITO 346 ITR 30 (ALL) KIRAN NAGJI NISAR 114 ITD 319 ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 14 CIT VS JAI PRAKASH SINGH 219 ITR 737 (SC) VAKIL CHAND JAIN VS ITO 43 ITD 442 (DEL) RATTAN LAL TIKKU VS CIT 97 ITR 553 (J&K) INTRACRAFT INDIA VS CIT 154 ITR 662 (DEL) SANT BABA MOHAN SINGH 90 ITR 197 (ALL) AREVA T&D INDIA LTD. VS ACIT 207 CTR (MAD) 497 TRAVANCORE CEMENTS LTD. VS ACIT (2008) 305 ITR 170 (KER) UOI VS R. C. JAIN & ORS. 1981 AIR 951 VIDARBHA IRRIGATION DEVELOPMENT CORP. VS JCIT (2006) 114 TTJ 524 (MUM) 11 . IT WAS FURTHER SUBMITTED THA T SECTION 148(1) OF THE ACT CLEARLY STATES THAT THE ASSESSEE IS TO BE SERVED A NOTICE CLEARLY SPECIFYING THAT THE ASSESSEE SHOULD BE TOLD ABOUT THE PERIOD (30 DAYS IN THIS CASE) AND THE ASSESSEE IS REQUIRED TO FILE THE RETURN OF INCOME IN THE PRESCRIBED MA NNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED , AND THEREAFTER PROVISIONS OF SECTION 139 OF THE ACT WOULD BE APPLICABLE. IT WAS CONTENDED THAT IN THE PRESENT CASE, NOTICE U/S 148 OF THE A CT HAD BEEN ISSUED ON 06.03.2013 TO THE ASSESSEE AND THE RETURN OF INCOME WAS FILED ON 13.12.2013 BY SHOWING NIL INCOME. IT WAS CONTENDED THAT FOR FILING THE RETURN OF INCOME, THERE IS NO NEED TO ISSUE THE NOTICE U/S 143(2) OF THE ACT AND AS THE ASSESSMENT WAS FRAMED BY TAKING INTO CONSIDERATION THE RETU RN FILED BY THE ASSESSEE. THEREFORE, THE ASSESSMENT FRAMED BY THE AO WAS VALID ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 15 PARTICULARLY WHEN NO OBJECTION WAS RAISED BEFORE THE AO RELATING TO THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: MOHD. AYUB VS ITO (346 ITR 30 (ALL): 2012) CIT VS MADHYA BHARAT ENERGY CORPORATION LTD. (337 ITR 389 (DEL): 2011) KIRAN NAGJI NISAR VS ITO (2007) 112 ITR (MUM) 773: 2008 CIT VS JAI PRAKASH SINGH (219 ITR 737 (SC)/1996) TRAVANCORE CEMENTS LTD. VS ACIT (305 ITR 170 (K ERALA)/2008) CIT VS S. A. BUILDERS LTD. (P&H) (2013) 93 DTR (P&H) 256 UNION OF INDIA & ORS VS R.C. JAIN & ORS (1981 AIR 951, 1981 SCR (2) 854) VIDARBHA IRRIGATION DEVELOPMENT CORPORATION VS JCIT (2006) 104 ITR (MUM) 524: 2006 ASHOK CHADDHA VS ITO (2011) ( DEL) 245 CTR 416 12 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT WERE INITIATED BY T HE AO AFTER RECORDING THE REASONS , THE NOTICE U/S 148 OF THE ACT DATED 06.03.2013 WAS ISSUED AND DULY SERVED IN THE OFFICE OF THE ASSESSEE ON 12.03.2013 REQUIRING THE ASSESSEE TO FILE THE RETURN WITHIN 30 DAYS FR OM THE SERVICE OF THIS ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 16 NOTICE, HOWEVER, NO R ETURN WAS FURNISHED BY SPECIFIED DATE BUT LATER ON THE RETURN OF INCOME DECLARING NIL INCOME WAS FILED ON 13.12.2013 . A LONG WITH SAID R ETURN, THE ASSESSEE FURNISHED COPIES OF BALANCE SHEET AND INCOME & EXPENDITURE ACCOUNT S ACCOMPANIED WITH SCHEDULES AND NOTES ON ACCOUNT . O N THE BASIS OF THOSE DOCUMENTS FURNISHED ALONG WITH THE RETURN OF INCOME, T HE AO FRAMED THE ASSESSMENT U/S 147 R.W.S. 143 OF THE ACT. HOWEVER, IT IS RELEVANT TO POINT OUT THAT IN COLUMN NO. 12 OF THE ASSESSMENT ORDER DATED 29.01.2014, THE AO STATED SECTION 147 OF THE ACT UNDER WHICH THE ASSESSMENT WAS FRAMED. HE DID NOT MENTION THAT THE ASSESSMENT WAS FRAMED EITHER U/S 143(3) O R 144 R.W.S. 147 OF THE ACT. I T IS ALSO NOTICED THAT IN THE BODY OF THE ORDER AT PAGE NO. 2 THE AO MENTIONED TH AT THE ASSESSEE WAS REQUIRED TO FURNISH REPLIES TO QUESTIONNAIRE U/S 142(1) OF THE ACT ON 24.12.2013 AT 11:30 AM. THE AO SPECIFICALLY MENTIONED AT PAGE NO. 2 OF THE ASSESSME NT ORDER DATED 29.01.2014 THAT ACCORDINGLY BASED ON AVAILABLE OF INFORMATION ON R ECORD NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 15.12.2013 FOR COMPLIANCE ON 24.12.2012 . HOWEVER, NOWHERE IT WAS STATED THAT NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE . A T PAG E NO. 4 OF THE ASSESSMENT ORDER, T HE AO HAS MENTIONE D AS UNDER: ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 17 AFTER GIVING SUFFICIENT TIME TO THE ASSESSEE TO MAKE STIPULATED COMPLIANCE, THIS OFFICE HAD NO OPTION TO ISSUE SHOW CAUSE NOTICE TO THE ASSESSEE VIDE LETTER DATED 16.01.2014 WHEREIN , IT WAS GIVEN FINAL OPPORTUNITY TO REPRESENT AND EXPLAIN ON 2 3.01.2014 FAILING WHICH THIS OFFICE HAD NO ALTERNATIVE EXCEPT THE COMPLE TE THE ASSESSMENT ON MERIT AND ON THE BASIS OF THE MATERIAL FACTS AVAILABLE ON RECORD . COPY OF THE SAID LETTER DATED 16.01.2014 IS PLACED AT PAGE NO. 110 OF THE ASSESSEE S PAPER BOO K - II. THE SAID LETTER IS REPRODUCED AS UNDER: TO, THE CHIEF EXECUTIVE OFFICER, NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY, MAIN ADMINISTRATIVE BUILDING, SECTOR - 6, NODIA. KIND ATTN: MR. G.P. SINGH, FINANCE CONTROLLER, NODIA SIR, SUB: ASSESSMENT PROCEEDINGS FOR THE AY 2009 - 10 IN THE CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY - REGARDING PLEASE REFER TO THE ASSESSMENT PROCEEDINGS INITIATED THROUGH NOTICE U/S 148 DATED 06.03.2013 AND SERVED TO YOUR OFFICE ON 12.03.2013. FURTHER, ALSO REFER TO THIS OFFICE NOTICE U/S 142(1) ALONG ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 18 WITH QUESTIONNAIRE DATED 15.12.2014 WHEREBY, YOU WERE REQUIRED TO FURNISH DETAILED REPLIES. AS PER ASSESSMENT PROCEEDINGS ATTENDED BY YOU R A.R., ONLY FEW QUERIES WERE ADDRESSED AND THE CASE WAS SCHEDULED FOR HEARING ON 15.01.2014 AS PER REQUEST OF YOU R AR. IT IS NOTICED THAT THERE WAS NO COMPLIANCE ON ABOVE MENTIONED DATE NOR ANY DETAILS WERE FILED IN THIS OFFICE. IT IS FURTHER NOTICED THAT ITR FOR AY 2009 - 10 WHICH WAS FILED IN THIS OFFICE U/S 148 HAD NO ENTRIES OR D ETAILS OTHER THAN NIL FIGURES. IN VIEW OF THIS YOU ARE PROVIDED FINAL OPPORTUNITY TO PLEAD YOUR CASE BY FILING COMPLETE REPLIES TO QUESTIONNAIRE AND ATTEND AS PER DATE MENTIONED BELOW. FURTHER, YOU ARE REQUIRED TO SHOW CAUSE AS TO WHY NO INCOME HAS BEEN DECLARED IN ITR FOR AY 2009 - 10 WHEN EXEMPTION U/S 10(20) STANDS IN VALID FOR NOIDA AUTHORITY AS ON DATE AS PER JUDGMENT OF HON BLE ALLAHABAD HIGH COURT DATED 28.02.2011. ACCORDINGLY YOUR CASE IS SCHEDULED FOR HEARING ON 23.01.2014 AT 11:00 AM. PLEASE NOTE THAT IN CASE OF NON ATTENDANCE OR FAILURE TO PROVIDE REQUISITE DETAILS, I SHALL BE CONSTRAINT TO PASS ORDER ON MERITS AND AS PER AVAILABLE INFORMATION ON RECORD. YOURS FAITHFULLY, SD/ - (ABHISHEK GAUT AM, IRS) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 1, NOIDA ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 19 13 . FROM THE CONTENTS OF THE AFORESAID LETTER , IT IS CRYSTAL CLEAR THAT NOTHING WAS MENTIONED IN THIS LETTER ABOUT THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. THE CLAIM OF THE DEPARTMENT WAS TH AT THE NOTICE U/S 143(2) WAS ISSUED ON 16.01.2014 , HOWEVER, N OTHING WAS BROUGHT ON RECORD THAT APART FROM THE AFORESAID LETTER DATED 16.01.2014 ANY OTHER NOTICE OR LETTER OR DOCUMENT WAS ISSUED BY THE DEPARTMENT TO THE ASSESSEE. IN THE PRESENT CASE, I T WAS ALSO CLAIMED BY THE DEPARTMENT THAT AN ENTRY WAS MADE AT SERIAL NO. 1326 OF THE DISPATCH REGISTER . T O VERIFY THE ABOVE SAID CLAIM W E ASK ED THE DEPARTMENT TO PRODUCE DISPATCH REGISTER WHICH WAS PRODUCED DURING THE COURSE OF HEARING AND IT IS NOTICED THA T A T SERIAL NO. 1326 THE CONTEND S MENTIONED WERE AS UNDER: SL. NO. DATE NAME & ADDRESS PLACE SUBJECT FILE HEAD/ NO. STAMPS RECEIVED STAMPS AFFIXED STAMPS BALANCE REMARKS 1326 THE CHIEF EXECUTIVE OFFICER, NEW OKHLA INDUSTRIAL DEVELOPM ENT AUTHORITY , MAIN ADMI NISTR ATIVE BUI LDING , SECTOR - 6, NOIDA SUB: - ASSESSMENT PROCEEDINGS FOR THE AY 2009 - 10 IN THE CASE OF NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY - REGARDING 14 . FROM THE ABOVE NOTINGS , IT IS CLEAR THAT NOTHING WAS MENTIONED ABOUT THE ISSUANCE OF NOTICE U/S 143(2) OF THE ACT ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 20 AT SERIAL NO 1326. IT IS ALSO CLEAR THAT THE DEPARTMENT WAS UNABLE TO PRODUCE ANY EVIDENCE TO SUBSTANTIATE THAT NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE . 15. NOW QUESTION ARISES AS TO WHETHER THE ASSESSMENT FRAMED WITHOUT ISSUING THE NOTICE U/S 143(2) OF THE ACT IS A VALID ASSESSMENT. IN THIS REGARD THE HON BLE SUPREME COURT IN THE CASE OF ACIT VS HOTEL BLUE MOON (2010) 321 ITR 362 (SUPRA ) HELD AS UNDER: IF THE ASSESSING OFFICER, FOR ANY REASON, REPUDIATES THE RETURN FIL ED BY AN ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 158BC(A) OF THE INCOME - TAX ACT, 1961 RELATING TO A BLOCK ASSESSMENT, THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECT ION 143(2). BY MAKING THE ISSUE OF NOTICE MANDATORY, SECTION 158BC, DEALING WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOUNDATION FOR JURISDICTION. SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCOME. SECTIO N 158BC PROVIDES FOR ENQUIRY AND ASSESSMENT. AFTER THE RETURN IS FILED, CLAUSE (B) OF SECTION 158BC PROVIDES THAT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 21 SUB - SECTIONS (2) AND (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FAR AS MAY BE, APPLY . THIS INDICATES THAT THIS CLAUSE ENABLES THE ASSESSING OFFICER, AFTER THE RETURN IS FILED, TO COMPLETE THE ASSESSMENT UNDER SECT ION 143(2) BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER SECTION 143(2)/142. THIS DOES NOT PROVIDE ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143(1)(A): THE OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) ONLY. IF AN ASSESSMENT IS T O BE COMPLETED UNDER SECTION 143(3) READ WITH SECTION 158BC, NOTICE UNDER SECTION 143(2) SHOULD BE ISSUED WITHIN ONE YEAR FROM THE DATE OF FILING OF THE BLOCK RETURN. OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143(2) CANN OT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQUIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH. 16 . SIMILARLY, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS RAJEEV SHARMA (2011) 336 ITR 678 HELD AS U NDER: WHEN THE STATUTE PROVIDES FOR A PARTICULAR PROCEDURE, THE AUTHORITY HAS TO FOLLOW IT AND CANNOT BE PERMITTED TO ACT IN CONTRAVENTION OF THE SAME. IT HAS BEEN PROVIDED THAT AFTER RECEIPT OF NOTICE UNDER SECTION 148 OF THE INCOME - TAX ACT, 1961, A FRE SH RETURN MAY BE FILED AND IN CONSEQUENCE THEREOF, THE ASSESSING OFFICER HAS TO APPLY HIS MIND TO THE CONTENTS OF THE FRESH RETURN AND THEN ISSUE A NOTICE UNDER SECTION 143(2) OF THE ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 22 ACT. WHILE COMPUTING ESCAPED ASSESSMENT, THE RETURN FILED IN RESPONSE TO A NOTICE UNDER SECTION 148 SHALL BE DEEMED TO BE FURNISHED UNDER SECTION 139 OF THE ACT. MEANING THEREBY, THAT THE PROCEDURE OF SECTION 139 OF THE ACT SHALL BE FOLLOWED WHILE DEALING WITH THE CASE OF ESCAPED ASSESSMENT UNDER SECTION 148 OF THE ACT. THE PLA IN READING OF SECTION 148 OF THE ACT FURTHER REVEALS THAT WITHIN THE STATUTORY PERIOD SPECIFIED THEREIN, IT SHALL BE INCUMBENT TO SEND A NOTICE UNDER SECTION 143(2). THE PROVISIONS CONTAINED IN SECTION 148 OF THE ACT WITH REGARD TO ESCAPED ASSESSMENT, MUST BE CONSTRUED STRICTLY WITH REGARD TO THE PROCEDURE PRESCRIBED FOR ESCAPED ASSESSMENT. 17 . IN ANOTHER CASE OF SIMILAR NATURE THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS MUKESH KUMAR AGRAWAL (2012) 345 ITR 29 BY TAKING INTO CONSIDERATION T HE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AN D THE PROVISIONS OF SECTION 292 BB OF THE ACT HAS HELD AS UNDER (HEAD NOTE) : THE SUPREME COURT HELD IN HOTEL BLUE MOON S CASE (2010) 321 ITR 362 (SC) THAT IF THE ASSESSING O FFICER, FOR ANY REASON, REPUDIATES THE RETURN FILED BY AN ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 158BC(A) OF THE ACT RELATING TO A BLOCK ASSESSMENT, THE ASSESSING OFFICER MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2). IT WAS FURTHER HELD THA T BY MAKING THE ISSUE OF NOTICE MANDATORY, SECTION 158BC, DEALING WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOUNDATION FOR ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 23 JURISDICTION. SUCH NOTICE IS REQUIRED TO BE SERVED ON THE PERSON, WHO IS FOUND TO HAVE UNDISCLOSED INCOME. THE REQUIREMENT O F NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH. SECTION 292BB IS A RULE OF EVIDENCE, WHICH VALIDATES THE NOTICE IN CERTAIN CIRCUMSTANCES. THE NEWLY INSERTED SECTION 292BB PROVIDES THAT WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDINGS OR CO - OPERAT ED 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 AN D SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY UNDER THE ACT THAT THE NOTICE WAS NOT SERVED UPON HIM OR NOT SERVED UPON HIM IN TIME OR SERVED UPON HIM IN AN IMPROPER MANNER. IN THE PRESENT CASE, THE TRIBUNAL HAS RETURNED THE FINDINGS THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ADMITTEDLY NOT ISSUED IN THIS CASE. THE ASSESSING AUTHORITY THUS DID NOT HAVE JURISDICTION TO PROCEED FURTHER AND MAKE ASSESSMENT. WE DO NOT FIND THAT THE NON - CONSIDERATION OF SECTI ON 292BB, WHICH IS RULE OF EVIDENCE, AND A DEEMING PROVISION TO VALIDATE THE NOTICE IN CERTAIN CIRCUMSTANCES, WILL HAVE ANY EFFECT ON THE JUDGMENT IN HOTEL BLUE MOON (2010) 321 ITR 362 (SC). IT WAS HELD IN HOTEL BLUE MOON S CASE (2010) 321 ITR 362 (SC) THA T THE VERY FOUNDATION OF THE JURISDICTION OF THE ASSESSING OFFICER IS ON THE ISSUANCE OF THE NOTICE UNDER SECTION 143(2). ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 24 18 . FROM THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO JUDICIAL PRONOUNCEMENTS, IT IS CRYSTAL CLEAR THAT WHERE NOTICE U/S 143(2) OF THE ACT IS NOT ISSUED TO THE ASSESSEE BEFORE FRAMING THE ASSESSMENT U/S 143(3 ) OF THE ACT , T HE AO DOES NOT HAVE THE JURISDICTION TO MAKE THE ASSESSMENT. IN THE PRESENT CASE, THE AO ISSUED THE NOTICE U/S 148 OF THE ACT AND THE ASSESSEE FURNISHED THE RETU RN OF INCOME IN RESPONSE TO THE SAID NOTICE. THEREAFTER THE AO ASKED THE ASSESSEE TO FURNISH CERTAIN DETAILS BY ISSUING THE QUESTIONNAIRE U/S 142(1) OF THE ACT BUT NOWHERE ISSUED THE NOTICE U/S 143(2) OF THE ACT. THEREFORE, THE ASSUMPTION OF JURISDICTION F OR FRAMING THE ASSESSMENT WAS INVALID. 19. NOW QUESTION ARISES AS TO WHETHER THE PROVISIONS OF SECTION 292BB OF THE ACT COME TO THE RESCUE OF THE DEPARTMENT, EVEN WHEN THE NOTICE U/S 143(2) OF THE ACT IS NOT ISSUED WITHIN THE STIPULATED TIME. ON THIS ISS UE THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT - II, LUCKNOW VS SALARPUR COLD STORAGE (P.) LD. (2014) 50 TAXMANN.COM 105 (SUPRA) HAS HELD AS UNDER: WHERE THE ASSESSING OFFICER FAILS TO ISSUE A NOTICE WITHIN THE PERIOD OF SIX MONTHS AS SPELT OU T IN THE PROVISO TO CLAUSE (II) OF SECTION 143(2), THE ASSUMPTION OF JURISDICTION UNDER SECTION 143(3) ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 25 WOULD BE INVALID. THIS DEFECT IN REGARD TO THE ASSUMPTION OF JURISDICTION CANNOT BE CURED BY TAKING RECOURSE TO THE DEEMING FICTION UNDER SECTION 292BB. THE FICTION IN SECTION 292BB OVERCOMES A PROCEDURAL DEFECT IN REGARD TO THE NON SERVICE OF A NOTICE ON THE ASSESSEE, AND OBVIATES A CHALLENGE THAT THE NOTICE WAS EITHER NOT SERVED OR THAT IT WAS NOT SERVED IN TIME OR THAT IT WAS SERVED IN AN IMPROPER MANNE R, WHERE THE ASSESSEE HAS APPEARED IN A PROCEEDING OR COOPERATED IN AN ENQUIRY WITHOUT RAISING AN OBJECTION. SECTION 292BB CANNOT COME TO THE AID OF THE REVENUE IN A SITUATION WHERE THE ISSUANCE OF A NOTICE ITSELF WAS NOT WITHIN THE PRESCRIBED PERIOD, IN W HICH EVENT THE QUESTION OF WHETHER IT WAS SERVED CORRECTLY OR OTHERWISE, WOULD BE OF NO RELEVANCE WHATSOEVER. FAILURE TO ISSUE A NOTICE WITHIN THE PRESCRIBED PERIOD WOULD RESULT IN THE ASSESSING OFFICER ASSUMING JURISDICTION CONTRARY TO LAW. 20 . SIMILAR LY, THE HON BLE DELHI HIGH COURT IN THE CASE OF ALPINE ELECTRONICS ASIA PTE. LTD. VS DGIT (2012) 341 ITR 247 HELD AS UNDER: SECTION 143(2) OF THE INCOME - TAX ACT, 1961, IS APPLICABLE TO PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. THE PROVISO TO SECTION 148 OF THE ACT GRANTS LIBERTY TO THE REVENUE TO SERVE NOTICE UNDER SECTION 143(2) OF THE ACT BEFORE PASSING THE ASSESSMENT ORDER FOR RETURNS FURNISHED ON OR BEFORE OCTOBER 1, 2005. IN RESPECT OF RETURNS FILED PURSUANT TO NOTICE UNDER SECTION 148 OF THE ACT AFTER OCTOBER 1, 2005, IT IS MANDATORY TO SERVE ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 26 NOTICE UNDER SECTION 143(2) OF THE ACT, WITHIN THE STIPULATED TIME LIMIT. SECTION 292BB INCORPORATES THE PRINCIPLES OF ESTOPPEL. IT STIPULATES THAT AN ASSESSEE, WHO HAS APPEARED IN ANY PROCEEDING AND CO - OPE RATED IN ANY ENQUIRY RELATING TO ASSESSMENT OR REASSESSMENT SHALL BE DEEMED TO BE SERVED WITH ANY NOTICE WHICH WAS REQUIRED TO BE SERVED AND WOULD BE PRECLUDED FROM OBJECTING THAT THE NOTICE WAS NOT SERVED UPON HIM OR WAS SERVED UPON HIM IN AN IMPROPER MAN NER OR WAS NOT SERVED UPON HIM IN TIME. HOWEVER, THE PROVISO STATES THAT THE PRINCIPLE OF ESTOPPELS INCORPORATED IN THE MAIN SECTION WOULD NOT APPLY, IF THE ASSESSEE HAS RAISED OBJECTION IN REPLY TO THE NOTICE BEFORE COMPLETION OF ASSESSMENT OR REASSESSMEN T. 21 . IN THE PRESENT CASE, AS WE HAVE ALREADY NOTED THAT THE NOTICE U/S 143(2) OF THE ACT WAS NEITHER ISSUED NOR SERVED UPON THE ASSESSEE BEFORE MAKING AN ORDER OF ASSESSMENT U/S 143(3 ) R.W.S. 147 OF THE ACT . I T IS WELL SETTLED THAT THE ISSUANCE OF NOT ICE U/S 143(2) OF THE ACT IS NOT PROCEDURAL IRREGULARITIES AND THE SAME IS NOT CURABLE, THEREFORE, THE REQUIREMENT OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT CANNOT BE DISPENSE D WITH AND NO ASSESSMENT CAN BE FRAMED U/S 143(3) R.W.S. 147 OF THE ACT WITHOUT ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. WE, THEREFORE, CONSIDERING THE LEGAL POSITION IN VIEW OF THE RATIO LAID DOWN BY THE HON BLE ITA NO.5879 /DE L/201 4 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY 27 SUPREME COURT AND THE HON BLE HIGH COURTS IN THE AFORESAID REFERRED TO CASES , HOLD THE ASSESSMENT ORDER DATED 29.01.2014 AS INVALID & VOID AND QUASH THE SAME AS SUCH. 22 . FOR THE AFORESAID VIEW WE ARE ALSO FORTIFIED BY THE DECISION OF THE CO - ORDINATE BENCH I.E. ITAT DELHI BENCH C , NEW DELHI IN THE CASE OF GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY VS ACIT, CIRCLE - 3 IN ITA NOS. 5821 TO 5826/DEL/2014 FOR THE ASSESSMENT YEARS 2006 - 07 TO 2011 - 12 ORDER DATED 09.01.2015, COPY OF THE SAME IS PLACED AT PAGE NOS. 33 TO 47 OF THE ASSESSEE S PAPER BOOK. 23 . SINCE WE HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE, SO NO FINDING HAS BEEN GIVEN ON THE MERIT OF THE CASE. 24 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 26 /0 6 / 2015) . SD/ - SD/ (I. C. SUDHIR ) ( N. K. SAINI ) JUDI CIAL MEMBER ACCOUNTANT MEMBER DATED: 26 /06 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR