Smt Madhulika Choudhary, New Delhi V. ITO, New Delhi

ITA 6092/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58755 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-03-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Opportunity of being heard; Block assessment; Reassessment proceedings
• Section: 142(1)

Judgement Text

IT ANO. 6092/DE/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 6092/DEL/2010 A.Y. : 2003-04 SMT. MADHULIKA CHOUDHARY, H.NO. 101-102, POCKET B-6, SECTOR-3, ROHINI, NEW DELHI (PAN :AAIPC 6468L) VS. INCOME TAX OFFICER, WARD 19(2), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. ANIL SHARMA, ADV. DEPARTMENT BY : SH. R. S . NEGI, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 07.10. 2010 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONE R OF INCOME TAX (APPEALS) ERRED BOTH ON FACTS AND IN LAW IN UPHOLDI NG THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER U/ S. 147/148 OF THE ACT. 3. ON THIS ISSUE, LD. COUNSEL OF THE ASSESSEE HAS AVERRED THAT NOTICE U/S. 143(2) WAS NOT ISSUED AND SERVED ON T HE ASSESSEE AND IN THIS VIEW OF THE MATER, THE VALID OF JURISDICTION H AS NOT BEEN ASSUMED IT ANO. 6092/DE/2010 2 IN THIS CASE. THIS ASPECT WAS ALSO RAISED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DEALT WITH THE ISSUE AS UNDER:- I HAVE CAREFULLY CONSIDERED THE VARIOUS ARGUMENTS RAISED BY THE APPELLANT AND ALSO THE MATERIAL BROUGHT ON R ECORD BY THE ASSESSING OFFICER. ON THE ISSUE OF NOTICE U/S. 143(2), I HAVE CALLED FOR AND EXAMINED THE CASE RECORDS OF THE ASSESSING OFFICER. I FIND THAT THE NOTICE DATED 1 0.10.2007, ALONG WITH QUESTIONNAIRE, IS A NOTICE U/S. 142(1) O F THE ACT. HOWEVER, NOTICE U/S 142(1) AND NOTICE U/S. 143(2) B OTH DATED 13.11.2007 ARE AVAILABLE IN THE FILE. POSTA L ACKNOWLEDGEMENT OF DISPATCH ON 14.11.2007 IS ALSO AVAILABLE AND THE ORDER SHEET SHOWS ENTRY ON 13.11 .2007 WHICH READS AS UNDER SHOW CAUSE NOTICE ISSUED FIXI NG THE CASE FOR 19.11.2007 ALONGWITH NOTICE U/S. 143(2). HOWEVER, IT HAS BEEN ARGUED BY THE APPELLANT TH AT SHE HAS RECEIVED ONLY NOTICES U/S 142(1) AND IN VIE W OF THE JUDGEMENT OF THE SPECIAL BENCH OF THE DELHI, ITAT, THE ASSESSMENT IS FARMED WITHOUT JURISDICTION. I HAVE CAREFULLY GONE THROUGH THE JUDGEMENT OF THE SPECIAL BENCH OF THE DELHI ITAT IN THE CASE OF RAJ KUMAR CHAWLA VS. ITO AT 94 ITD IT ANO. 6092/DE/2010 3 1. THE SAID JUDGMENT HAS BEEN RENDERED IN THE CONT EXT OF A CASE WHERE NOTICE U/S. 143(2) WAS NOT ISSUED WITH OUT THE PRESCRIBED PERIOD OF 12 MONTHS AND HENCE THE PROCE EDINGS WERE HELD TO BE TIME BARRED. IT WAS HELD BY THE LD. COURT THAT IF NOTICE U/S. 143(2) WAS NOT SERVED WITHIN THE PE RIOD PRESCRIBED BY THE PROVISO TO SECTION 143(2), THE RE TURN FILED WILL BE DEEMED TO BE ACCEPTED. IT WAS HELD THAT TH E PURPOSE OF THE PROVISO IS ONLY TO MAKE THE ASSESSEE AWARE THAT HIS ASSESSMENT IS GOING TO BE TAKEN OR NOT UND ER SCRUTINY. IN THE FACTS OF THE CASE CONSIDERED BY THE SPECIAL BENCH OF THE DELHI ITAT, NOTICE U/S. 143(2) WAS ISSU ED MORE THAN 12 MONTHS AFTER THE FILING OF RETURN IN RESPO NSE TO NOTICE U/S. 148. THE COURT HELD THAT PROVISIONS OF LIMITATIONS ARE TO BE STRICTLY CONSTRUED, AND THEREFORE NO ASSE SSMENT COULD BE MADE U/S. 147 WHEN THE NOTICE U/S. 143(2) H AD NOT BEEN ISSUED WITHIN 12 MONTHS FORM THE DATE OF FILING OF THE RETURN. IT CAN BE SEEN THAT THE FACTS OF THE PR ESENT CASE ARE QUITE DISTINCT. EVEN IF IT IS ACCEPTED THAT THE APPELLANT DID NOT RECEIVE THE NOTICE U/S. 14392) DATED 13.11. 2002, EVEN THEN THERE IS NO QUESTION OF THE PROCEEDINGS BEING BARED BY LIMITATION AS EVEN THE ASSESSMENT ORDER HA S BEEN IT ANO. 6092/DE/2010 4 PASSED WITHIN 12 MONTHS FROM THE DATE OF FILING OF T HE RETURN. MOREOVER, THE APPELLANT HAS BEEN REPRES ENTED, THROUGH HER AUTHORIZED REPRESENTATIVE, ON NOT LESS THAN 4 OCCASIONS BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS AND THEREFORE AMPLE OPPORTUNITIES WERE GRANTED, UNDOUBTEDLY WITHIN 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. THE APPELLANT HAS ALSO NOT RAISED THESE OBJECTIONS BEFORE THE ASSESSING OFFICER BUT HAS AT TENDED BEFORE THE ASSESSING OFFICER ON SEVERAL OCCASIONS. THE MADRAS HIGH COURT IN THE CASE OF AREVA T&D INDIA L TD. VS. ACIT (294 ITR 233) HAS HELD THAT WHERE THE ASSESSEE HAS PARTICIPATED IN REASSESSMENT PROCEEDINGS, THE FAIL URE TO ISSUE NOTICE U/S. 143(2) WILL RENDER THE REASSESSME NT ORDER NOT VOID BUT IRREGULAR. IN THAT CASE, THE MATTER WA S REMITTED TO THE ASSESSING OFFICER. ONCE THE ASSESSEE HAS PARTICIPATED IN THE PROCEEDINGS, THE DOCTRINE OF W AIVER OR ACQUIESCENCE IS ATTRACTED. AS THE APPELLANT HAS PARTICIPATED IN THE PROCEEDINGS INITIATED BY THE AS SESSING OFFICER, THEN LATER THERE CAN BE NO COMPLAINT OF LA CK OF JURISDICTION. THE WAIVER HAS TO BE INFERRED FROM SUCH AN ACTION. THE PURPOSE OF SECTION 143(2) IS TO ALLOW THE IT ANO. 6092/DE/2010 5 APPELLANT AN OPPORTUNITY OF BEING HEARD. ALLOWING THE OPPORTUNITY OF BEING HEARD, HOWEVER, WITHOUT ISSUE OF NOTICE U/S. 143(2), WOULD AMOUNT TO AN IRREGULARITY, BUT NO T AN ILLEGALITY. CONSIDERING ALL THESE FATS, I HOLD THAT THE APPELLANTS ARGUMENTS IN THIS CONNECTION ARE MISPLAC ED AND THERE HAS BEEN A VALID ASSUMPTION OF JURISDICTIO N BY THE ASSESSING OFFICER, TO ASSESS THE INCOME U/S. 147 OF THE ACT. 4. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 5. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE N OTICE U/S 143(2) OF THE ACT IS REQUIRED TO ASSUME VALID JURISDICTION. HE CLAIMED THAT IN THIS CASE NOTICE U/S 142(1) OF THE ACT DATED 10.10. 2007 ALONGWITH NECESSARY QUESTIONNAIRE WAS ISSUED AND SERVED UPON THE ASSESSEE AND THEREAFTER, ANOTHER NOTICE U/S 142(1) DATED 13. 11.2007 WAS ISSUED AND SERVED UPON THE ASSESSEE AND NO NOTICE U/S. 143 (2) WAS EVER SERVED UPON THE ASSESSEE. IN THIS REGARD, LD . COUNSEL OF THE ASSESSEE HAS RELIED UPON THE CATENA OF CASE LAWS FO R THE PROPOSITION THAT THE REASSESSMENT PROCEEDINGS ARE INVALID WITH OUT A VALID NOTICE U/S. 143(2). 5.1 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND IN THIS CASE THAT LD. COMMISSIONER OF INCOME T AX (APPEALS) IN HIS APPELLATE ORDER HAS NOTED THAT NOTICE U/S 142(1) AN D 143(2) BOTH IT ANO. 6092/DE/2010 6 DATED 13.11.2007 ARE AVAILABLE IN THE FILE. FURTHERMO RE, HE HAS NOTED THAT THE POSTAL ACKNOWLEDGEMENT OF DISPATCH DATED 14 .11.2007 IS ALSO AVAILABLE. HE HAS FURTHER NOTED THAT ORDER SHEET SHOWS ENTRY ON 13.11.2007 WHICH READS AS UNDER SHOW CAUSE NOTICE ISSUED FIXING THE CASE FOR 19.11.2007 ALONGWITH NOTICE U/S. 143(2). THIS ASPECT WAS VEHEMENTLY CONTESTED BY THE ASSESSEE. LD. COUNSEL O F THE ASSESSEE CLAIMED THAT ONLY NOTICE U/S 142(1) WAS RECEIVED AN D NO NOTICE U/S 143(2) WAS RECEIVED. WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER HELD THAT EVEN IF IT IS ACCEP TED THAT THE ASSESSEE DID NOT RECEIVE THE NOTICE U/S 143(2) DATED 13.11.2 007, EVEN THEN THERE IS NO QUESTION OF THE PROCEEDINGS BEING BARR ED BY LIMITATION AS EVEN THEN ASSESSMENT ORDER HAS BEEN PASSED WITHIN 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. HE HAS FURTHE R NOTED THAT MOREOVER, THE ASSESSEE HAS BEEN REPRESENTED, THROUGH HER AUTH ORIZED REPRESENTATIVE, ON NOT LESS THAN 4 OCCASIONS BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS AND THEREFORE AMPLE OPPORTUNI TIES WERE GRANTED, UNDOUBTEDLY WITHIN 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. IT WAS FURTHER NOTED THAT ASSESSEE HAS ALSO NOT RAISED THESE OBJECTIONS BEFORE THE ASSESSING OFFICER BUT HAS AT TENDED BEFORE THE ASSESSING OFFICER ON SEVERAL OCCASIONS. LD. COMMI SSIONER OF INCOME TAX (APPEALS) HAS FURTHER REFERRED THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF AREVA T&D INDIA LTD. VS. ACIT (294 ITR 233) WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSEE HAS PARTICIPATED IN REASSESSMENT PROCEEDINGS, THE FAILURE TO ISSUE NOTIC E U/S. 143(2) WILL RENDER THE REASSESSMENT ORDER NOT VOID BUT IRREGULA R. IN THAT CASE, THE MATTER WAS REMITTED TO THE ASSESSING OFFICER. LD. COU NSEL OF THE ASSESSEE IN THIS REGARD HAS CONTESTED THE FINDING O F THE LD. COMMISSIONER OF INCOME TAX (APPEALS). HE REFERRED T O THE CASE LAW OF IT ANO. 6092/DE/2010 7 THE HONBLE DELHI HIGH COURT THAT IN THE CASE OF C.I.T. VS. PAWAN KUMAR GUPTA (2009) 318 ITR 322 (DEL.) IN THE CONTEX T OF ISSUE OF NOTICE U/S 143(2) IN BLOCK ASSESSMENT, WHICH ARE IN PARI MA TERIA TO PROCEEDINGS U/S. 148, WHEREIN IT HAS HELD THAT SECT ION 143(2) IS A MANDATORY PROVISION WHETHER ONE LOOKS AT IT FROM THE STANDPOINT OF A REGULAR ASSESSMENT OR FROM THE STANDPOINT OF AN ASS ESSMENT UNDER CHAPTER XIVB. SECTION 143(2) HAS NO APPLICATION I N A SITUATION WHERE THE ASSESSING OFFICER, ON RECEIPT OF THE RETURN OF UNDISCLOSED INCOME IN THE FORM NO. 2B FROM THE ASSESSEE, IS SATISFIED WITH T HE SAME AS REFLECTING THE TRUE STATE OF AFFAIRS THEN IT IS NOT NECESSARY FOR HIM TO EMBARK UPON ANY FURTHER ENQUIRY OR INVESTIGATION BUT WHERE THE ASSESSING OFFICER IS NOT INCLINED TO ACCEPT THE RE TURN OF UNDISCLOSED INCOME FILED BY THE ASSESSEE, THE PROCEDURE IN SECT ION 143(2) HAS TO BE FOLLOWED. IF AN ASSESSMENT ORDER IS PASSED IN SUC H A SITUATION WITHOUT ISSUING A NOTICE U/S. 143(2), IT WOULD BE INVALID A ND NOT MERELY IRREGULAR. ON THE ANVIL OF THE AFORESAID JURISDIC TIONAL HIGH COURT DECISION, IN OUR CONSIDERED OPINION, A NOTICE U/S 1 43(2) IS MANDATORY FOR VALIDATING THE REASSESSMENT PROCEEDINGS. IN T HE PRESENT CASE, IT IS NOT CLEAR THAT WHERE THE NOTICE WAS ISSUED AND SE RVED UPON THE ASSESSEE OR NOT, AS LD. COMMISSIONER OF INCOME TAX ( APPEALS) HAS NOT CLEARLY GIVEN A FINDING AS TO WHETHER NOTICE U/S . 143(2) WAS ISSUED OR NOT. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIO N AND PERUSED THE RECORDS. BOTH THE COUNSEL FAIRLY AGREED THAT IN THE INTEREST OF JUSTICE, THE MATTER NEEDS TO BE REMITTED TO THE FILE OF THE AS SESSING OFFICER TO CONSIDER THE ISSUE AFRESH. ACCORDINGLY, THE ISSUE STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE S AME AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE O PPORTUNITY OF BEING HEARD. IT ANO. 6092/DE/2010 8 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/3/2012. SD/- SD/- [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 01/3/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES