M/s Cocanut Palm Beach Garden, Alappuzha V. ITO, Alappuzha

ITA 636/COCH/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73912 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-03-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 08-05-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATA V KUMAR
• Assessee Lawyers: S MAHADEVAN
• Keywords: Question of law
• Section: 142(1); 148; 11

Judgement Text

ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 1 IN THE INCOME TAX APPELA TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & B. R. BASKARAN, AM ITA NO. 636/COCH/2008 (ASST YEAR 2001 - 02 ) COCONUT PALM BEACH GARDEN C/O N C JOHN & SONS P LTD VAZHICHERRY ALLEPPY 688 001 VS THE INCOME TAX OFFICER WARD 1 ALLEPPEY ( APPELLANT) (RESPONDENT) PAN NO. AAAAC4561B ASSESSEE BY SRI S MAHADEVAN REVENUE BY SMT LATA V KUMAR, JR DR DATE OF HEARING 4 TH MARCH 2014 DATE OF PRONOUNCEMENT 7 TH MARCH 2014 OR D ER PER B.R. BASKARAN, AM: THE APP EAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31ST MARCH 2008 PASSED BY THE LD CIT(A ) - IV, KOCHI AND IT RELATES TO THE AY 2001 - 02. 2 THIS APPEAL WAS ORIGINALLY DISPOSED OF BY THE COORDINATE BENCH OF THE TRIBUNAL ON 26 TH AUG 2009. THE ASSES SEE PREFERR ED AN APPEAL BEFORE THE HONBLE HIGH COURT OF KERALA CHALLENGING THE ORDER OF THE TRIBUNAL . IT WAS INTER ALILA, CONTE NDED THAT THE ASSESSMENT GOT VITIATED I N VIEW OF FAILURE TO SERVE THE NOTICE AS PER THE PROVISIONS OF SEC. 143 ( 2) OF THE ACT . T HE HONLE HIGH COURT RESTORED THE MATTER BACK TO THE FILE OF THE TRIBUNAL WITH THE DIRECTION TO CONSIDER THE QUESTION OF LIMITATION . THE OPERATIVE PART OF THE ORDER OF THE HONBLE HIGH COURT IS READ AS UNDER: ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 2 8. AS FAR AS THE MERITS OF THE APPEAL IS CONC ERNED, AFTER PERUSING THE ORDER PASSED BY THE TRIBUNAL, WE DO NOT THINK THAT THERE IS ANY QUESTION OF LAW INVOLVED IN THE CASE AS THE FINDING OF THE AUTHORITIES ARE BASED ON FACTUAL MATERIALS. HOWEVER, IF THE QUESTION OF LIMIT ATION IS DECIDED IN FAVOUR OF THE APPEL LANT, THE ENTIRE PROCEEDINGS WI LL BE VITIATED. WE ARE OF THE OPINION, THE QUESTION OF LIMITATION IS A MATTER TO BE CONSIDERED BY THE TRIBUNAL. IF THE NOTICE UNDER SECTION 143(2) (II) IS BEYOND THE TIME SPECIFIED AND IF SO IT IS NOT IN DISPUTE THAT FURTHER PROCEEDINGS WILL BE VITIATED. THE WRIT APPEAL IS ALLOWED AS FOLLOWS: THE IMPUGNED ORDER IS SET ASIDE AND WE DIRECT THE TRIBUNAL TO CONSIDER THE MATTER AFRESH IN THE LIGHT OF THE OBSERVATIONS MADE ABOVE. 3 THE L D COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO RE - OPENED THE IMPUGNED ASSESSMENT BY ISSU ING NOTICE U/S 148 OF THE ACT ON 8 TH APRIL 2005 . T HE ASSESSEE FILED ITS RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE ON 6 TH MAY 2005. THE LD COUNSEL SUBMITTED THAT THE NOTICE U/S 143(2) OF THE ACT IS REQUIRED TO BE SERVED ON THE ASSESSEE WITHIN 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. THE LD COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT BEEN SERVED WITH A NOTICE U/S 143(2) OF THE ACT. HOWEVER, IN THE ASSESSMENT ORDER, THE A O HAS STATED THAT THE NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 3.11.2006 . EVEN IF THE DATE OF ISSUE MENTIONED IN THE ASSESSMENT ORDER IS CONSIDERED AS CORRECT FOR A MOMENT, THEN ALSO THE SAID NOTICE IS BARRED BY LIMITATION, SINCE IT WAS ISSUED AFTER TH E EXPIRY OF 12 MONTHS FROM THE DATE OF FILING OF THE RETURN. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSMENT IS REQUIRED TO BE ANNULLED AS THE PROCEEDINGS HAVE GOT VITIATED. 4. ON THE CONTRARY, THE LD DR SUBMITTED THAT THE TIME LIMIT PRESCRIBED U/S 143( 2) OF THE ACT GETS EXTENDED BY THE FIRST PROVISO GIVEN BELOW SUB S EC (I) OF SECTION 148. THE LD ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 3 DR SUBMITTED THAT AS PER THE PROVISO REFERRED ABOVE, THE NOTICE ISSUED U/S 143(2) OF THE ACT BEFORE THE EXPIRY OF TIME LIMIT FOR MAKING THE ASSESSMENT/REASSESS MENT, SHALL BE DEEMED A VALID NOTICE. THE LD DR SUBMITTED THAT THE NOTICE U/S 143(2) WAS SERVED ON THE ASSESSEE, WHICH IS EVIDENT FROM THE ORDER SHEET NOTING MADE BY THE AO. THE LD D.R SUBMITTED THAT THE L D CIT(A) HAS EXTRACTED THE RELEVANT PORTION OF THE ORDER SHEET NOTING IN PARA 7 OF HIS ORDER . FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE OBSERVATIONS MADE BY THE LD CIT(A) IN PARA 7 OF HIS ORDER: 7. THE NEXT ISSUE WITH REGARD TO REOPENING IS THE GROUND RAISED THAT THE REASON FOR REOPENING WAS N OT COMMUNICATED TO THE APPELLANT. I HAVE PERUSED THE CASE RECORDS. AS PER THE ORDER SHEET NOTING IN THE RECORDS OF THE AO, THE REASON FOR REOPENING WAS RECORDED ON 8.4.2005 AND NOTICE U/S 148 ISSUED ON THE SAME DATE. SUBSEQUENTLY AS PER ORDER SHEET ENTRY D ATED 3.11.2006, THE AO HAS RECORDED THE PRESENCE OF SHRI S MAHADEVAN, CA AND THE DELIBERATIONS WITH HIM ARE RECORDED AS FOLLOWS IN THE ORDER SHEET: SHRI MAHADEVAN, CA APPEARED. IT WAS EXPLAINED THAT R/I WAS FILED IN RESPONSE TO NOTICE U/S 148 ON 6.5.20 05 VIDE ACK. NO. 621200058. CASE DISCUSSED. DETAILS CALLED FOR REGARDING (I) EXTRACTS OF AOPS OWNERSHIP IN THE PROPERTY, (II) COST OF CONSTRUCTION, & PERIOD OF INVESTMENT AND (III) METHOD OF SEGREGATION OF SALE CONSIDERATION OF LAND & BUILDING. CASE REPOR TED TO 20.112006 AT 11 AM. NOTICE U/S 143(2) ISSUED . BELOW THE ABOVE NOTING, AS PROOF OF EVIDENCE THAT THE AR WAS PRESENT, HIS SIGNATURE HAS BEEN OBTAINED. FROM THE SAID NOTING IT IS CLEAR THAT THE FACTS LEADING TO REOPENING WERE BROUGHT TO THE NOTICE OF THE APPELLANT AND IT IS AFTER THIS DISCUSSION ON 30.11.2006 THAT NOTICE U/S 143(2) DATED 30.11.2006 IS SEEN TO HAVE BEEN ISSUED AND ACCEPTED BY THE APPELLANT. THE REASON FOR REOPENING WAS THUS BROUGHT TO THE KNOWLEDGE OF THE APPELLANT. MOREOVER, AS DIRECT ED IN THE NOTICE U/S 143(2) DATED 30.11.2006, THE AR APPEARED FOR THE NEXT HEARING ON 20.11.2006 AND FURNISHED RELEVANT PARTICULARS BEFORE THE AO. THEREFORE, AFTER HAVING ACQUIESCED WITH THE PROCEEDINGS, THE APPELLANT IS NOW PRECLUDED FROM RAISING SUCH OBJ ECTIONS AGAINST THE VERY PROCEEDINGS IN WHICH HE HIMSELF HAS PARTICIPATED AND COOPERATED. THEREFORE, IN THE LIGHT OF THE ABOVE DISCUSSION, I HOLD THAT THE GROUNDS RAISED AGAINST THE REOPE N I N G ARE WITHOUT MERITS AND THE APPELLANT FAILS ON THIS GROUND OF APP EAL. ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 4 ACCORDINGLY, THE LD D.R SUBMITTED THAT THE NOTICE U/S 143(2) WAS SERVED UPON THE ASSESSEE WITHIN THE EXTENDED TIME LIMIT PROVIDED UNDER THE PROVISO TO SUB. S EC. (1) OF SEC. 148 OF THE ACT. ACCORDINGLY, THE LD D.R CONTENDED THAT THE NOTICE U/S 143(2 ) OF THE ACT IS NOT BARRED BY LIMITATION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE ORDER PASSED BY HONBLE JURISDICTIONAL HIGH COURT. IN OUR VIEW, THE FOLLOWING OBSERVATIONS MADE BY HONBLE HIGH COURT ARE VERY MUCH RELEVANT: - 4. DURING THE COURSE OF ARGUMENT, LEARNED COUNSEL FOR THE APPELLANT CONTENDED THAT THE VERY ISSUANCE OF NOTICE UNDER SECTION 143(2) AND THE TIME PROVIDED UNDER SECTION 143(2)(II) WAS OVER. SECTION 143(2)(II) READS AS UNDER: 143. X X X X X X (2)(II) PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED. 5. IT IS NOT IN DISPUTE THAT EVEN AS P ER THE REVENUE NOTICE HAS BEEN SERVED UNDER SECTION 143(2) TO THE ASSESSEE ON 03.11.2006. THOUGH THERE WAS SOME DISPUTE REGARDING SERVICE OF NOTICE, IT IS SUBMITTED THAT FOR THE PURPOSE OF THIS APPEAL THERE WAS SERVICE OF NOTICE UNDER SECTION 142(1) OF TH E ACT WHICH ACCORDING TO THE ASSESSEE IS BAD IN LAW. ON GOING THROUGH THE PROVISIONS OF SEC. 143(2)(II) OF THE ACT, THE NOTICE IS BEYOND THE TIME SPECIFIED UNDER THE SAID PROVISIONS. HENCE FURTHER PROCEEDINGS CANNOT BE TAKEN AGAINST THE ASSESSEE . A CA REFUL READING OF THE OBSERVATIONS MADE BY HONBLE HIGH COURT WOULD SHOW THAT THE HONBLE HIGH COURT HAS MADE ITS MIND VERY CLEAR THAT THE PROCEEDINGS CANNOT BE TAKEN ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 5 AGAINST THE ASSESSEE, IF THE NOTICE ISSUED U/S 143(2)(II) IS BEYOND THE TIME SPECIFIED UND ER THE SAID PROVISIONS. 6. THE LD A.R HAS POINTED OUT THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 06.05.2005. AS PER PARAGRAPH 5 OF THE ORDER OF HIGH COURT, THE NOTICE U/S 143(2) WAS SERVED ON 03.11.2006. THE TIME GAP BETWEEN THE DATE OF FI LING OF RETURN AND THE DATE OF SERVICE OF NOTICE IS MORE THAN 12 MONTHS. HENCE THE SAID NOTICE IS BARRED BY LIMITATION IN TERMS OF THE TIME LIMIT PRESCRIBED U/S 143(2) OF THE ACT, IN WHICH CASE WE HAVE TO HOLD THAT THE IMPUGNED ASSESSMENT SHALL GET VITIAT ED IN TERMS OF THE OBSERVATIONS MADE BY HONBLE HIGH COURT. 7. THOUGH THE LD D.R CONTENDED BEFORE US THAT THE TIME LIMIT PRESCRIBED U/S 143(2) SHALL GET EXTENDED IN TERMS OF THE PROVISO TO SEC. 148(1) OF THE ACT, YET WE ARE OF THE VIEW THAT THE TRIBUN AL IS REQUIRED TO CONSIDER THE TIME LIMIT PRESCRIBED UNDER SEC. 143(2) ONLY IN TERMS OF THE ORDER OF THE HIGH COURT. ACCORDINGLY, WE DECLINE TO ENTERTAIN THE CONTENTION OF THE LD D.R RELATING TO THE PROVISO TO SEC. 148(1). 8. IN VIEW OF THE FOREGOING DISCUSSIONS, WE HOLD THAT THE NOTICE SERVED UPON THE ASSESSEE U/S 143(2) OF THE ACT IS BARRED BY LIMITATION AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER GETS VITIATED. ACCORDINGLY, WE ANNUL THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER . ITA NO. 636/COCH/2008 COCONUT PALM BEACH G ARDEN 6 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7T H DAY OF MAR 2014 . SD/ - SD/ - ( N.R.S. GANESAN ) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 7 TH MAR 201 4 RAJ* COPY TO: 1. APPELLANT COCONUT PALM BEACH GARDEN, C/O N C HJOHN & SONS P LTD, VZGHICHERRY, ALLEPPEY 688 001 2. RESPONDENT THE ITO, WARD 1, ALLEPPEY 3. CIT(A) 4. CIT , - KOTTAYAM 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN