ACIT, Cir-I, Aurangabad, V. Nilesh Steel & Alloys P.Ltd, Jalna

ITA 651/PUN/2012

• Counselvise Citation: 65124514 RSA 2012
• Duration Of Justice: 3 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MITALI MADHUSMITA
• Keywords: Reopening of assessment; Block assessment
• Section: 69C; 143(3); 142(1); 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.649 TO 652/PN/2012 (ASSESSMENT YEARS : 2005-06 TO 2008-09) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 1, AURANGABAD. . APPELLANT VS. M/S NILESH STEEL & ALLOYS PVT. LTD., D-69, ADDL. MIDC, JALNA. PAN : AABCN4686K . RESPONDENT C.O. NOS.19 TO 22/PN/2013 (ARISING OUT OF ITA NOS. 649 TO 652/PN/2012) (ASSESSMENT YEARS : 2005-06 TO 2008-09) M/S NILESH STEEL & ALLOYS PVT. LTD., D-69, ADDL. MIDC, JALNA. PAN : AABCN4686K . CROSS OBJECTOR VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 1, AURANGABAD. . APPELLANT IN APPEAL DEPARTMENT BY : SMT. MITALI MADHUSMITA, CIT ASSESSEE BY : SHRI S. N. PURANIK DATE OF HEARING : 10-03-2015 DATE OF PRONOUNCEMENT : 31-03-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED ARE FOUR APPEALS BY THE REVENUE AND C ROSS-OBJECTIONS BY THE ASSESSEE RELATING TO ASSESSMENT YEARS 2005-0 6 TO 2008-09. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES OF THE DISPUTE IN ALL THE FOUR CAPTIONED ASSESSMENT YEARS ARE IDENTICAL, THEREFORE THE CAPTIONED APPEALS HAVE BEEN CLUBBED AND HEARD TOGET HER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE A ND BREVITY. 2. IN VIEW OF COMMONALITY OF DISPUTE IN ALL THE APP EALS, THE APPEAL OF THE REVENUE AND ASSESSEES CROSS-OBJECTION FOR ASSESSME NT YEAR 2005-06 VIDE ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 ITA NO.649/PN/2012 AND C.O. NO.19/PN/2013 RESPECTIV ELY ARE TAKEN AS THE LEAD CASE. 3. THE APPEAL OF THE REVENUE AND THE CROSS-OBJECTIO N BY THE ASSESSEE FOR ASSESSMENT YEAR 2005-06 ARE DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DA TED 04.01.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.12.2010 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 OF THE INCOME-TAX ACT , 1961 (IN SHORT THE ACT). 4. IN THE APPEAL OF THE REVENUE, THE FOLLOWING GROU NDS OF APPEAL HAVE BEEN RAISED :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE CIT(A) WAS CORRECT IN HOLDING IN THAT THE ORDER IS NULL AND VOID AB INITIO EVEN THE DECISION OF HON'BLE DELHI HIGH COURT IN TH E CASE OF CIT VS. MADHYA BHARAT ENERGY CORPORATION LTD. HOLDING THAT A NOTICE U/S. 143(2) IS NOT REQUIRED IN THE CASES WHEREIN NOTICE U/S. 14 8 WAS ISSUED AND OPPORTUNITY BY ISSUE OF NOTICE U/S. 142(1) AND QUES TIONNAIRE IS GIVEN TO THE ASSESSEE (62 DTR 37) (DEL) (HC). 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT (A) WAS CORRECT IN HOLDING THAT THE ASSESSMENT ORDER IS BAD - IN - LAW DUE TO NON ISSUE OF NOTICE U/S. 143(2) WHEN NO RETU RN WAS FILED BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED U/S. 148? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN QUANTIFYING THE SUPPRESSED PRODUCTION @ 4% EVEN AFTER ACCEPTING THE FACT THAT THE ASSESSEE INDULGED IN CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF TAXES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E WHETHER THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FACT T HAT MANUFACTURING AND ADMINISTRATIVE EXPENSES ON THE UNACCOUNTED PRODUCTI ON WORKED OUT IN THE APPELLATE ORDER HAD ALREADY BEEN BORNE BY THE P RODUCTION SHOWN IN THE BOOKS OF ACCOUNTS? 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND WITHOUT PREJUDICED TO THE ABOVE, WITH REGARD TO ADDITION U/ S. 69C THE CIT(A) IS CORRECT IN HOLDING THAT THE ADDITION SHALL BE SUM U P WITH THE ISSUE OF SUPPRESSED PRODUCTION? 6. THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT (A) BE VACATED. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY GROUNDS OF APPEAL. ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 5. IN BRIEF, THE RELEVANT FACTS ARE THAT THE RESPON DENT-ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE CO MPANIES ACT, 1956 AND IS, INTER-ALIA, ENGAGED IN THE BUSINESS OF MANUFACT URE OF MS INGOTS/BILLETS. FOR THE ASSESSMENT YEAR 2005-06, IT FILED A RETURN OF I NCOME ORIGINALLY ON 24.10.2005 DECLARING A TOTAL INCOME OF RS.1,75,15,2 40/-, WHICH WAS SUBJECT TO A SCRUTINY ASSESSMENT U/S 143(3) ON 27.11.2007 WHER EIN THE TOTAL INCOME WAS DETERMINED AT RS.1,77,16,438/-. IT TRANSPIRES THAT SUBSEQUENTLY THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD VIDE LETTER DATED 29 .03.2010 STATING THAT ASSESSEE HAD INDULGED IN MANUFACTURING OF FINISHED GOODS AND REMOVAL THEREOF WITHOUT PAYING EXCISE DUTY. THE INFORMATIO N SO RECEIVED FROM THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGA BAD WAS ACCOMPANIED BY AN ADJUDICATION ORDER OF THE COMMISSIONER OF CEN TRAL EXCISE QUANTIFYING THE ASSESSABLE VALUE OF SUPPRESSED PRODUCTION FOR THE Y EAR UNDER CONSIDERATION. INFORMATION WAS ALSO RECEIVED THAT ASSESSEE, IN ANO THER MATTER IN CONNECTION WITH AN ACTION CONDUCTED BY THE DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE (DGCEI), CONFESSED AND ADMITTED TO CLA NDESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT EXCISE COVER BEFORE THE E XCISE AUTHORITIES. IN VIEW OF SUCH INFORMATION, THE ASSESSING OFFICER REOPENED THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT BY INVOKING THE PRO VISIONS OF SECTION 147/148 OF THE ACT. AFTER RECORDING THE REASONS AS PRESCRI BED IN SECTION 147 OF THE ACT, ASSESSING OFFICER ISSUED NOTICE U/S 148 ON 30.03.20 10 REOPENING THE ASSESSMENT IN ORDER TO ASSESS CERTAIN INCOME CHARGE ABLE TO TAX WHICH HAD ESCAPED ASSESSMENT QUA THE SUPPRESSED PRODUCTION. AS A CONSEQUENCE OF THE INITIATION OF RE-ASSESSMENT PROCEEDINGS U/S 147 /147 OF THE ACT, THE ASSESSING OFFICER FINALIZED AN ASSESSMENT U/S 143(3 ) R.W.S. 147 OF THE ACT DATED 30.12.2010 WHEREIN THE TOTAL INCOME WAS DETER MINED AT RS.30,94,36,657/- AS AGAINST THE INCOME OF RS.1,77, 16,438/- ORIGINALLY ASSESSED U/S 143(3) OF THE ACT. THE SAID ASSESSMEN T CONTAINED AN ADDITION OF ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 RS.29,17,20,219/- REPRESENTING SUPPRESSED PRODUCTIO N OF 16684.567 MT WHICH WAS ADDED TO THE RETURNED INCOME AS INCOME FR OM UNDISCLOSED SOURCES. THE AFORESAID ASSESSMENT WAS CHALLENGED BY THE ASSE SSEE IN APPEAL BEFORE THE CIT(A). 6. IN APPEAL BEFORE THE CIT(A), ASSESSEE RAISED VAR IOUS GROUNDS ASSAILING THE ASSESSMENT ORDER ON FACTS AND ALSO ON POINTS OF LAW. ONE OF THE POINTS OF LAW RAISED BY THE ASSESSEE WAS THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF THE ACT WAS VOID AB-INITIO AS THE ASSESSMENT WAS COMPLETED WITHOUT ISSUANCE OF THE MANDATORY NOTICE PRESCRIBED U/S 143(2) OF THE ACT. THE CIT(A) HAS ACCEPTED THE AFORESAID PLEA OF THE A SSESSEE AND HELD THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF TH E ACT WAS VOID AB-INITIO . 7. APART THEREFROM, THE CIT(A) ALLOWED PARTIAL RELI EF TO THE ASSESSEE WITH RESPECT TO THE QUANTUM ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION. WHILE THE CIT(A) IN-PRINCIPLE AGREED WITH THE ASSES SING OFFICER THAT THERE WAS A CASE OF SUPPRESSED PRODUCTION, HOWEVER, HE DISAGR EED WITH THE ASSESSING OFFICER ON THE QUANTUM OF INCOME ASSESSABLE ON THIS COUNT. THE CIT(A) HELD THAT THERE WAS SUPPRESSION OF SALE AND PROFITS AND THEREFORE THE BOOK RESULTS DECLARED BY THE ASSESSEE COULD NOT BE ACCEPTED. HE ESTIMATED THE UNDISCLOSED TURNOVER FOR THE RELEVANT PERIOD AND HE LD THAT GROSS PROFIT ON SUCH SUPPRESSED PRODUCTION SOLD @ 4% BE TAXED AS UNDISCL OSED INCOME. THIS RESULTED IN PARTIAL RELIEF TO THE ASSESSEE. 8. AGAINST SUCH AN ORDER OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US CHALLENGING THE ORDER OF THE CIT(A) ON THE AFORESTA TED GROUNDS OF APPEAL. FIRSTLY, BY WAY OF GROUND OF APPEAL NOS.1 AND 2, RE VENUE HAS CHALLENGED THE DECISION OF THE CIT(A) IN HOLDING THE ASSESSMENT OR DER AS VOID AB-INITIO . FURTHER BY WAY OF GROUND OF APPEAL NOS.3 TO 5, REVE NUE CHALLENGED THE ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 ACTION OF THE CIT(A) IN ALLOWING THE PARTIAL RELIEF TO THE ASSESSEE WITH RESPECT TO THE UNDISCLOSED INCOME ASSESSABLE ON ACCOUNT OF SUP PRESSED PRODUCTION. 9. IN ITS CROSS-OBJECTION, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1) THE LEARNED CIT(A) HAS RIGHTLY QUASHED REASSESS MENT ORDER FOLLOWING HON APEX COURT & BOMBAY HIGH COURT DECISIONS FOR RE ASON OF NON ISSUANCE OF NOTICE U/S 143(2) CONSIDERING SPECIFIC OBJECTION TA KEN BY ASSESSEE U/S 292BB OF IT ACT. HENCE CROSS OBJECTOR PRAYS THE SAM E MAY PLEASE BE CONFIRMED. 2) THE LEARNED CIT(A), AURANGABAD ERRED IN UPHOLDIN G VALIDITY OF REOPENING OF ASSESSMENT AND NOTICE ISSUED U/S 148 O F INCOME TAX ACT. IT MAY PLEASE BE HELD THAT NOTICE ISSUED U/S 148 IS BA D IN LAW AND THE SAME MAY PLEASE BE QUASHED. 3) WITHOUT PREJUDICE TO ABOVE GROUND, THE LEARNED A SSESSING OFFICER WAS NOT JUSTIFIED IN PASSING THE ASSESSMENT ORDER U/S 1 47 ON 30/12/2010 WHEN ORDER ON OBJECTIONS ON ISSUANCE OF NOTICE U/S 147 W AS SERVED ITSELF ON 30/12/2010. CROSS OBJECTOR PRAYS THAT SUCH ASSESSME NT ORDER MAY PLEASE BE CANCELLED AS BAD IN LAW ON THIS COUNT. 4) WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LOWER AU THORITIES WERE NOT JUSTIFIED IN REJECTING BOOKS U/S 145(1) OF INCOME T AX ACT AND IT IS PRAYED THAT PROFIT ARRIVED FROM AUDITED BOOKS OF ACCOUNTS MAY P LEASE BE ACCEPTED. 5) WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(A) ERRED IN UPHOLDING ALLEGED SUPPRESSED SALES ESTIMATED ON BAS IS OF ELECTRICITY CONSUMPTION AND ALSO ERRED IN UPHOLDING ADDITION OF 4% GROSS PROFIT ON SUCH ALLEGED SUPPRESSED SALES AND CROSS OBJECTOR PRAYS T HAT SAME MAY PLEASE BE DELETED/APPROPRIATE RELIEF MAY PLEASE BE GRANTED. 6) WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION ON ACCOUNT OF ALLEGED INITIAL U NDISCLOSED INVESTMENT FOR ALLEGED UNDISCLOSED SALES AND THE SAME MAY PLEASE B E DELETED. 7) CROSS OBJECTOR PRAYS FOR JUST AND EQUITABLE RELI EF. 10. THE GROUND OF APPEAL NO.1 RAISED IN THE CROSS-O BJECTION IS IN SUPPORT OF THE DECISION OF THE CIT(A) IN HOLDING THE ASSESS MENT ORDER AS VOID AB-INITIO FOR THE REASON OF NON-ISSUANCE OF THE MANDATORY NOT ICE U/S 143(2) OF THE ACT. 11. IN VIEW OF THE AFORESAID DISCUSSION, IT IS EVID ENT THAT THE DECISION OF THE CIT(A) IN TREATING THE ASSESSMENT ORDER AS VOID AB-INITIO FOR NON-ISSUANCE OF THE MANDATORY NOTICE U/S 143(2) IS AN ISSUE WHICH G OES TO THE ROOT OF THE ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 MATTER. WE SAY SO FOR THE REASON THAT THE AFORESAI D DECISION OF THE CIT(A) RENDERS THE IMPUGNED ASSESSMENT ORDER PASSED U/S 14 3(3) R.W.S. 147 OF THE ACT AS BAD IN LAW, BEING VOID AB-INITIO . THEREFORE, RIVAL COUNSELS WERE HEARD ON THIS LIMITED ASPECT AND THE APPEALS ARE BEING DI SPOSED-OFF BY ADVERTING TO THE AFORESAID PRELIMINARILY ISSUE. 12. BRIEF FACTS, WHICH ARE NECESSARY TO ADJUDICATE THE AFORESAID DISPUTE CAN BE UNDERSTOOD AS FOLLOWS. THE PLEA SET-UP BY THE A SSESSEE BEFORE THE CIT(A) WAS THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED BEFORE COMPLETION OF ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT. ASSES SEE ALSO POINTED OUT THAT AN OBJECTION U/S 292BB OF THE ACT WAS ALSO RAISED B Y THE ASSESSEE BEFORE COMPLETION OF ASSESSMENT VIDE COMMUNICATION DATED 2 0.12.2010 FILED ON 23.10.2010. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON THIS ASPECT, WHICH WAS FURNISHED BY THE ASSESSIN G OFFICER. THE ASSESSEE ALSO FURNISHED ITS RESPONSE TO THE REMAND REPORT SU BMITTED BY THE ASSESSING OFFICER. THE CIT(A) AFTER CONSIDERING THE RIVAL ST ANDS AS WELL AS THE FACT- SITUATION HELD THAT THE ASSESSING OFFICER DID NOT I SSUE ANY NOTICE U/S 143(2) OF THE ACT WHILE THE ASSESSING THE INCOME OF THE ASSES SEE U/S 143(3) R.W.S. 147 OF THE ACT. AS PER THE CIT(A), NON-ISSUANCE OF NOT ICE U/S 143(2) OF THE ACT BEFORE COMPLETION OF ASSESSMENT WAS UNTENABLE IN LA W. IN COMING TO SUCH CONCLUSION, THE CIT(A) RELIED UPON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CWT VS. HUF OF HH JM SCINDIA, (2008) 300 ITR 193 (BOMBAY). APART FROM THE AFORESAID JUDGEMENT OF TH E HONBLE BOMBAY HIGH COURT, HE HAS ALSO REFERRED TO THE FOLLOWING DECISI ONS :- (I) CIT VS. MUNDRA NANAVATI (BOMBAY HIGH COURT), 22 7 CTR 387 (BOM); (II) CIT VS. PAWAN GUPTA, 304 ITR 177 (DEL.); (III) CIT VS. VIRENDRA KUMAR AGARWAL, INCOME TAX AP PEAL NO.2429 OF 2009 DATED 07.01.2010; ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 (IV) CIT VS. MR. SALMAN KHAN, ITXA NO.508 OF 2011 D ATED 06.06.2011 (BOM); AND, (V) UKT SOFTWARE TECHNOLOGIES VS. ITO, ITA NO.5293 & 5294/DEL/2010 DATED 11.02.2011. 13. AS PER THE CIT(A), IT WAS MANDATORY TO ISSUE NO TICE U/S 143(2) OF THE ACT EVEN IN CASES WHERE THE RE-ASSESSMENT HAS BEEN MADE U/S 143(3) R.W.S. 147 OF THE ACT AND IN THE ABSENCE OF SUCH A NOTICE HAVING BEEN ISSUED, HE HAS HELD THE IMPUGNED ASSESSMENT AS BAD IN LAW AND VOID AB-INITIO . 14. AGAINST THE AFORESAID, THE LD. DEPARTMENTAL REP RESENTATIVE APPEARING FOR THE REVENUE REFERRED TO THE GROUNDS OF APPEAL N O.1 AND 2 IN SUPPORT OF THE CASE OF THE REVENUE. FIRSTLY, IT IS CANVASSED THAT AS PER THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MADHYA BHARAT ENERGY CORPORATION LTD. (SUPRA), A NOTICE U/S 143(2) OF TH E ACT IS NOT REQUIRED TO BE ISSUED IN CASES WHERE THE ASSESSMENT IS COMPLETED I N RESPONSE TO NOTICE U/S 148 OF THE ACT. SECONDLY, IT IS CONTENDED THAT EVE N IF THE PROPOSITION RELIED UPON BY THE CIT(A) IS ACCEPTED, IN THE PRESENT CASE IT COULD NOT BE APPLIED SINCE THE ASSESSEE HAD NOT FILED ANY RETURN OF INCO ME IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. AS PER THE LD. CIT-DR, NOTICE U/S 143(2) OF THE ACT COULD HAVE BEEN ISSUED ONLY IF THE ASSESSEE HAD FUR NISHED A RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. 15. ON THE OTHER HAND, THE LD. REPRESENTATIVE FOR T HE RESPONDENT-ASSESSEE HAS VEHEMENTLY POINTED OUT THAT THE AFORESAID ASPEC TS HAVE BEEN DULY CONSIDERED BY THE CIT(A) INASMUCH AS HE HAS FOLLOWE D THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HH JM SCINDIA (SUPRA) TO CONCLUDE THAT THE REQUIREMENT OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT CANNOT BE DISPENSED WITH EVEN WHERE THE ASSESSMENT IS MADE U/S 148 OF THE ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 ACT. FURTHER, WITH REGARD TO THE OBJECTION RAISED BY THE REVENUE BY WAY OF GROUND OF APPEAL NO.2 ABOVE, IT IS CONTENDED THAT I N RESPONSE TO THE NOTICE U/S 148 OF THE ACT, ASSESSEE HAD COMMUNICATED TO TH E ASSESSING OFFICER ON 28.02.2010 THAT THE RETURN OF INCOME ORIGINALLY FIL ED MAY BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. IT WAS THEREFORE CONTENDED THAT THE AFORESAID WOULD AMOUNT TO FURNISHING OF A RETURN OF INCOME IN RESPONSE TO A NOTICE U/S 148 OF THE ACT AND THAT TH E SAID PROPOSITION WAS ACCEPTED BY THE CIT(A) BY RELYING UPON THE JUDGEMEN T OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF TIVARI KANHAILA L VS. CIT, 154 ITR 109 (RAJ.). 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. FACTUALLY SPEAKING, IN THE PRESENT CASE A NOTICE U/S 148 OF T HE ACT WAS ISSUED BY THE ASSESSING OFFICER ON 30.03.2010 REQUIRING THE ASSES SEE TO FILE A RETURN IN PURSUANCE TO SAID NOTICE. IT EMERGES FROM THE RECO RD THAT IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT, ASSESSEE FURNISHED A COM MUNICATION DATED 05.08.2010 TO THE ASSESSING OFFICER STATING THAT TH E RETURN OF INCOME ORIGINALLY FILED BY IT U/S 139 OF THE ACT SHOULD BE TREATED AS THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THIS ASPECT OF THE MATTER HAS BEEN NOTED BY THE ASSESSING OFFICER ALSO IN PARA 1.4 OF THE IMPUGNED ASSESSMENT ORDER. 17. THE CONTROVERSY BEFORE US IS AS TO WHETHER ISSU ANCE OF NOTICE U/S 143(2) OF THE ACT IS MANDATORY IN ORDER TO COMPLETE THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT. QUITE CLEARLY, THE AFORESAI D CONTROVERSY IS NO LONGER RES- INTEGRA INASMUCH AS THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF HH JM SCINDIA (SUPRA) AS WELL AS IN THE CAS E OF ACIT VS. GENO PHARMACEUTICALS LTD., 214 TAXMANN.COM 83 HELD THAT NOTICE U/S 143(2) OF THE ACT IS MANDATORY AND IN THE ABSENCE OF SUCH SERVICE , THE ASSESSING OFFICER CANNOT PROCEED TO COMPLETE THE ASSESSMENT EVEN IN A CASE WHERE THE ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 ASSESSMENT HAS BEEN REOPENED BY ISSUANCE OF NOTICE U/S 147/148. NOTABLY, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HH JM SCINDIA (SUPRA) NOTICED THAT SIMILAR VIEW WAS ADOPTED BY OTHER TWO HIGH COU RTS, NAMELY, MADRAS AND GUAHATI. THE FOLLOWING DISCUSSION IN THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HH JM SCINDIA (SUPRA) IS WORTHY OF NOTICE :- LET US NOW EXAMINE SECTION 143 AND 148 OF THE PROV ISIONS OF THE INCOME TAX ACT, WHERE SIMILAR LANGUAGE HAD BEEN EMPLOYED. UNDE R SECTION 143(2)(II) THERE IS A LIMITATION ON THE A.O. NOT TO ISSUE NOTI CE IF THE PERIOD OF TWELVE MONTHS HAD EXPIRED. SECTION 148 OF THE IT. ACT HAD COME UP FOR CONSIDERATION BEFORE SEVERAL HIGH COURTS. A LEARNED BENCH OF THE MADRAS HIGH COURT IN PAGE 1113 COMMISSIONER OF INCOME TAX VS. M. CHELLAP PAN AND ANR HAD OCCASION TO CONSIDER THE PROVISION. THE ASSESSING O FFICER PROCEEDED TO REASONS UNDER SECTION 147 OF THE I.T. ACT AND COMPL ETED THE ASSESSMENT WITHOUT ISSUING NOTICE UNDER SECTION 143(2) WITHIN THE TIME STIPULATED. THE ORDER WAS CONFIRMED IN APPEAL. THE TRIBUNAL HAD SET ASIDE THE ORDER ON THE GROUND THAT NOTICE UNDER SECTION 143(2) WAS NOT SER VED ON THE ASSESSEE WITHIN THE STIPULATED PERIOD. THE LEARNED BENCH OF THE MADRAS HIGH COURT HELD THAT AS THE NOTICE UNDER SECTION 143(2) WAS NOT SER VED WITHIN THE STIPULATED PERIOD, THE PROCEDURE UNDER SECTION 143 CAME TO AN END AND THE MATTER ATTAINED FINALITY. SIMILARLY IS THE JUDGEMENT OF GA UHATI HIGH COURT IN SMT. BANDANA GOGAI VS. COMMISSIONER OF INCOME TAX AND AN R. WHICH ALSO DEALT WITH AN ISSUE OF REASSESSMENT UNDER SECTION 147. TH AT WAS A CASE OF BLOCK ASSESSMENT. IT WAS FOUND THAT NOTICE UNDER SECTION 143(2) WAS NOT ISSUED. THE LEARNED BENCH CAME TO THE CONCLUSION THAT REQUI REMENT OF SECTION 143(2) CANNOT BE DISPENSED WITH AS IT IS MANDATORY. PARLIA MENT SUBSEQUENTLY BY FINANCE ACT, 2006, WITH EFFECT FROM 1.10.1991 INTRO DUCED THE SECOND PROVISO TO SECTION 148 SAVING PROCEEDINGS WHERE RETURN HAD BEEN FILED PURSUANT TO PROCEEDINGS UNDER SECTION 147 AND NO NOTICE HAD BEE N SERVED UNDER SECTION 143(2) WITHIN THE PERIOD PRESCRIBED BY THE PROVISO TO SECTION 143(2). THE LANGUAGE USED IN SECTION 143(2) IS SIMILAR TO T HE LANGUAGE USED IN SECTION 16(2). PARLIAMENT IN THE CASE OFL.T. ACT UNDER SECTION 148 NOTING, THE OMISSION IN THE SECTION WHICH WAS LIKEL Y TO AFFECT ASSESSMENTS DONE, PURSUANT TO POWERS CONFERRED UNDE R SECTION 147, INSERTED THE PROVISO TO SECTION 148 TO PROTECT THE ASSESSMENTS ALREADY DONE. IT IS TRUE THAT MERELY BECAUSE PARLIAMENT HAS AS A MATTER OF ABUNDANT CAUTION INTERVENED AND AMENDED THE PROVISI ONS OF SECTION 148 CANNOT BE READ TO MEAN THAT THERE IS A LACUNAE. TWO HIGH COURTS, MADRAS AND GAUHATI, HAVE TAKEN A VIEW THAT NOTICE UNDER SECTION 143(2) IS MANDATORY EVEN IN A CASE OF RE-OP ENING OF ASSESSMENT UNDER SECTION 148 OF THE I.T. ACT. IN OUR OPINION, THE VIEW TAKEN BY THE TWO HIGH COURTS REFLECTS THE LANG UAGE OF SECTION 147. THEREFORE, EVEN IN A CASE OF RE-OPENING OF ASSESSME NT UNDER SECTION 147, THE A.O. IS BOUND TO COMPLY WITH THE R EQUIREMENT OF SECTION 143(2) OF THE I.T. ACT.' [UNDERLINED FOR EMPHASIS BY US] ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 18. BEFORE US, THE LD. CIT-DR HAS RELIED UPON THE J UDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MADHYA BHARAT ENERG Y CORPORATION LTD. (SUPRA). WE HAVE CAREFULLY PERUSED THE SAID DECISI ON AND FIND THAT AS PER THE HONBLE DELHI HIGH COURT, SECTION 148 OF THE ACT DO ES NOT SPECIFICALLY PROVIDE AN ASSESSMENT MADE IN RESPONSE TO NOTICE U/S 148 OF THE ACT SHOULD BE AFTER ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. OSTENSIB LY, THE AFORESAID VIEW EXPRESSED BY THE HONBLE DELHI HIGH COURT IS CONTRA RY TO THAT EXPRESSED BY THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY, BUT JU DICIAL DISCIPLINE IMPLIES THAT THE VIEW OF THE HONBLE BOMBAY HIGH COURT IS BINDIN G ON US, BEING THE JURISDICTIONAL HIGH COURT. THUS, IN OUR VIEW, CIT( A) DID NOT MAKE ANY MISTAKE IN UPHOLDING THE PROPOSITION THAT EVEN IN CASES WHE RE THE RE-ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUANCE OF NOTI CE U/S 147/148 OF THE ACT, IT IS MANDATORY TO COMPLY WITH THE REQUIREMENTS OF SECTION 143(2) OF THE ACT. 19. ANOTHER CASE SETUP BY THE REVENUE BEFORE US IS THAT IN THE PRESENT CASE ASSESSEE DID NOT FILE A RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT AND THEREFORE THERE WAS NO REQUIREMENT OF ISSUING N OTICE U/S 143(2) OF THE ACT BEFORE MAKING ASSESSMENT. IN THIS CONTEXT, THE FAC TUAL POSITION HAS ALREADY BEEN NOTED BY US IN THE EARLIER PARA, BASED ON THE OBSERVATION OF THE ASSESSING OFFICER IN PARA 1.4 OF THE ASSESSMENT ORD ER. NO DOUBT, NOTICE ISSUED U/S 148 OF THE ACT REQUIRES THE ASSESSEE TO FILE A RETURN OF INCOME. IN THE PRESENT CASE, THE ASSESSEE HAD ORIGINALLY FILED A RETURN OF INCOME U/S 139(1) OF THE ACT ON 24.10.2005. IN RESPONSE TO TH E NOTICE ISSUED U/S 148, ASSESSEE INFORMED THE ASSESSING OFFICER THAT THE RE TURN FILED BY HIM ORIGINALLY U/S 139 OF THE ACT SHOULD BE TREATED AS THE RETURN FOR THE PURPOSE OF THE ASSESSMENT U/S 148 OF THE ACT. IN THE AFORESAID EV ENT, IN OUR VIEW, THE EARLIER RETURN FILED BY THE ASSESSEE SHALL BE TREATED AS A RETURN FURNISHED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE AFORESAID PR OPOSITION HAS BEEN UPHELD BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF TIV ARI KANHAILAL (SUPRA). ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 HAVING REGARD TO THE AFORESAID, IN OUR CONSIDERED O PINION, THE INTIMATION OF THE ASSESSEE FURNISHED ON 28.05.2010 THAT THE ORIGINAL RETURN FILED U/S 139 OF THE ACT MAY BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT SHALL BE CONSTRUED AS ASSESSEE HAVING FILED A RETURN IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. BECAUSE THE EARL IER RETURN FILED IS LIABLE TO BE TREATED AS THE FRESH RETURN SUBMITTED IN RESPONSE T O THE NOTICE ISSUED U/S 148 OF THE ACT. THEREFORE, IT WOULD BE WRONG ON THE PA RT OF THE REVENUE TO SAY THAT THERE IS NO RETURN FILED BY THE ASSESSEE IN RESPONS E TO THE NOTICE U/S 148 OF THE ACT. THUS, THE GROUND OF APPEAL NO.2 RAISED BY THE REVENUE IS ALSO NOT JUSTIFIED. 20. IN VIEW OF THE AFORESAID DISCUSSION, IN OUR CON SIDERED OPINION, THE CIT(A) MADE NO MISTAKE IN FOLLOWING THE JUDGEMENT O F THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HH JM SCINDIA (SUPRA) AND HOLDING THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF TH E ACT WAS VOID AB-INITIO INASMUCH AS THE RE-ASSESSMENT WAS COMPLETED WITHOUT COMPLYING WITH THE REQUIREMENTS OF SECTION 143(2) OF THE ACT. THE ORD ER OF THE CIT(A) IS HEREBY AFFIRMED. 21. BEFORE PARTING, WE MAY ALSO REFER TO A FACT-SIT UATION WHICH IS UNCONTROVERTED. THE CIT(A) FOUND THAT ASSESSEE HAD RAISED AN OBJECTION VIDE LETTER DATED 20.12.2010 BEFORE THE ASSESSING OFFICE R IN RESPECT OF NON- ISSUANCE OF NOTICE U/S 143(2) OF THE ACT BEFORE COM PLETION OF ASSESSMENT ON 30.12.2010. THE AFORESAID FINDING OF THE CIT(A), W HICH IS NOT CONTROVERTED BY THE REVENUE BEFORE US, SUPPORTS THE OTHER CONCLUSIO N OF THE CIT(A) THAT ASSESSEE HAS COMPLIED WITH THE REQUIREMENTS OF SECT ION 292BB READ WITH THE PROVISO THEREOF. ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 22. IN VIEW OF THE AFORESAID DISCUSSION, WE AFFIRM THE ORDER OF THE CIT(A) HOLDING THE ASSESSMENT ORDER PASSED U/S 143(3) R.W. S. 147 OF THE ACT AS VOID AB-INITIO . AS A CONSEQUENCE, THE IMPUGNED ASSESSMENT ORDER DOES NOT SURVIVE AND IS QUASHED. 23. AS A CONSEQUENCE OF THE AFORESAID DECISION IN R ELATION TO GROUND OF APPEAL NOS.1 AND 2 RAISED BY THE REVENUE, THE DISPU TE RAISED IN GROUND OF APPEAL NOS.3 TO 5 RELATING TO THE ADDITIONS MADE IN THE ASSESSMENT IS RENDERED ACADEMIC. THE CIT(A) HAD ALLOWED PARTIAL RELIEF TO THE ASSESSEE WITH RESPECT TO THE QUANTUM OF ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION WHICH IS CHALLENGED BY THE REVENUE BY WAY OF GROUND OF APPEAL NOS.3 TO 5. IN THE CROSS-OBJECTION FILED, ASSESSEE HAS ALSO CHA LLENGED THE DECISION OF THE CIT(A) IN PARTLY SUSTAINING THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION. THE ASSESSEE HAS ALSO CHALLENGED THE ORDER OF THE C IT(A) ON VARIOUS OTHER ASPECTS RELATING TO THE VALIDITY OF REOPENING OF AS SESSMENT U/S 148 OF THE ACT. ALL THESE ASPECTS ARE RENDERED ACADEMIC IN VIEW OF OUR DECISION TO AFFIRM THE ORDER OF THE CIT(A) HOLDING THE ASSESSMENT ORDER AS VOID AB-INITIO ON ACCOUNT OF NON-COMPLIANCE WITH THE REQUIREMENTS OF SECTION 143(2) OF THE ACT. THEREFORE, THE SAID ISSUES ARE NOT BEING ADJUDICATE D FOR THE PRESENT AND ARE KEPT OPEN IN CASE OUR DECISION ON GROUND OF APPEAL NOS.1 AND 2 IN THE APPEAL OF THE REVENUE IS ALTERED BY ANY HIGHER AUTHORITY. 24. THUS, FOR ASSESSMENT YEAR 2005-06, WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED, THE CROSS-OBJECTION OF THE AS SESSEE IS ALSO DISMISSED. 25. IN SO FAR AS THE APPEALS OF THE REVENUE FOR ASS ESSMENT YEARS 2006-07 TO 2008-09 AND THE RESPECTIVE CROSS-OBJECTIONS OF T HE ASSESSEE ARE CONCERNED, THE ISSUES RAISED THEREIN ARE PARI-MATER IA TO THOSE CONSIDERED BY US IN THE EARLIER PARAS IN RELATION TO ASSESSMENT Y EAR 2005-06. IT WAS A ITA NOS.649 TO 652/PN/2012 C.O. NOS.19 TO 22/PN/2013 COMMON GROUND BETWEEN THE PARTIES THAT THE DECISION IN THE ASSESSMENT YEAR 2005-06 SHALL APPLY MUTATIS-MUTANDIS IN THE OTHER ASSESSMENT YEARS ALSO. THEREFORE, THE APPEALS OF THE REVENUE AND THE CROSS -OBJECTIONS OF THE ASSESSEE FOR ASSESSMENT YEARS 2006-07 TO 2008-09 AR E ALSO ACCORDINGLY DISMISSED. 26. IN THE RESULT, THE CAPTIONED APPEALS OF THE REV ENUE AND RESPECTIVE CROSS-OBJECTIONS BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 31 ST MARCH, 2015. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 31 ST MARCH, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE