M/s Punjab Plywood Industries, Yamunanagar V. Deputy Commissioner of Income Tax, Chandigarh

ITA 692/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2721 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Keywords: Invalid notice; Assessment record
• Section: 143(3); 142(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.692/CHD/2017 (ASSESSMENT YEAR : 2010-11) M/S PUNJAB PLYWOOD INDUSTRIES, VS. THE D.C.I.T., KHAJURI ROAD, CENTRAL CIRCLE-2, YAMUNA NAGAR. CHANDIGARH. PAN: AAAFP9142Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOYAL, CA RESPONDENT BY : MS.GEETINDER MANN, SR.DR DATE OF HEARING : 31.07.2018 DATE OF PRONOUNCEMENT : 09.08.2018 ORDER PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-3, GURGAON DATED 3.2.2017 RELATING TO ASSESSMENT YEAR 2010- 11. 2. BRIEF FACTS RELATING TO THE CASE ARE THAT THE AS SESSEE HAD E-FILED RETURN OF INCOME SHOWING TOTAL INCOME O F RS.20,49,960/-. THEREAFTER THE CASE WAS SELECTED FO R SCRUTINY BY THE DCIT, CIRCLE YAMUNA NAGAR WHO ISSUE D STATUTORY NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). NO COMPLIANCE WAS MADE TO THE SAM E. THEREFORE, ANOTHER NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPONSE TO THE SAME, THE ASSESSEE INTIMATED THAT HIS JURISDICTION LIED WITH THE ACIT, CENTRAL C IRCLE-II, CHANDIGARH. ACCORDINGLY, ASSESSMENT RECORDS FOR THE ITA NO.692/CHD/2017 A.Y.2010-11 2 IMPUGNED YEAR WERE TRANSFERRED TO ACIT, CENTRAL CIR CLE-II, CHANDIGARH. NOTICE U/S 142(1) WAS ISSUED BY THE ACI T, CENTRAL CIRCLE-II, CHANDIGARH. THE ASSESSEE OBJECTE D TO THE ASSUMPTION OF JURISDICTION BY THE CONCERNED ASSESSI NG OFFICER STATING THAT NO NOTICE U/S 143(2) OF THE AC T HAD BEEN ISSUED BY HIM FOR ASSUMING JURISDICTION TO FRAME TH E ASSESSMENT. THE ASSESSING OFFICER DISPOSED ALL THE OBJECTIONS OF THE ASSESSEE AND THEREAFTER IN THE AB SENCE OF ANY RESPONSE FROM THE ASSESSEE ON THE MERITS OF THE CASE ASSESSED THE INCOME OF THE ASSESSEE BY APPLYING A N ET PROFIT RATE OF 3% TO ITS TOTAL TURNOVER OF RS.12,75,81,375 /- THUS ASSESSING ITS INCOME AT RS.38,27,441/-. 3. AGGRIEVED BY THE SAME, THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT(APPEALS) WHERE THE ASSESSEE CHALLENG ED THE LEGALITY OF THE NOTICE ISSUED U/S 143(2) OF THE ACT AND ALSO MERITS OF THE CASE. AL THE GROUNDS RAISED BY THE AS SESSEE WERE DISMISSED BY THE CIT(APPEALS). 4. AGAINST THE AFORESAID ORDER OF THE CIT(APPEALS) THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING TH E FOLLOWING GROUNDS: 1. THE LEARNED CIT (A) HAS ERRED IN LAW AND FACTS I N CONFIRMING THE ACTION OF DCIT CENTRAL CIRCLE -2 CHANDIGARH WHO HAS COMPLETED THE ASSESSMENT WITHOUT SERVICE OF A VALID NOTICE ISSUED U/S 143(2) O N OR BEFORE 30.9.2011. 2. THE LEARNED CIT (A) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ACTION OF DCIT CENTRAL CIRCLE -2 CHANDIGARH WHO HAS COMPLETED THE ASSESSMENT WITHOUT ANY JURISDICTION. ITA NO.692/CHD/2017 A.Y.2010-11 3 3. THAT THE LEARNED CIT (A) HAS ERRED IN LAW AND FA CTS IN CONFIRMING AN ADDITION OF RS.21,52,369/- BY APPLICATION OF NET PROFIT RATE OF 3% ON THE TURNOVER. 4. THAT THE LEARNED CIT (A) HAS ERRED IN LAW AND FAC TS IN CONFIRMING THE ACTION OF AO WHILE COMPLETING THE ASSESSMENT U/S 144. 5. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR TO SUBSTITUTE THE ABOVE GROUNDS OF APPEAL EITHER BEFOR E OR AT THE TIME OF HEARING OF CASE. 5. THE LD. COUNSEL FOR ASSESSEE FIRST TOOK UP THE O BJECTION RELATING TO THE JURISDICTION AND VALIDITY OF NOTICE ISSUED U/S 143(2) OF THE ACT RAISED IN GROUND NO.1 & 2 BEFORE US. 6. LD.COUNSEL FOR THE ASSESSEE STATED THAT NO NOTIC E U/S 143(2) HAD BEEN ISSUED BY THE ASSESSING OFFICER OF THE ASSESSEE AND THE SAME BEING MANDATORY FOR FRAMING ASSESSMENT U/S 143(3) OF THE ACT, THE PRESENT ASSES SMENT FRAMED WAS NULL AND VOID. LD.COUNSEL FOR THE ASSESS EE POINTED OUT THAT WHILE ASSESSMENT HAS BEEN FRAMED B Y DCIT, CENTRAL CIRCLE 2, CHANDIGARH ,NOTICES UNDER SECTION 143(2) HAD BEEN ISSUED ON 27.09.2011 & 10.07.2012, BY THE DCIT, YAMUNANAGAR. LD.COUNSEL FOR THE ASSESSEE POINTED OU T THAT ORIGINALLY THE JURISDICTION LAY WITH DCIT, YAMUNAN AGAR BUT SUBSEQUENT TO SEARCH CONDUCTED ON THE ASSESSEE ON 20.02.2007, THE CASE WAS TRANSFERRED TO DCIT, CENT RAL CIRCLE 2, CHANDIGARH WHO HAD COMPLETED ALL SEARCH ASSESSMENTS. THE LD. COUNSEL FOR ASSESSEE ARGUED TH AT THE ACIT, YAMUNANGAR CEASED TO HAVE JURISDICTION FROM T HE DATE ON WHICH THE ORDER WAS PASSED TRANSFERRING JURISDIC TION TO DCIT ,CENTRAL CIRCLE, 2 CHANDIGARH AND THEREFORE TH E NOTICES ITA NO.692/CHD/2017 A.Y.2010-11 4 ISSUED BY HIM U/S 143(2) WERE WITHOUT JURISDICTION AND THUS INVALID NOTICES. 7. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT IN IDENTICAL SET OF FACTS, THE I.T.A.T. IN THE CASE OF AGGARWAL WOOD INDUSTRIES VS. DCIT IN ITA NO.691/CHD/2017 VID E ITS ORDER DATED 24.1.2018, HAD HELD THE ASSESSMENT FRAM ED TO BE INVALID AND VOID AB INITIO. OUR ATTENTION WAS D RAWN TO THE FACTS OF THE SAID CASE TO DEMONSTRATE THE IDENT ITY OF FACTS WITH THE CASE OF THE ASSESSEE, AT PARA 6 AND 7 OF T HE ORDER AS UNDER: 6. BEFORE US THE LD. AR BROUGHT TO OUR NOTICE THAT A SEARCH WAS CONDUCTED ON 20/02/2017AND AS A CONSEQUENCE OF SEARCH THE CASE WAS TRANSFERRED FROM DCIT, YAMUNANAG AR TO DCIT, CHANDIGARH ON 27/05/2008 HOWEVER THE DCIT, YAMUNANAGAR HAS ISSUDED A NOTICE UNDER SECTION 143(2) ON 27/09/2011 WHICH IS A INVALID NOTICE BEYOND JURISDI CTION. AGAIN THE STATUTORY NOTICE WERE ISSUED ON 10/07/201 2 BY THE ACIT, YAMUNANAGAR. NOTICE UNDER SECTION 142(1) WERE ISSUED BY THE ACIT CENTRAL CIRCLE CHANDIGARH ON 14/12/12. 7. THE LD. AR ARGUED THAT THE ACIT, YAMUNANGAR CEASED TO HAVE JURISDICTION WITH EFFECT FROM 27/05/2008 TH E DATE ON WHICH THE ORDER UNDER SECTION 147 HAS BEE PASSED. 8. OUR ATTENTION WAS ALSO DRAWN TO THE FINDINGS OF THE I.T.A.T. AS UNDER: KEEPING IN VIEW THE FACTS ABOVE THE FOLLOWING FACTS EME RGED: 1. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) FOR THE AY 2010-11 WAS 30/09/2011 BEFORE THE DUE DATE FO R ISSUE OF NOTICE NO NOTICE UNDER SECTION 143(2) WAS I SSUED BY THE OFFICIALS HAVING JURISDICTION OR THE CASE BUT A NOTICE WAS ISSUED BY THE ACIT, CIRCLE YAMUNANAGAR ON 27/09/2011 WHO NO MORE HAVING THE JURISDICTION ON THE ASSESSEE WHI CH MAKES IT NOTICE ISSUED WITHOUT JURISDICTION IS INVALID NOTICE . 2. AT THE SAME TIME WE FIND THAT NO NOTICE UNDER SECTIO N 143(2) HAS BEEN ISSUED BY THE DCIT, CENTRAL CIRCLE BEFO RE DUE DATE. HENCE THE IMPUGNED ASSESSMENT COMPLETED BY THE DCIT CENTRAL CIRCLE CHANDIGARH IS INVALID AND VOID HAVE ISSUED . ITA NO.692/CHD/2017 A.Y.2010-11 5 8. THE ARGUMENT OF THE LD. DR THAT THE OBJECTION HAS TO BE BROUGHT TO THE NOTICE WITHIN ONE MONTH FROM THE DAT E ON WHICH THE NOTICES HAS BEEN SERVED TO THE ASSESSEE DID NOT CARRY ANY WEIGHT AS THE JURISDICTION STANDS TRANSFERRED TO CHA NDIGARH IN 2008 AND THERE WAS NO 123 ORDER TO RETRANSFER THE CASE FROM CHANDIGARH TO YAMUNANAGAR. 9. IT WAS THEREFORE CONTENDED THAT THE ISSUE WAS SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID DECISION OF THE ITAT. 10. THE LD. DR FAIRLY CONCEDED THAT THE ISSUE OF V ALIDITY OF NOTICE ISSUED U/S 143(2) OF THE ACT WAS SQUARELY CO VERED BY THE ORDER OF THE I.T.A.T. IN THE CASE OF AGGARWAL W OOD INDUSTRIES (SUPRA). 11. IN VIEW OF THE ABOVE SINCE THE FACTS OF THE P RESENT CASE, VIS--VIS THE ISSUE OF VALIDITY OF NOTICE U/S 143(2) OF THE ACT, WE FIND, ARE IDENTICAL TO THAT IN THE CASE OF AGGARWAL WOOD INDUSTRIES (SUPRA) WHEREIN THE SAID NOTICE HAS NOT BEEN ISSUED BY THE JURISDICTIONAL ASSESSING OFFICER AND NOTHING HAVING BEEN BROUGHT BEFORE US BY THE REVENU E CONTROVERTING THE SAID FACT, THE DECISION RENDERED THEREIN WOULD APPLY SQUARELY TO THE PRESENT CASE ALSO, FO LLOWING WHICH WE HOLD THAT THE ASSESSMENT COMPLETED IS INVA LID AND VOID AB INITIO. GROUND OF APPEAL NO.1 & 2 RAISED BY THE ASSESSEE ARE THEREFORE ALLOWED. 12. SINCE WE HAVE HELD THE ASSESSMENT COMPLETED TO BE NULL & VOID, THE ADDITIONS MADE THEREIN DO NOT SURV IVE AND THEREFORE THE GROUNDS RAISED BY THE ASSESSEE ON THE MERITS OF THE CASE IN GROUND NO.3 & 4 ARE OF NO RELEVANCE. ITA NO.692/CHD/2017 A.Y.2010-11 6 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS, T HEREFORE, ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 9 TH AUGUST, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH