ACIT, Chandigarh V. M/s Josh Builders & Developers Pvt. Ltd., Zirakpur

ITA 751/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2523 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 26-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 27-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Assessment record
• Section: 27; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.751/CHD/2015 (ASSESSMENT YEAR : 2011-12) THE A.C.I.T., VS. M/S JOSH BUILDERS & CIRCLE 3(1), DEVELOPERS PVT. LTD., CHANDIGARH. SCO 26-227, F.F., ROYAL ESTATE, AMBALA-CHANDIGARH ROAD, ZIRAKPUR. PAN: AABCJ6126G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, DR RESPONDENT BY : SHRI AJAY JAIN DATE OF HEARING : 26.11.2015 DATE OF PRONOUNCEMENT : 06.01.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INC OME TAX (APPEALS-2), CHANDIGARH DATED 10.3.2015 FOR ASSESSMENT YEAR 2011-12. 2. BRIEFLY, THE FACTS OF THE CASE TO THE EXTENT RELEVANT FOR ADJUDICATING THE APPEAL ARE THAT THE A SSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSM ENT YEAR AS ON 30.3.2012. AS PER THE ASSESSING OFFICER, THE CASE 2 WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WA S ISSUED AS ON 28.9.2012 BY THE I.T.A., WARD 6(4), MOHALI AN D DULY SERVED ON THE ASSESSEE AS ON 29.9.2012. FURTHER ON TRANSFER OF CASE, A NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY ACIT, CIRCLE 3(1), CHANDIGARH AS ON 15.11.2013. THE ASSESSMENT WAS FINALIZED AT AN INC OME OF RS.1,00,00,000/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE AFTER SETTING OFF OF BROUGHT FORWARD LOSSE S. 3. BEFORE THE LEARNED CIT (APPEALS), THE ASSESSEE CONTENDED THAT IT HAD NOT RECEIVED ANY NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PRESCRIBED TIM E AFTER FILING OF RETURN UNDER SECTION 139 OF THE ACT I.E. 31.3.2013 AND BEFORE 30.9.2013, THEREFORE, THE ASSESSMENT IS BAD IN LAW. FURTHER, IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS MENTIONED TWO NOTICES UNDER SECTION 143(2) IN H IS ORDER, FIRST NOTICE HAS BEEN ISSUED ON 28.9.2012 W HICH IS BEFORE THE FILING OF RETURN AND SECOND NOTICE HAS BEEN ISSUED ON 15.11.2013 WHICH IS AFTER THE DUE DATE AS PROVIDED IN SECTION 143(2) OF THE ACT. THE LEARNED CIT (APPEALS), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND ON PERUSAL OF THE ASSESSMENT RECORD, H ELD AS UNDER : 4.1 AS PER PROVISO TO SECTION 143(2)(II), NOTICE U /S 143(2) CANNOT BE SERVED ON THE APPELLANT AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH 3 THE RETURN IS FURNISHED. THE APPELLANT HAS FURNISHE D ITS RETURN OF INCOME ON 30.03.2013 AND SO NOTICE U/S 14 3(2) COULD NOT HAVE BEEN ISSUED AFTER 30.09.2013. AS PER THE ASSESSMENT ORDER, THE FIRST NOTICE U/S 143(2) W AS ISSUED ON 27.11.2013, WHICH IS BEYOND SIX MONTHS. A PERUSAL OF THE ASSESSMENT RECORDS OF THE APPELLANT REVEALS THAT ONE NOTICE U/S 143(2) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS 'ACT) DATED 20.08.2013 WAS ISSUED BY THE ASSESSING OFFICER, BUT THERE IS NO EVID ENCE OF SERVICE OF THIS NOTICE. THERE IS NO MENTION ABOU T THIS NOTICE ON THE ORDER SHEET OR EVEN IN THE ASSESSMENT ORDER. THEREFORE, IT CANNOT BE SAID THAT THIS NOTIC E WAS SERVED ON THE APPELLANT. BE AS IT MAY, SINCE NOTICE U/S 143(2) WAS NOT SERVED WITHIN TIME PRESCRIBED IN PROVISO TO SECTION 143(2)(II), IT IS TO BE HELD THA T THE ASSESSMENT HAS BEEN FRAMED WITHOUT SERVING STATUTOR Y NOTICE U/S 143(2) UPON THE APPELLANT AND SO THE ASSESSMENT MADE AS A CONSEQUENCE OF THIS NOTICE IS NULL AND VOID. HENCE, THE ASSESSMENT MADE IS HEREBY ANNULLED. GROUND OF APPEAL NO. 3 IS ALLOWED. 4. AGGRIEVED BY THIS ORDER OF THE LEARNED CIT (APPEALS), THE DEPARTMENT HAS COME IN APPEAL, RAISI NG THE FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATIN G THE FACTS OF THE CASE. 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE FACT AND LEGAL POSITION THAT NOTICE ISSUED U/S 143(2) OF THE I.T. ACT AND SENT BY SPEED POST ON 22.08.2013 IS A VALID MODE OF SERVICE AND IS DEEMED TO 4 HAVE BEEN SERVED ON THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 282 OF THE I.T. ACT READ WITH SECTION 27 OF THE GENERAL CLAUSES ACT. 3. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN ANNULLING THE ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAD NOT CHALLENGED NON RECEIPT OF NOTICE DATED 22.08.2013 ISSUED OF 143(2) OF THE I.T. ACT DURING THE ASSESSMENT PROCEEDINGS AND THAT AFTER THE COMPLETION OF ASSESSMENT, THE ASSESSEE WAS PRECLUDED FROM RAISING ANY OBJECTION IN VIEW OF THE PROVISION OF SECTION 292BB OF THE I.T. ACT AS INTRODUCED W.E.F. 01.04.2008. 4. IT IS PRAYED THAT THE ORDER OF THE LD.CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLATE CRAVES TO ADD TO ALTER, OR AMEND A NY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 5. THE LEARNED D.R., BEFORE US STATED THAT THE FIR ST NOTICE DATED 28.9.2012 BEING ISSUED BEFORE THE DATE OF FILING OF RETURN MAY NOT BE A VALID NOTICE. HOWEV ER, THE NOTICE ISSUED BY THE ASSESSING OFFICER DATED 20.8.2 013 IS A VALID NOTICE, ISSUED WITHIN THE TIME PRESCRIBED U NDER THE ACT. A COPY OF THE SAID NOTICE WAS ANNEXED AT PAPE R BOOK PAGE 25, FILED BY THE DEPARTMENT. AS REGARDS THE S ERVICE OF THIS NOTICE, A COPY OF SPEED POST ENTRIES WAS FI LED BEFORE US, WHEREBY AT SERIAL NO.113-114, THE NAME OF THE ASSESSEE IS APPEARING UNDER THE SERVICE MADE AS ON 23.8.2013. A COPY OF DISPATCH REGISTER WAS ALSO S HOWN TO 5 US. FURTHER, IT WAS SUBMITTED THAT NOWHERE DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS RAISED ANY OBJECTION AS REGARDS NON-SERVICE OF NOTICE, THEREFO RE, HAVING PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CANNOT RAISE THIS ISSUE IN APPEAL, AS MAND ATED BY THE PROVISIONS OF SECTION 292BB OF THE ACT. IN THIS VIEW, IT WAS PRAYED TO HOLD THE ACTION OF THE LEARN ED CIT (APPEALS) TO BE BAD IN LAW. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED CIT (APPEALS ) THE CRUX OF HIS ARGUMENTS WAS THAT THE FIRST NOTICE AS REFERRED IN THE ASSESSMENT ORDER DATED 28.9.2012 IS NOT A VA LID NOTICE AS IT HAS BEEN ISSUED BEFORE THE FILING OF R ETURN , DATED 31.3.2013. THE SECOND NOTICE DATED 15.11.201 3 WAS ALSO BAD IN LAW AS THE SAME IS NOT ISSUED WITHIN TH E TIME PRESCRIBED UNDER THE ACT. WITH REGARD TO THE NOTIC E DATED 22.8.2013, AS MENTIONED IN THE CIT (APPEALS)S ORDE R, IT WAS SUBMITTED THAT THERE IS NO MENTION OF THE SAID NOTICE IN THE ORDER SHEET AS WELL AS IN THE ASSESSING OFFI CERS ORDER. EVEN IF IT IS CONSIDERED TO BE ISSUED, IT W AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE T HAT THE SAID NOTICE WAS NEVER SERVED TO THE ASSESSEE. SINC E NO VALID NOTICE UNDER SECTION 143(2) OF THE ACT WAS SE RVED ON THE ASSESSEE, IT WAS PRAYED THAT THE ACTION OF THE LEARNED CIT (APPEALS) IN ANNULLING THE ASSESSMENT BE TREATE D AS PER LAW. RELIANCE WAS PLACED ON THE JUDGMENT OF DELHI 6 HIGH COURT IN THE CASE OF DIT VS. SOCIETY FOR WORL DWIDE INTERBANK FINANCIAL TELECOMMUNICATION (2010) 323 IT R 249, GUJARAT HIGH COURT IN THE CASE OF CIT VS. PAN ORAMA BUILDERS PVT. LTD., TAX APPEAL NO.435 OF 2011, DATE D 30.8.2012 AND DELHI BENCH OF THE I.T.A.T. IN THE CA SE OF SHREE ASHTA VINAYAK TRADERS PVT. LTD. VS. ITO, ITA NO.1069/DEL/2013 DATED 18.2.2015. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSES SEE HAD FILED RETURN FOR THE RELEVANT ASSESSMENT YEAR AS O N 30.3.2013. A NOTICE UNDER SECTION 143(2) OF THE AC T WAS ISSUED AS ON 28.9.2012, WHICH BEING ISSUED BEFORE T HE DATE OF FILING OF RETURN OF INCOME, IS NOT A VALID NOTICE. ANOTHER NOTICE DATED 27.11.2013 BEING ISSUED AFTER 30.9.2013, I.E. SIX MONTHS FROM THE END OF THE MONT H IN WHICH RETURN OF INCOME WAS FILED, IS ALSO NOT A VAL ID NOTICE. SINCE THIS IS ISSUED BEYOND THE TIME LIMIT PRESCRIBED UNDER THE ACT. TO THESE FACTS THERE IS NO QUARREL BETWEEN BOTH THE PARTIES, EVEN THE LEARNED D.R. ADMITTED THAT THESE TWO NOTICES ARE NOT VALID NOTIC ES. THE ONLY ISSUE BEFORE US IS WHETHER THE NOTICE DATED 20.8.2013, AS REFERRED TO IN THE ORDER OF THE LEARN ED CIT (APPEALS), IS A VALID NOTICE. ADMITTEDLY, THERE IS NO REFERENCE OF THIS NOTICE IN THE ORDER OF THE ASSESSING 7 OFFICER, NOR IN THE ORDER SHEET, AS SHOWN TO US. B UT THERE IS A COPY OF NOTICE DATED 20.8.2013 ISSUED BY THE ASSESSING OFFICER. EVEN THE LEARNED CIT (APPEALS) HAS HELD THAT THERE EXISTS SUCH A NOTICE IN THE ASSESSM ENT RECORDS. THE LEARNED COUNSEL FOR THE ASSESSEE COUL D NOT CONTROVERT THE SAID FACTS, AS NO APPEAL NOR A CROSS OBJECTION HAS BEEN FILED AGAINST THE SAME. THE LEA RNED CIT (APPEALS) HAS GIVEN BENEFIT TO THE ASSESSEE NOT ON THE BASIS OF NON-ISSUE OF NOTICE BUT ON THE BASIS OF NO N- SERVICE OF IT. AS PER THE LEARNED CIT (APPEALS), S INCE THE NOTICE DATED 20.8.2013 WAS NOT SERVED TO THE ASSESS EE WITHIN THE TIME PRESCRIBED, THE ASSESSMENT FRAMED I S NOT VALID. HERE, ON THE ISSUE OF SERVICE OF NOTICE, SE CTION 292BB OF THE ACT COMES INTO PLAY. SECTION 292BB OF THE ACT, READS AS UNDER : 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESSM ENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVE D UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCORDANCE WIT H THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PR ECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQU IRY UNDER THIS ACT THAT THE NOTICE WAS (A) NOT SERVED UPON HIM; OR (B) NOT SERVED UPON HIM IN TIME; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER: 8 PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT.] 8. AS PER THIS SECTION, THE ASSESSEE CAN CHALLENGE THE SERVICE OF NOTICE ONLY AT THE ASSESSMENT STAGE. FROM THE PERUSAL OF VARIOUS REPLIES FILED BY THE ASSESSE E BEFORE THE ASSESSING OFFICER AND ALSO FROM THE ORDER OF TH E ASSESSING OFFICER, WE DO NOT FIND ANY SUCH OBJECTIO N BEING RAISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER . THE VALIDITY OF OTHER TWO NOTICES HAVING BEEN NOT ISSUE D WITHIN THE TIME PRESCRIBED HAS BEEN RAISED BEFORE THE ASSE SSING OFFICER, THE SERVICE OF EVEN THESE NOTICES HAVE NOT BEEN CHALLENGED. THE FACT THAT THE ASSESSEE HAS PARTICI PATED IN THE ASSESSMENT PROCEEDINGS IS NOT IN DOUBT, ON PERU SAL OF THE ASSESSMENT ORDER AS WELL AS THE ORDER SHEET ENT RY. IN THIS VIEW, THE LEARNED CIT (APPEALS) WAS NOT RIGHT IN ANNULLING THE ORDER ON THE ISSUE OF NON-SERVICE OF NOTICE. THE CASE LAWS RELIED ON BY THE ASSESSEE ARE ALL REL ATED TO ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT WIT HIN THE TIME LIMIT PROVIDED UNDER THE ACT. SINCE THE ISSUE IN THE PRESENT APPEAL IS THAT OF SERVICE OF NOTICE, THE CA SES ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 9. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LEARNED CIT (APPEALS). HOWEVER, WE NOTICE THAT THE LEARNED CIT (APPEALS) HAS NOT ADJUDICATED THE ISSUE S ON MERITS OF THE CASE. WE, THEREFORE, SET ASIDE THE O RDER OF 9 THE LEARNED CIT (APPEALS) AND SEND THE CASE BACK TO THE CIT (APPEALS) TO ADJUDICATE THE ISSUES ON MERITS. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JANUARY, 2016. SD/- SD/- (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH JANUARY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH FIT FOR PUBLICATION (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER