NITESH BERA (HUF) V. THE ASST. COMMISSIONER OF INCOME TAX

ITA/56/2021

AI Insights

This case involves an appeal by Nitesh Bera (HUF) against the order of the Income Tax Appellate Tribunal, Bengaluru, which pertained to the assessment years 2008-2009 and 2010-2011. The primary contention was the non-issuance of notice under Section 143(2) of the Income Tax Act, 1961, which the appellant argued rendered the assessment orders invalid. The ITAT had remanded the matter to the CIT(A) for fresh consideration but did not address all the grounds raised by the appellant. The High Court of Karnataka, after hearing both parties, directed the CIT(A) to consider all the grounds and did not disturb the remand order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 752786 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-02-2023
• Assessment Year: misc
• Other Referred Cases: CIT Vs. C.Ramaiah Reddy
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: S ANNAMALAI
• Keywords: Assessment Order; Income tax appeal; Notice under section 143(2); Reassessment; Validity of proceedings
• Section: 148; 292BB; 143(2); 260-A

Judgement Text

" - 1 - ITA No. 56 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2023 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 56 OF 2021 BETWEEN: NITESH BERA (HUF) REP. BY ITS MANAGER SMT. UMA BERA AGED ABOUT 37 YEARS NO.25/1, 3RD FLOOR K.R.SHETTYPET, ANANDAPPA LANE AVENUE ROAD BENGALURU-560 002 PAN:AADHN428M …APPELLANT (BY SHRI. S. ANNAMALAI, ADVOCATE) AND: THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-5(2)(1), BMTC BUILDING 80 FT ROAD, KORAMANGALA BENGALURU-560 040 …RESPONDENT (BY SHRI. M. DILIP, STANDING COUNSEL FOR SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 21.06.2019 PASSED IN ITA NOS. 897-898/BANG/2018, FOR THE ASSESSMENT YEAR 2008-2009 AND Digitally signed by YASHODHA N Location: HIGH COURT OF KARNATAKA - 2 - ITA No. 56 of 2021 2010-2011 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED THEREIN AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT AND TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE COMMON ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU C BENCH IN ITA NOS. 897-898/BANG/2018 DATED 21.06.2019 FOR THE ASSESSMENT YEARS 2008-2009 AND 2010-2011 VIDE ANNEXURE-A AND ETC. THIS ITA, COMING ON FOR FINAL HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Assessee challenging the order dated 21.06.2019 in ITAs No.897 & 898/Bang/2018 passed by the ITAT1, \"B\" Bench, Bangalore, has been admitted to consider following questions of law: “1. Whether the Tribunal ought to have adjudicated all the grounds of appeal raised by the Appellant and is not justified in adjudicating only one ground by holding that the other grounds are not argued and consequently passed a perverse order on the facts and circumstances of the case. 2. Whether the Tribunal ought to have held for the A.Y. 2008-09 that the notice under section 143(2) having not been issued, the same renders the assessment order bad in law and consequently passed a perverse order on the facts and circumstances of the case. 1 Income tax Appellate Tribunal, Bengaluru Bench - 3 - ITA No. 56 of 2021 3. Whether the Tribunal ought to have held for the A.Y.2010-11 that the Assessing Officer having failed to dispose the objections filed by the Appellant against invoking the provisions of section 147 of the Act, the failure is detrimental to the very validity of the proceedings and consequently ought to have cancelled the assessment on the facts and circumstances of the case. 4. Whether the Tribunal ought to have held that the Appellant having duly declared the share transactions in the return of income, the invocation of provisions of section 147 of the Act for the same is not warranted and consequently passed a perverse order on the facts and circumstances of the case.” 2. Heard Shri.S.Annamalai, learned advocate for the appellant-Assessee and Shri.M.Dilip, learned Standing Counsel for the respondent-Revenue. 3. Brief facts of the case are, a notice under Section 148 of the Act2 was issued to the assessee. Assessee filed its returns. According to the assessee, notice under Section 143(2) of the Act was not issued. The A.O.3 and the CIT(A)4 have not considered the said aspect. The ITAT has remanded the matter to the CIT(A) for fresh consideration. However, perusal of order disposing of objections dated 04.03.2016 by 2 Income Tax Act, 1961 3 Assessing Officer 4 - 4 - ITA No. 56 of 2021 the A.O. shows that the notice under Section 143(2) of the Act was not issued and therefore, the A.O. could not have proceeded further. With this specific stand, the assessee has filed this appeal. 4. Shri Annamalai, for the assessee adverting to the order dated 04.03.2016 disposing of the objections with regard to non-issuance of notice under Section 143(2) of the Act, submitted that the A.O. has admitted that said notice was not issued. 5. Shri Dilip for the Revenue submitted that the A.O. was considering the objections filed by the assessee dated 23.02.2016 whereas the objections on which the reliance is placed by the assessee is dated 14.01.2016. He submitted that the order passed by the A.O. also does not contain the assessment year. In view of these discrepancies, this Court cannot record a finding that objections specifically pertain to assessment year 2008-09. Accordingly, he prayed for dismissal of this appeal. - 5 - ITA No. 56 of 2021 6. We have carefully considered rival submissions and perused the records. 7. The point involved in this appeal is, whether notice under Section 143(2) of the Act is issued or not. Shri Annamalai has placed reliance on the judgment of this Court in CIT Vs. C.Ramaiah Reddy5 and submitted that wherever notice under Section 143(2) of the Act is not issued within twelve months before completion of expiry of time limit, reassessment is not valid. He also contended that in case where notice under Section 143(2) of the Act is not issued, Section 292BB of the Act shall have no application. There is no dispute with regard to this position of law. However, in his order dated 14.03.2016, while disposing of the objections filed by the assessee, the A.O. has neither mentioned the year nor the correct date of assessment. 8. Though Shri Annamalai pointed out that objections were indeed filed on 23.02.2016, it was objected by Shri Dilip 5 ITA No.192/2012 D.D. 24.06.2020 - 6 - ITA No. 56 of 2021 stating that there is overwriting of the date. In his order dated 04.03.2016, the A.O. has noted as follows: “With regards to objection as non issuance of notice u/s 143(2) within the stipulated time is squarely covered by S.292B and hence not accepted” 9. The above finding is also contrary to law laid down by this Court in the case of Shri C.Ramaiah Reddy. In view of the factual discrepancy with regard to date of objections, we do not see any ground to interfere in this appeal. 10. With regard to assessment year 2010-11, in para 9 of it’s order, the ITAT has recorded the grounds urged by the assessee but not recorded a finding whether the objections filed by the assessee for the assessment year 2010-11 was disposed of by the A.O. 11. Shri Annamalai contended that ITAT has not adjudicated other grounds raised by the assessee but remanded the matter to the CIT(A) only to consider the question as to whether notice under Section 143(2) was issued or not and disposal of objections by the A.O. He - 7 - ITA No. 56 of 2021 prayed that in the facts of this case, the CIT(A) may be directed to consider all the grounds urged before the ITAT. 12. Shri Dilip has no objection. 13. In view of the above, this appeal is disposed of directing the CIT(A) to consider all questions raised before the ITAT. Since the appeal is against the remand order, we are not disturbing the remand, questions of law are not answered in this appeal. No costs. Sd/- JUDGE Sd/- JUDGE YN List No.: 1 Sl No.: 52 "