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Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
The present appeal has been preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) -XXV, New Delhi [hereinafter referred to as ‘CIT(A)’] dated 13.08.2019, pertaining to AY 2009-10.
The assessee in this appeal has taken following grounds of appeal:-
G. No.1 147 proceedings unwarranted A. Reasons not sufficient for permitting reopening - The only reason for reopening is that - assessee has taken loss through CCM of Rs.22,57,305/-
- There is no mention in reasons that CCM is not on account of genuine error - The reason to believe is based only on the fact that there is a loss of Rs.22,57,305/- vide CCM - CCM was permissible at that time to be done by the broker, to correct the bonafide errors in punching the code of the clients while executing share transactions on behalf of and on instructions of clients - Thus there is no link between the material available and the reasons recorded to show for escaped asstt. - Hence, simply to mention that there is a loss of Rs.22,57,305/- due to CCM cannot be a valid reason for reopening - These are infact not the reasons to believe but, at the most, the reason to suspect, which do not permit the reopening - Thus the reopening is unsustainable in law B. Reasons mechanical, without application of mind, on borrowed satisfaction - The A.O. assumed escaped income only on the basis of report from Inv. Wing -He was also not having the material, even till date, on the basis of which, Inv. Wing formed its opinion -The A.O. thus, worked on borrowed satisfaction and in a mechanical manner, on the basis of which, the reopening can be validated G. No.2 Approval u/s.151 not as per law - Not pressed - as 151 performa / order is not available with assessee G. No.3 A. Alleged notice u/s,143(2) Dtd.14.10.16 issued after 30.09.16
- As per A.O. notice u/s.143(2) is Dtd.14.10.16 i.e. after 30.09.16 - Proviso to Sec. 143(2) provides that notice u/s. 143(2) cannot be issued after the 06 months after close of the financial year in which the return is furnished - The return in present case, furnished on 31.03.16, so, notice u/s. 143(2) was to be issued on or before 30.09.16 - Since alleged notice has been issued beyond 30.09.16, therefore it is not valid in the eyes of law and it cannot validate the asstt. Proceedings - CIT(A) while dealing with this issue, has held that in view of CIT Vs. Laxman Das Khandelwal Civil Appeal No.6261-6262 / 2019, since the assessee did not protest and participating in asstt., therefore, he dismissed this ground. - CIT(A) while dealing with this issue, has held that in view of CIT Vs. Laxman Das Khandelwal Civil Appeal No.6261-6262 / 2019, since the assessee did not protest and participating in asstt., therefore, he dismissed this ground (29-36) - Sec.292BB is not applicable in the case where the notice has been issued after statutory time period - Sec.292BB is very clear, it deals only with the issue / dispute with respect to service of notice. Sec. deals with only following 03 claims namely:- Non service Non service in time Service in a improper manner This Sec. do not give relaxation for the delay in issuance. In the present case, undisputedly, the notice is Dtd.14.10.16 i.e. beyond statutory time period of 30.09.16, which situation is not covered vide Sec.292BB. - In cited case, only the issue relating to the service of notice has been decided and not the aspect of issue of notice, which is evident from (to quote)
“iv. This matter in respect of service of notice u/s.143(2) has been decided by Hon’ble Supreme Court in ...” - Sec.292BB comes into play only when the notice stands issued within statutory time period, and the dispute is there either for nonservice or nonservice in time or nonservice improper manner. - In our case, the notice has been issued beyond time therefore, Sec.292BB is outrightly not applicable. - Sec.292BB has not provided for curing any delay in issuance of notice, it deals only with the issues of service B. Non service of notice u/s.!43(2) - The assessee admittedly filed ITR u/s.148 on 31.03.16 i.e. in time, therefore the notice u/s. 143(2) was necessary to be served on assessee - During whole asstt. proceedings, no notice u/s. 143(2) has been served - In the asstt. order also, there is no mention of any notice u/s. 143(2) - In CIT(A), the assessee took up specific G. No.3 on this issue and vide written Sub. to CIT(A) also, contended that there is no service of notice u/s. 143(2) - During appeal proceedings, one alleged notice u/s. 143(2) Dtd.14.10.16 was provided to CIT(A) by the A.O. G. No.4 Share loss of Rs.22,57,305/- through CCM disallowed - on merits - The assessee has been into share dealing business - During the year, it suffered losses in shares out of which loss of Rs.22,57,305/- was on account of transactions wherein loss took place by application of Client Code Modification (CCM) by the broker - The A.O., disbelieved the genuineness of this loss and added the same to the returned income
A perusal of the above grounds of appeal reveals that the assessee, inter alia, vide ground no.3 has taken the legal ground that the notice u/s 143(2) of the Act was issued by the Assessing Officer ( in short ‘the AO’) beyond the stipulated date.
The ld. counsel for the assessee in this respect has submitted that the return of income was furnished on 31.03.2016 and as per provisions of section 143(2) of the Income Tax Act as applicable for the assessment year under consideration, the notice was required to be issued by 30.09.2016.
Further, the ld. Counsel for the assessee in this respect has invited my attention to page 16 & 17 of impugned order of the the Ld. CIT(A), wherein the Ld. CIT(A) at page-17 of the order has reproduced the contents of the notice issued by the AO u/s 143(2) of the Act, wherein, date of notice has been mentioned as 14.10.2016, which date comes after the last date for issuance of notice u/s 143(2) of the Income Tax Act for the purpose of assuming jurisdiction to framed the assessment u/s 143(3) of the Act.
Since, the notice in this case has been issued after the due date and which effects the very jurisdiction of the AO to frame the assessment, therefore, the assessee framed by the AO is invalid and void and therefore the impugned assessment order framed by the AO u/s 147/143(3) is hereby quashed, the consequential additions made by the AO are accordingly stand deleted.
In the result, the appeal of the assessee stands allowed.