BHOLA SINGH THAKUR,INDORE vs. I T O 4(1), INDORE

order u/s 143(3) of the Income Tax Act 1961(In short the ‘Act’) dated 08.11.2017 framed by ITO-4(1), Indore.

3. Aggrieved assessee preferred an appeal before the Ld. CIT(A) and partly succeeded.

4. Now the assessee is in appeal before this tribunal raising following grounds of appeal:

“1. The Ld. CIT(A) has erred in law and facts of the case by not considering all the points which were put before him in the written submission made by the assessee.

2. That the Ld.CIT(A) erred on facts of the case and confirmed the reopening of case u/s 147/148. This action of AO and further confirmed by CIT(A) is totally wrong, arbitrary and illegal under the facts of the case.

6. Along with paper book filed on 10.12.2019 assessee has requested for admission of additional ground thereby challenging the reassessment proceeding on the specific issue of non- issuance of statutory notice u/s 143(2) of the Act. In support of the contention that legal ground can be admitted by the Hon'ble Tribunal reliance was placed on the judgment of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT (1992) 229 ITR 383, judgment of Hon'ble jurisdictional High Court in the case of CIT vs. Eicher Motors Ltd. (2007) 293 ITR 464 as well as in the case of DCIT vs. Turquoise Investment & Finance Ltd. (2008) 299 ITR 143.

7. For the proposition that the Hon'ble I.T.A.T., was justified in allowing to raise the issue of legal ground for non issuance of notice u/s 143(2) for the first time and that section 292BB of the Act is a rule of evidence and would not apply so far as failure of service of notice was concerned and that section 292BB is prospective and applicable only for A.Y. 2008-09 onwards.

Reliance was placed on the decision of Hon'ble High Court of Delhi in the case of Pr. CIT vs. Silver Line in to 582/2015.

9. Per contra, Ld. Departmental Representative (Ld. DR) though supported the orders of the lower authorities could not controvert the fact that statutory u/s 143(2) of the Act was not issued to the assessee. Sufficient opportunity was provided to the Ld. DR on various dates of hearing to verify from the case records that whether the notice u/s 143(2) of the Act was issued before commencing reassessment proceedings. However, no such evidence was placed on record.

11. So far as the admission of legal ground is concerned, after perusing the judgment of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT (1992) 229 ITR 383, judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Eicher Motors Ltd. (2007) 293 ITR 464 and the judgment in the case of DCIT vs. Turquoise Investment & Finance Ltd. (2008) 299 ITR 143, are of the considered view that additional legal ground raised by the assessee deserves to be admitted as it is purely legal in nature and goes to the root of the matter and all the material relating to the additional ground are available on record.

12. In the instant case it is an uncontroverted fact at the end of revenue that notice u/s 143(2) of the Act was not served to the assessee. Thus, it is clearly evident that all the materials relating to additional ground raised by the appellant is available on record. Coordinate Bench Bangalore in the case of Shri E.

Krishnappa vs. ITO, in ITANo.313 to 315/Bang/2014 wherein the judgment of Hon'ble MP High Court in the case of Tolaram Hassomal dated 10.03.2006 and the two subsequent decision of the Hon'ble MP High Court in the case of CIT vs. Eicher Motors Ltd. (supra) and the judgment in the case of DCIT vs. Turquoise 6 Investment & Finance Ltd. (supra) were considered, held that “when a legal question is raised then the Tribunal cannot be precluded from admitting the same and considering it in accordance with law”.

5. At the outset, it must be stated that out of two questions of law that arose for consideration in in Hotel Blue Moon’s case2 the first question was whether notice under Section 143(2) would be mandatory for the purpose of making the assessment under Section 143(3) of the Act. It was observed:- “3. The Appellate Tribunal held, while affirming the decision of CIT (A) that non-issue of notice under Section 143(2) is only a procedural irregularity and the same is curable. In the appeal filed by the assessee before the Gauhati High Court, the following two questions of law were raised for consideration and decision of the High Court, they were: “(1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time- limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? And (2) Whether, on the facts and in the circumstances of the case and in view of the undisputed findings arrived at by the Commissioner of Income Tax (Appeals), the additions made under Section 68 of the Income Tax Act, 1961 should be deleted or set aside?” 4. The High Court, disagreeing with the Tribunal, held, that the provisions of Section 142 and sub-sections (2) and (3) of Section 143 will have mandatory application in a case where the assessing officer in repudiation of return filed in response to a notice issued under Section 158-BC(a) proceeds to make an inquiry. Accordingly, the High Court answered the question of law framed in affirmative and in favour of the appellant and against the Revenue. The Revenue thereafter applied to this Court for special leave under Article 136, and the same was granted, and hence this appeal. … … … 13. The only question that arises for our consideration in this batch of appeals is: whether service of notice on the assessee under Section 143(2) within the prescribed period of time is a prerequisite for framing the block assessment under Chapter XIV-B of the Income Tax Act, 1961? … … … 27. The case of the Revenue is that the expression “so far as may be, apply” indicates that it is not expected to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression “so far as may be, apply”. In our view, where the assessing officer in repudiation of the return filed under Section 158- BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143.”

8. The law on the point as regards applicability of the requirement of notice under Section 143(2) of the Act is quite clear from the decision in Blue Moon’s case2. The issue that however needs to be considered is the impact of Section 292BB of the Act.

10. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter.