M/S. ELECTRONICS COMPONENTS vs. ACIT, NEW DELHI

ITSSA 28/DEL/2009Status: DisposedITAT Delhi29 May 20255 pages
AI SummaryAllowed

What were the facts?

The assessee, M/s. Electronics Components, filed an appeal before the Income Tax Appellate Tribunal (ITAT) for the block period 01.04.1985 to 02.08.1995. The appeal challenged the order dated 30.12.2008 passed by the Assistant Commissioner of Income Tax (ACIT), Circle-30(1), New Delhi, under section 158BA read with sections 158BB, 158BC, and 143(3) of the Income-tax Act, 1961. The assessee sought to raise an additional ground challenging the validity of the assessment framed under section 158BC, arguing that no section 143(2) notice was issued. The Revenue objected, stating that a section 143(2) notice was issued on 04.02.2003 and served on 05.02.2003. The ITAT noted that the initial assessment was framed on 30.08.1996, following a section 158BC notice issued on 16.10.1995.

What did the Tribunal hold?

The Tribunal held that the assessee's additional ground challenging the validity of the assessment due to the non-issuance of a section 143(2) notice was admissible. Citing NTPC Limited vs. CIT 229 ITR 383 (SC) and Al Cargo Logistics Ltd. vs DCIT (2012) 21 taxmann.com 429 (Mum) (SA), the Tribunal stated that a legal ground going to the root of the matter can be entertained if all relevant facts are on record. The Tribunal found that the Assessing Officer had failed to issue the mandatory section 143(2) notice in the first round of scrutiny, which is a prerequisite for compliance with section 158BC(1)(a) read with its first proviso, as held in Hotel Bluemoon (supra). The Tribunal rejected the Revenue's objection regarding the belated stage and estoppel, citing PV Doshi Vs.CIT (1978) 113 ITR 22 (Guj) and Inventors Industrial Corporation Ltd. Vs. CIT (1992) 194 ITR 548 (Bom). Applying the principle of 'sublato fundamento cadit opus' (when the foundation is removed, the superstructure falls), the Tribunal concluded that the Assessing Officer's assumption of jurisdiction in the first round was non-est, rendering the subsequent assessment invalid. Consequently, the assessment was quashed. All other pleadings on merits were rendered academic.

What were the issues?

1. Whether the assessment framed under section 158BC of the Act is valid, considering the alleged non-issuance of a mandatory notice under section 143(2) of the Act, as per the assessee's contention, relying on ACIT Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC). Assessee's Arguments: The assessee contended that the assessment framed under section 158BC is invalid due to the non-issuance of a section 143(2) notice, which is mandatory. They cited ACIT Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) to support their claim that the assessment should be quashed. Revenue's Arguments: The Revenue objected to the admission of this additional ground at a belated stage. They argued that a section 143(2) notice dated 04.02.2003 was indeed issued and served on 05.02.2003. They further contended that since the appeal pertains to the 'second' round of remand proceedings, where a section 143(2) notice was issued in furtherance of a prior tribunal order, the assessee is estopped from raising this argument. They relied on the fact that the assessment order itself mentioned the issuance of the notice.

Which sections of the Income-tax Act were involved?

Section 158BA,Section 158BB,Section 158BC,Section 143(3),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Hearing: 29.05.2025Pronounced: 29.05.2025

PER SATBEER SINGH GODARA, JM This assessee’s appeal for the block period 01.04.1985 to 02.08.1995 arises against the Assistant Commissioner of Income Tax, Circle-30(1), New Delhi’s order dated 30.12.2008 involving proceedings under section XIV(B)-158BA read with section 158BB, 158BC and section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

IT(SS)A No.28/Del/2009

2.

Case called twice. The department has filed it’s adjournment petition which is hereby rejected keeping in mind the fact that this appeal dates back to the year 2009. 3. It emerges during the course of hearing that the assessee’s

The order continues below.

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