TARSEM SINGLA vs. DCIT CENTRAL CIRCLE III LUDHIANA

ITA/112/2015HC Punjab & HaryanaPHHC01109734201518 February 20168 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issuance of a notice under Section 143(2) is not a mandatory requirement for assessments framed under Section 153A of the Act. The Court, referring to the Delhi High Court's decision in Ashok Chaddha's case, reasoned that Section 153A begins with a non-obstante clause and does not specifically prescribe the issuance of a notice under Section 143(2). The phrase 'so far as may be applicable' in Section 153A(1)(a) cannot be stretched to make the issuance of a Section 143(2) notice mandatory. The notice issued under Section 153A(1)(a) itself, along with the two questionnaires issued to the assessee, were considered sufficient to provide notice and opportunity to the assessee. The judgments relied upon by the assessee were distinguished as not pertaining to the specific context of Section 153A assessments. Consequently, the Tribunal's approach was found to be without error, and no substantial question of law arose.

What were the facts?

The assessee, Tarsem Singla, engaged in real estate, was subjected to a search and seizure under Section 132(1) of the Income Tax Act, 1961, on May 7, 2008. This led to a block assessment for the preceding six years. For assessment year 2004-05, a notice under Section 153A was issued on December 5, 2008, to which the assessee filed a return. Notices under Sections 143(2) and 142(1) were subsequently issued on June 10, 2010. The Assessing Officer made additions of ₹5,25,000 for house construction and ₹9,95,029 for capital difference. The CIT(A) partly allowed the appeal, deleting the addition for house construction but upholding the rest. The assessee appealed to the ITAT, which dismissed the appeal ex parte. The present appeal is filed under Section 260A against the ITAT's order dated November 22, 2013.

What were the issues?

1. Whether the issuance of a notice under Section 143(2) within the stipulated time is mandatory or a curable procedural irregularity affecting the Assessing Officer's jurisdiction to undertake the assessment, particularly in the context of a block assessment under Section 153A? 2. Whether balance sheets and capital accounts filed during a block assessment can be considered as evidence found in consequence of the search to sustain additions? 3. Whether income disclosed in an opening balance sheet represents income earned in previous years, and if so, whether additions should be made to the relevant previous years rather than the subsequent year? Assessee's contentions: The issuance of notice under Section 143(2) on June 10, 2010, was beyond the stipulated six-month period, rendering the Assessing Officer without jurisdiction. Reliance was placed on Hotel Blue Moon, Virendra Dev Dixit, CIT vs. B.Satyanarayana, CIT vs. Pratapbhai K.Soni, and R. Romi. Revenue's contentions: The revenue supported the impugned order and relied on CIT vs. Panchvati Motors (P) Limited, CIT vs. Raj Kumar Arora, and Ashok Chaddha.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(2),Section 142(1),Section 153A,Section 260A

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 18.2.2016 Tarsem Singla ……Appellant vs. The DCIT, Central Circle III, Ludhiana …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MRS. JUSTICE RAJ RAHUL GARG

1.

Whether Reporters of local papers may be allowed to see the judgment?

2.

To be referred to the Reporters or not? YES

3.

Whether the judgment should be reported in the Digest? Present: Mr. Pankaj Jain, Sr. Advocate with Mr. Divya Suri, Advocate and Mr. Sachin Bhardwaj, Advocate for the appellant-assessee. Mr. Rajesh Katoch, Advocate for the revenue. Ajay Kumar Mittal, J. CM No.7425 CII of 2015

1.

This is an application under Section 5 of the Limitation Act, GURBAX SINGH 2016.04.22 08:49 I attest to the accuracy and integrity of this document High Court Chandigarh 1963 for condonation of delay of 164 days in filing the appeal.

2.

Notice of the application was given to the respondent. For the reasons stated in the application and after hearing learned counsel for the parties, the delay of 164 days in filing

The order continues below.

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