GAURAVBHAI HARGOVINDHAI DAVE vs. TAX RECOVERY OFFICER 4

C/SCA/284/2019 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 284 of 2019 With R/SPECIAL CIVIL APPLICATION NO. 285 of 2019

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/-

and HONOURABLE MR.JUSTICE A.C. RAO Sd/-

========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? Yes 2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? No ========================================================== GAURAVBHAI HARGOVINDHAI DAVE Versus TAX RECOVERY OFFICER 4 ========================================================== Appearance: UMAIDSINGH BHATI(7973) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO

Page 1 of 35

C/SCA/284/2019 JUDGMENT Date : 05/08/2019

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. As the issues involved in both the captioned writ applications are the same, those were heard analogously and are being disposed of by this common judgment and order. 2. The two captioned writ applications are filed by the husband and wife respectively in their capacity as the Directors of a Company running in the name of M/s. Shivam Water Treaters Pvt. Ltd. 3. For the sake of convenience, the Special Civil Application No.285 of 2019 is treated as the lead matter. 4. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: “(A) YOUR LORDSHIPS may be pleased to issue the appropriate writ, order or direction, quashing and setting aside the impugned orders of attachment dated 01.03.2012 and 19.12.2018, order setting proclamation dated 29.10.2018 and 19.12.2018 and proclamation of sale dated 21.12.2018 as being bad, illegal, unjust, unreasonable, arbitrary, violative of the principles of natural justice and contrary to the law. (B) YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of Proclamation of Sale dated 21.12.2018 (Annexure- “E”) issued by the Respondent pending the admission, hearing and final disposal of this Petition. (C ) YOUR LORDSHIPS may be pleased to grant such Page 2 of 35

C/SCA/284/2019 JUDGMENT other and further reliefs as may be deemed fit by this Hon'ble Court, in the interest of justice.” 5. The writ applicant seeks to challenge the following orders: (i) The order of attachment (ITCP-16) of the Plot No.7, Vibrant Villa, Opp. Sanskardham, Bopal-Sanand Road, Manipur, Ahmedabad dated 01.03.2012 and 19.12.2018 respectively issued under the Rule 48 of the Second Schedule to the Income Tax Act, 1961. (ii) The notice for setting a sale proclamation (ITCP-17) dated 29.10.2018 and 20.12.2018 respectively in connection with the three properties including the property belonging to the petitioner, i.e, Plot No.7, Vibrant Villa, Opp. Sanskardham, Bopal-Sanand Road, Manipur, Ta: Sanand and District- Ahmedabad issued under the Rule 53 of the Second Schedule to the Income Tax Act, 1961. (iii) The proclamation of sale (ITCP-13) dated 21.12.2018 published in the Times of India and Sandesh respectively dated 22.12.2018 in respect of the public auction of the three properties including the property belonging to the Petitioner i.e. Plot No.7, Vibrant Villa, Opp. Sanskardham, Bopal-Sanand Road, Manipur village, Sanand issued under the Rules-38 & 52(2) respectively of the Second Schedule to the Income Tax Act, 1961 & published in the News Paper- “Times of India” on 22.12.2018. 6. It appears from the materials on record that the Page 3 of 35

C/SCA/284/2019 JUDGMENT Company, namely, Shivam Water Treaters Pvt. Ltd declared its total income for the A.Y. 2010-11 to the tune of Rs.21,31,12,730/- The total tax payable came to Rs.8,20,27,000/-. The Department acknowledged the receipt of the income as declared by the assessee. The amount of tax payable, as declared by the assessee, was accepted by the Department without any query. 7. The acknowledgment under 143(1) of the Act, ultimately, led to the assessment proceedings under Section 143(3) of the Act. 8. The chronology of dates and events, after the order under Section 143(3) of the Act came to be passed, as furnished by the Revenue is as under: Sr. No. Date Particulars 1 04/10/11 Order U/s. 179 of the I.T Act, 1961 came to be passed by fixing the liabilities upon the directors of the company viz. Shri Gaurav H. Dave & Smt. Amiben G. Dave. 2 29.11.2011 R.C. Received for certified demand of Rs.8,71,86,510/-

for

A.Y.

2010

& Rs.7,25,920/- for A.Y. 2008-09 from the A.O. Thereafter ITCP-1 issued by the then TRO-8 (Now TRO-4, Ahmedabad) on 29.11.2011 and served upon the assessee on 01.12.2011. 3 04/01/12 Show-cause notice issued to both the directors for payment of the Self-Assessment Tax u/s. 140A of the Act, for the A.Y. 2010-11. 4 20.01.2012 Various immovable properties in the name of assessee company and director's name were attached, in ITCP-16 of the Income Tax Act. 5 06/02/12 Notices u/s. 226(3) of the I.T. Act, 1961 were issued to various debtors and banks of the Page 4 of 35

C/SCA/284/2019 JUDGMENT assessee company. 6 01/03/12 Various immovable properties in name of assessee company and directors name were attached, in which properties Vibrant Villa, Village-Manipur, TA- Sanand (Plot No.7,45,48 &n 70) and Meghanshwood (Plot No.4 to 11), Village-Chekhla, TA- Sanand also included. 7 12/09/12 Notice u/s. 226(3) of the I.T Act, 1961 were issued upon various debtors and banks of assessee company. 8 28.09.2012 Order u/s. 221(1) of the Act was passed on 28.09.2012 levying penalty of Rs.1 Crore due to non-payment of self-assessment tax. 9 15.02.2013 A proclamation of sale notice for open plots in Vibrant

Villa,

Village-Manipur

& Meghanswood, Village-Chekhla, TA- Sanand was published in daily newspapers on 17.02.2013 for auction of the immovable properties and I.T. C.P 17 issued to Shri Gaurav H. Dave & Smt. Amiben G. Dave, they refused to accept the said notice, therefore, notice was affixed and signature of two witnesses were taken. 10 25.02.2013 A letter from M/s Metroglobal Limited was received through its company Secretary Shri Nitin S. Shah objecting the auction proposed for above mentioned open plots. 11 18.03.2013 Order u/s. 143(3) of the I.T. Act, 1961 was passed on 18.03.2013 for A.Y. 2010-11 and as a result demand of Rs.1654.01 Lakhs was raised. (P/127) 12 Assessee filed petition before this Hon'ble Court against the proclamation notice and letter on the assessee withdrew the writ. 13 15.04.2013 Assessee submitted a proposal for making part payment against the outstanding demand. But assessee did pay any demand. 14 16.04.2013 Order of this Court in SCA No.1866 of 2013 dated 16.04.2013 is reproduced as under:- “Learned counsel Shri Tushar Hemani for the petitioner stated that upon representation of Page 5 of 35

C/SCA/284/2019 JUDGMENT the petitioner, the commissioner of Income Tax is in the process of granting installments for payment of tax dues. At this stage, he therefore, under instructions, does not press this petition. Disposed of accordingly. Notice is discharged.” 15 24.07.2013 Payment against second charges of the Income Tax department on the securities offered to the bank and focus on dues of the company towards income tax department for repayment and schedule assessee company's letter dated 24.07.2013. 16 11.12.2013 & 12.12.2013 Notices u/s. 226(3) of the I.T Act, 1961 were issued upon various debtors of the assessee company. 17 30.01.2014 Notices u/s. 226(3) of the I.T. Act, 1961 were issued upon various debtors of the assessee company. 18 15.02.2015 Notice u/s. 226(3) issued upon Defence Laboratory, Jodhpur and requested to issue demand in favour of Income Tax department at the earliest. 19 18.11.2015 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 issued on 18.11.2015 upon the principal officer of M/s. Shivam Water Treaters Pvt. Ltd to attend on 26.11.2015 at 11:30 A.M. Nobody attended on given time. 20 10.03.2016 & 21.04.2016 Notice u/s. 226(3) of the I.T Act, 1961 were issued upon various debtors of the assessee company. 21 12/09/17 Summon under Rule 83 of the Second Schedule to the Income Tax Act, 1961 issued on 18.11.2015 upon the principal officer of M/s. Shivam Water Treaters Pvt. Ltd to attend on 26.11.2015 at 11:30 A.M. Nobody attended on given time. 22 05/11/17 Valuation report received from DVD-1 Ahmededabad on 05.11.2018 in the case of Meghansh Woods, Village-Chekhal- TA- Sanand. 23 27.12.2017 Order u/s. 179 of the I.T Act, 1961 was Page 6 of 35

C/SCA/284/2019 JUDGMENT passed by the A.O. for outstanding demand for Rs.1907.90 for A.Y. 2009-10 to A.Y. 2012- 13 and fixed liability upon the directors of the company that Shri Gaurav H. Dave & Amiben G. Dave (P/165) 24 29.12.2017 Letter sent to Valuation Officer for valuation Report in the case of Meghansh Woods, Village-Chekhla, TA-Sanand & Vibrant Villa, Village Manipur, Ta-Sanand. 25 29.01.2018 Information to Draw Recovery Certificate in Form 57 in the case of M/s Shivam Water Treaters Pvt. Ltd for recovery of outstanding demand of Rs.1453.99 Lacs for A.Y. 2010-11 to 2014 received from the A.O 26 21.02.2018 A recovery survey action conducted on 21.02.2018 at the 201 to 204, Shital Varsha Arcade,

C.G.

Road,

Navrangpura, Ahmedabad. Two bank accounts were found and the same were attached, resultant Rs.1.87 Lakhs was recovered from the banks. During the course of survey proceeding it was stated that books of accounts were with Auditor and same would furnished on 26.02.2018. 27 22.02.2018 Request for giving installments against payment of IT Dues for Self Assessment Tax for the A.Y. 2010-11 & other years filed by the assessee before the Addl. CIT, Range- 4(1), Ahmedabad & DCIT, Circle-4(1)(1), Ahmedabad. 28 26.02.2018 Summons under Rules 83 of the Second Schedule to the Income Tax Act, issued but no one attended in the time given. 29 22.02.2018 & 27.02.2018 Notice u/s. 226(3) were issued to all the debtors and bank account details gathered during the survey proceedings. 30 19.03.2018 CIT (A) dismissed appeal for A.Y. 2010-11 (P/148) 31 20.03.2018 Summons under Rules 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Manager, Allahabad Bank, SP Nagar Branch & Manager, Canara Bank, Isanpur Page 7 of 35

C/SCA/284/2019 JUDGMENT Branch, Ahmedabad. 32 22.04.2018 After survey proceedings and as per available details i.e. return of income, ITS, 360 degree profile, all the bank accounts and the properties in the name of directors were attached. Two bank accounts maintained with the Punjab National bank and ICICI Bank were found and the same were attached. Resultanty

some

recovery

Rs. Rs.8,08,310/- was instantly made from the Punjab National Bank and it was also intimated by the bank that there were Fixed Deposits in the form of Bank Guarantee held with the Punjab National Bank amounting to Rs.41,70,268/-(31,43,559 + 10,26,709). Out of Rs. 31,43,559 bank FDs Rs. 21,54,400/- and Rs. 6,72,830/- had already been collected from bank and balance FDs will be matured schedule as under:- Sr. No. FS Open Date Maturity date Amount 1 23.01.2017 23.07.2019 Rs. 1,24,368/~ 2 23.01.2017 23.07.2019 Rs.32,443/- 3 08/06/17 08/06/19 Rs.

5,14,861/- 4 19.12.2017 19.02.2020 Rs. 3,17,487/- Details of bank guarantees details will be matured schedule as under: Page 8 of 35

C/SCA/284/2019 JUDGMENT Sr. No. Open Date Maturity Date Amount 1 23.01.2017 23.07.2019 Rs. 60,216/- 2 08/02/18 08/08/23 Rs.2,93,663/- Above balances will Fds/guarantees will be collected from the bank as when it's matured 33 29.08.2018 Summons under Rule 83 of the second Schedule to the Income Tax Act, 1961was sent to Shri Gaurav H. Dave & Smt. Amiben G. Dave on 29.08.2018 to attend the office of the department on 06.09.2018 but none attended on the given date and time. 34 25.04.2018 A letter from the Manager, Punjab National Bank, Navrangpura Branch, Ahmedabad received by this office wherein it was stated that Shri Gaurav Dave, Director of the company has sent a WhatsApp message from his mobile, by stating that appropriate direction was issued to the CIT(Cir.8) Ahmedabad to grant permission to pay the arrears of self assessed tax for A.Y.2010-11 amounting to Rs.72,48,908.24/with interest of Rs.4,34,934.49/by 31/3/2019 along-with release of bank accounts pertaining to CBDT Order OM-374/A/III/2011. But this office has not received any such direction for revocation of bank accounts which were attached by this office. 35 27.04.2018 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Shri Gaurav H. Dave & Amiben G. Page 9 of 35

C/SCA/284/2019 JUDGMENT Dave on 27.04.2018 to attend office on 01.05.2018 at 12:00 PM & 11:00 AM respectively but no one from them attended in given time. 36 27.04.2018 A summons was issued to Shri Naren Jhadkia, Chief Manager, Punjab National Bank, Navrangpura Branch, Ahmedabad and his statement was recorded on oath on 27/4/2018. On being asked the following questions i.e. Mode of receipt of the said letter, name and identity of person delivering the letter, identity of the employee of the bank who received the letter, the details of other such letters received by the bank if any.

In answer to the above questions Shri Naren Jhadkia, Chief Manager, Punjab National Bank, Navrangpura Branch, Ahmedabad has stated that on 24/4/2018, Mr. Gaurav Dave, authorised signatory of M/s. Shivam Water Treaters Pvt. Ltd. has sent him a WhatsApp message at 11.23 am from his mobile No.9824052338.

The

message

was containing a photocopy of letter dated 16/04/2018 issued by Pr. Chief Commissioner of Income tax, Ahmedabad, addressed to M/s. Shivam Water Treaters Pvt. Ltd., contention of the said letter was that the Pr. CCIT, Ahmedabad has admitted its appeal and issued appropriate directions to CIT, Circle-8, Page 10 of 35

C/SCA/284/2019 JUDGMENT Ahmedabad to grant permission to pay the arrears of self assessed tax for A.Y. 2010-11 amounting to Rs.72.49 lakhs with interest of Rs.4.35 lakhs by 31/03/2019 alongwith release of banks accounts pertaining to CBDT order OM-374/A/III/2011. It is also mentioned that a reference for the same shall be issued to the concerned institutions and banks by appropriate authorities as defined in said CBDT order. He has also received a telephonic call from Mr. Gaurav Dave, Director of the Co. from the Mob. No.9824052338 with a request to ensure that the bank does not delivered any such letter to Income-tax Department. This office has also informed to concern A.O. to take necessary action for launching prosecution against above defaulter for forged letter. 37 02/05/18 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Shri Gaurav H. Dave & Smt. Amiben G. Dave on 02.0.2018 to attend in this office on 07.05.2018 at 11:00 AM & 11:30 AM but they did not attend in this office on time given in summons. 38 07/05/18 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Shri Gaurav H. Dave & Smt. Amiben G. Dave on 07.0.2018 to attend in this office on 14.05.2018 at 11:00 AM & 11:30 AM but they did not attend in this office on time Page 11 of 35

C/SCA/284/2019 JUDGMENT given in summons. 39 14.05.2018 Summons was sent on 14.05.2018 for appearance of Dr. Hinesh Acharya, MD Physician of Parekhs Hospital to personally attend the office. 40 25.09.2018 Valuation report received from the DVD-1, Ahmedabad in the case of open plots in Vibrant Villa, Village Manipur, TA Sanand. 41 16.10.2018 Order under Section 220(2) passed-(P/177) 42 23.10.2018 Information to draw Recovery certificate in Form 57 in the case of M/s Shivam Water treaters Pvt. Ltd. for recovery of outstanding demand of Rs.16,55,78,464/including interest u/s 220(2) of the I.T. Act, 1961 of Rs.3,70,86,487l(upto 16.10.2018) for A.Y. 2010-11 was received from the A.O. i.e. DCIT, Circle 4(1)(1), Ahmedabad. 43 29.10.2018 A public notice was published in daily news papers on 29.10.2018 regarding any objection proposing auction open plots in Virbant Villa, Village Manipur, TA Sanand. 44 29.10.2018 ITCP-17 notice for setting a sale proclamation for plot No.7,45,48 of Vibrant Villa, Village Manipur, TA Sanand issued and served upon the assessee 30.10.2018 through affixure and E-mail. 45 02/11/18 Letter received from Hema Shah Insolvency Resolution Professional regarding Initiation of CIRP in respect of Shivam Water Treaters Pvt. Ltd. 46 20.11.2018 I.T.C.P. 17 issued on 20.11.2018 for Plot No. Page 12 of 35

C/SCA/284/2019 JUDGMENT 4 to 9, Meghansh Woods, Village Chekhla, TA Sanand. 47 20.11.2018 ITCP 17 Notice for setting a sale proclamation was issued on 20.11.2018 and served upon the assessee on 05.12.2018 by affixture and E-mail. 48 28.11.2018 Advertisement for proclamation for sale of immovable property i.e. Vibrant Villa, Village Manipur, TA Sanand published in daily news papers on 30.11.2018 and auction proposed on 20.12.2018. 49 30.11.2018 Form F (regarding submission of claim/proof of claim by creditors) was submitted before the Interim Resolution Professional (C.A. Hema Manoj Shah, Insolvency Resolution Professional) 50 04/12/18 I.T.C.P.-17 Notice for setting a sale proclamation for Plot No.10 & 11, Meghanshwood, Village Chekhla, TA Sanand. 51 04/12/18 ITCP-1/Form 57 dated 04.12.2018 for a sum of Rs. 3,70,86,487linterest u/s 220(2) of the I.T. Act, 1961 upto 16.10.2018 was issued and served through affixure on 05.12.2018 upon the assessee. (P/ 181) 52 05/12/18 Public Notice issued in daily news papers published on 06.12.2018 regarding if any person he/she has objection with regard to auction proposed for Plot No.4 to 11, Meghanswoods, Village Chekhla, TA Sanand. 53 06/12/18 Intimation regarding public auction to be held on 20.12.2018 was sent to Shri Gaurav H. Page 13 of 35

C/SCA/284/2019 JUDGMENT Dave & Smt. Amiben G. Dave. 54 14.12.2018 Special Civil application No. 19670 of 2018 & 19672 of 2018 were filed by the Shri Gaurav H. Dave & Smt. Amiben G. Dave respectively wherein following grounds were raised, as under

: 1. Non allowance of 30 days time from the date of notice proclamation of sale in I.T.C.P. as per Rule 55 of Second Schedule of Income Tax, 1961. 2. Auction and sale of immovable property should be complete within 3 years from the end of financial year when the demands under question become conclusive or final, as per Rule 68B of Second Schedule of Income Tax Act, 1961. 3. Proclamation must be in vernacular language i.e. Gujarati in the case was not done, as per Rule 38 of Second Schedule of Income Tax Act, 1961. 55 19.12.2018 ITCP-16 attachments of immovable properties were issued on 19.12.2018 for Vibrant Villa, Village

Manipur,

Sanand

& Meghanshwood,

Village

Chekhla,

TA Sandand.(P/38) 56 20.12.2018 ITCP-17 notice for setting a sale proclamation was issued on 20.12.2018 and served upon the assessee through Speed Post and mail. (P/43) 57 21.12.2018 Advertisement for proclamation of sale of Page 14 of 35

C/SCA/284/2019 JUDGMENT Immovable property in daily news paper on 22.12.2018 were published and auction for the open plots in vibrant Villa, Village Manipur, TA Sanand proposed on 22.01.2019. (P/44) 9. Thus, the writ applicant is aggrieved by the action of the revenue department putting the attached properties for sale by issue of proclamation for the purpose of recovery of the tax amount due and payable by the Company, in which, the writ applicant is one of the Directors. As noted above, an order under Section 179 of the Act also came to be passed by the Assessing Officer. The order passed under Section 179 of the Act attained finality. The same was not challenged by the writ applicant at any point of time. Submissions on behalf of the writ applicant: 10. Mr. Bhati, the learned counsel appearing for the writ applicant vehemently submitted that the time limit for sale of the attached immovable property having been elapsed, the property should be released from attachment. To fortify his submission, Mr. Bhati has placed reliance on Rule 68B of the Second Schedule to the Act, 1961. According to Mr. Bhati, no sale of immovable property is permissible after the expiry of three years from the end of the financial year, in which, the order, giving rise to a demand of any tax, has become conclusive in terms of the provisions of Chapter- XX. According to Mr. Bhati, the notice under Section 143(1) of the Act which came to be issued upon the writ applicant should be construed as an order for the purpose of Rule 68B, giving rise to a Page 15 of 35

C/SCA/284/2019 JUDGMENT demand of tax and the same having become conclusive in terms of the provisions of Chapter-XX, it is not open now or rather permissible in law for the department to put the attached immovable properties for sale. The second submission of Mr. Bhati is that the order passed under Section 143(1) of the Act should be construed as the order for the purpose of Rule 68B, giving rise to a demand of any tax having become conclusive in terms of the provisions of Chapter-XX because pursuant to such order, further orders of attachment were passed. To put it in other words, according to Mr. Bhati, the attachment order came to be passed not pursuant to the final order passed under Section 143(3) of the Act, but under Section 143(1) of the Act. The third submission of Mr. Bhati is that the order under Section 143(1) of the Act could be said to have become conclusive in terms of the provisions of Chapter-XX because although the writ applicant preferred an appeal before the CIT (A) against the final order of assessment passed under Section 143(3) of the Act, the liability to pay the tax, as determined under Section 143(1) was not questioned in the said appeal. To put it in other words, the appeal was preferred on various other counts and, ultimately, the said appeal before the CIT (A) failed and was ordered to be dismissed. Against the order passed by the CIT (A), the appeal now is pending before the Income Tax Appellate Tribunal. In such circumstances, referred to above, according to Mr. Bhati, now there is no scope for the department to put the attached immovable property for sale as the time period has expired as prescribed under Rule 68B of the Second Schedule to the Act. 11. Mr. Bhati also thought fit to tender his submissions in Page 16 of 35

C/SCA/284/2019 JUDGMENT writing. The written submissions are as follows: “As the sale of Plot No.7, Vibrant Villa (attached property) of the Petitioner could not take place within three years from the end of the Financial year in which the order(s) giving rise to demand (of any tax, interest etc.) become final, the impugned attachment order [Page No.34 to 37] may be vacated in view of the provisions of Rule 68B(4) of the Second Schedule to the Income Tax Act, 1961 because of the following: 1. The attachment of the above property was made [ITCP-16 dated 01.03.2012 & 19.12.2018-Page Nos. 34 & 36] pursuant to the ‘demands’ [ITCP-l dated 14.10.2011, 29.11.2011 & 04.12.2018 Page Nos. 98, 100 & 177] raised from following three ‘orders’ only and not against the order u/s 143(3) for the A.Y.2010-11 dated 18.03.2013: (a) Intimation u/s 143(1) dated 11.04.2011 for the A.Y.2010-11 raising demand of Rs.8,71,86,512/-, which remained unchallenged under Chapter XX and hence became ‘final’ during F.Yr.2011-12 and (b) Assessment Order u/s 143(3) for the A.Yr.2008-09 dated 14.12.2010 thereby creating demand of Rs.7,25,920/-, the above Assessment Order was also not challenged by the assessee company as provided under Chapter XX to the Act and hence ‘final’during the F.Yr.2010-11. (c) Order u/s 220(2) dated 16.10.2018 [Page No. 173 to 176] quantifying consequential ‘Interest’ in respect of order issued u/s 143(1) dated 11.04.2011 as mentioned In original ITCP-1 dated 14.10.2011 & 29.11.2011. Word ‘order' has not been defined In the Income Tax Act, 1961. As per Black's Law Dictionary ‘order’ means a command, direction or Instruction. Here Impugned Intimation was a command to the assessee company to pay Rs.8.71 crores. Moreover, an Intimation is an order u/s 246 and 246A of the Income Tax Act, 1961. Further, recently Hon’ble DeIhI High Court in the case of Epcos Electronic Components S.A. v/s Union of India [2019] 107 taxmann.com 227 (Del) after distinguishing judgement of Page 17 of 35

C/SCA/284/2019 JUDGMENT the Hon'bIe Supreme Court In the case of Rajesh Jhaveri Stock Brokers Private Limited has held that an ‘intimation’ is subject to ‘revision’ u/s 264 which is also part of Chapter XX of the Income Tax Act, 1961. 2. Thus, no sale of the above property shall be made after 31.03.2015 and the above attachment orders are liable to be vacated. 3. Regarding Rule 68B two aspects need to be considered by the Hon'ble Court: I. “... order giving ‘RISE' to a demand of any tax ...” II. “... become conclusive under the provisions of section 245-1 or, as the case may be, ‘FINAL' in terms of the provisions of Chapter XX:" 4. In the case of the petitioner, the order which gives rise to the demand of Rs. 8.71 crores is order u/s 143(1)(a). It Is contended by the respondent that the order u/s 143(1) (a) merges with the order u/s 143(3) post scrutiny assessment. But, the fact remains that the demand of Rs.8.71 crore in question was originally raised vide order u/s 143(1)(a). In order to determine, when the order giving rise to demand of Rs. 8.71 crores became final, kindly refer to section 220(2) of the IT Act. As per section 220(2) the interest on the amount of Rs.8.71 crores has been charged after 30 days from the date of the issue of order u/s 143(1) and not from the date of the order u/s 143(3), as evident from the order u/s 220(2) dated 16.10.2018 [Page No.174] This clearly shows that the demand was raised u/s 143(1). If the contention of the respondent regarding merger of the orders is to be accepted, the interest on the amount in question should have been charged from the date of the order u/s 143(3). 5. The petitioners thereafter never filed an appeal u/s 246A of the I.T. Act, 1961 (Chapter XX) against the order u/s 143(1)(a) due to which the said order became final for the purpose of Rule 68B of the Second Schedule to the Income Tax Act, 1961. 6. Answering to Para-1 of the Synopsis filed by the respondents, section 156 of the IT Act creates a deeming fiction that the intimation u/s 143(1) shall be deemed to be ‘demand notice’. Furthermore, a demand notice Page 18 of 35

C/SCA/284/2019 JUDGMENT cannot be issued by the department in absence of an ‘order’ raising the said demand, reliance is placed on the Hon’ble Bombay High Court’s decision in the case of Rasiklal Amritlal Doshi vs. A Nundy [42 ITR 35 (Bom)]; which further supports the petitioner's contentions that intimation u/s 143(1)(a) for this purpose is an ‘order'. 7. Answering to Para 2 of the respondent’s synopsis; the assessment order u/s 143(3) [Page No. 123] does not even whisper about the unpaid self-assessment tax. The said assessment order merely takes Rs.21,50,24,470/- as the base for making additions and disallowances. The demand which came to be raised through the said order should only be with regard to the 10 additions and disallowances made therein. Further, kind attention is drawn to Section 3(1)(a) of The Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 [enclosed herewith] wherein, It is clearly laid down that in any proceedings, if the government dues are enhanced, the taxing authority shall serve upon the assessee another notice of demand only in respect of the amount by which such government dues are enhanced. Further, Section 3(3) of the above Act also states that this section shall have effect notwithstanding any judgement, decree or order of any court, tribunal or other authority. A plain reading of this clearly lays down the fact that the demand notice issued pursuant to the order u/s 143(3) of the IT Act, 1961 should only raise the demand which was enhanced by the said order i.e. only the demand which arose out of the additions and disallowances made in the order. The demand notice issued pursuant to the order u/s 143(3) consisting of the amount of Rs.8.73 crores is illegal and nullity. Therefore, the demand of Rs. 8.73 crores stood final, when no appeal was filed u/s 246 of the IT Act and the contention of the respondent that the order u/s 143(1) would merge with order u/s 143(3) would not help their case. 8. Answering to Para 4 of the respondent’s synopsis; the Ld. Counsel for the respondent has deliberately mis- stated facts before the Hon’ble Court by stating that the attachments were provisional attachments u/s 281B of the IT Act. The provisional attachments can only be made by the ‘Assessing Officer', while in this case the attachments were made by the ‘Tax Recovery Officer' as can

seen

from

the

records

[Page Page 19 of 35

C/SCA/284/2019 JUDGMENT No. 34 & 36 of the petition]. If the said attachments were indeed ‘provisional’ attachments as claimed, the respondent has not brought on record any order provisionally attaching the property passed by the Assessing Officer. Neither have they filed any approval by the Principal Chief Commissioner, which is a mandatory condition u/s 281B before provisionally attaching the property. Most importantly, section 281B(2) states that the provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order. Under the proviso of this section the period of provisional attachment can be extended but again the compliance of mandatory conditions laid down therein have not been brought on record. 9. Answering to para 5 of the respondent's synopsis; the judgements in the cases of Rajesh Jhaveri stock broker and Zuari Estate Development will not apply as the above judgements were in the context of re-opening of assessment and for that purpose alone the court has said that the intimation u/s 143(1) of the IT Act is not an ‘Assessment Order'. ‘Order' is a much wider term than ‘Assessment Order’ and therefore, it cannot with any stretch of imagination be construed that the Supreme Court meant that the intimation u/s 143(1) is not an order. In this connection, judgement of the Delhi High Court in the case of Epcos Electronics Components S.A. v/s UOI (2019) 107 taxmann.com 227 (Del) may kindly be referred to. 10. In pursuance to Para 6; vide the case of EPCO Electronic Components SA vs. Union of India, it is clearly seen that a revision can be made u/s 264 of the IT Act. Revision can only be made against some ‘order'. Therefore, intimation u/s 143(1) is an order. Moreover, heading of section 246A of the IT Act reads as “Appealable orders before Commissioner (Appeals)”. The section further classifies the intimation u/s 143(1) of the IT Act to be an ‘order’ an appeal against which would lie before the Commissioner (Appeals). 11. In pursuance to Para 8; the contention of the respondent that the time limit of three years has not even started would destroy principle of equity. On one hand, the respondent has already attempted and failed Page 20 of 35

C/SCA/284/2019 JUDGMENT twice in auctioning off the properties of the petitioner in pursuance to the demand raised vide order u/s 143(1) of the IT Act and on the other hand it Is claiming before the Court that the Limitation period of three years has not even commenced. When an auction to recover the tax dues has been Initiated pursuant to some order raising demand, under no circumstances can It be said that the limitation period has not commenced. The purpose of the Limitation Act or in this case insertion of Rule 68B is to bring an end to litigation after a particular time so that a sword is not kept hanging over a litigant's head. The contention of the respondent if accepted, would defeat the purpose of Rule 68B. 12. In pursuance to Para 9; section 179 is not an appealable order under Chapter XX as per the condition laid down in Rule 68B. Further, order u/s 179 merely shifts liability from the Company i.e. M/s Shivam Water Treaters Private Limited to its Directors i.e. the petitioner (Smt. Amiben Dave). In this connection, kindly refer to the judgement of Hon’ble P & H High Court In the case of S. Basant Singh v/s TRO 233 ITR 508 (P & H). Therefore, limitation period mentioned under Rule 68B would not initiate from this order. Moreover, If the contention of the respondent is accepted, the respondent can keep issuing order u/s 179 to beat the limitation period.

13.In pursuance to Para 10; order u/s 220(2) again Is not an appealable order under Chapter XX as per the condition laid down in Rule 68B. Section 220 of the IT Act quantify Interest, If the demand is not paid within 30 days from the order u/s 143(1). It is after 30 days of the Issue of demand notice the Interest is chargeable. Passing of an order u/s 220(2) merely calculates the interest payable by the petitioner. This order is generally passed for the convenience of the assessee to intimate him about the exact dues. Moreover, if the contention of the respondent is accepted, the respondent can keep issuing order u/s.220(2) to beat the limitation period in every case.” Submissions on behalf of the Revenue: 12. Mr. Bhatt, the learned senior counsel appearing for the revenue submitted that the document at page-41 of the paper- Page 21 of 35

C/SCA/284/2019 JUDGMENT book is only an acknowledgment of the return filed by the Shivam Water Treaters Private Limited. No variation/prima facie adjustment were made to the income returned by the assessee. In that view of the matter, it cannot be treated as an “order giving rise to a demand of any tax, interest, fine, penalty or any other sum...” for the purposes of Rule 68B of the Second Schedule to the Act. Since the returned income came to be accepted, there was no question of issuing any demand notice under Section 156 of the Act. 13. In the instant case, after Section 143(1) acknowledgment, the regular assessment took place under Section 143(3) of the Act. The returned income has been taken as the base and further additions have been made by the A0. As against the returned income of Rs.21,60,24,470/-, ten more additions were made and the total assessed income was arrived at Rs.40,93,10,902/- and thereupon the demand came to be raised. It is thereupon that demand notice and challan came to be issued. 14. The scrutiny assessment under Section 143(3) came to be challenged before the CIT(A). 15. In the interregnum i.e. between the acknowledgment under Section 143(1) and passing of the scrutiny assessment under Section 143(3), to protect the interest of the revenue, attachment order came to be passed, which as such is nothing but an attachment under Section 281B r/w Rule 48 of the second schedule. 16. It is submitted that in view of the decision of the Supreme Court in the case of Rajesh Jhaveri stock brokers (P) Ltd Page 22 of 35

C/SCA/284/2019 JUDGMENT reported in 291 ITR 500 as affirmed/followed in Zuari Estate Development & Investment Co. Ltd (373 ITR 661), the acknowledgement under Section 143(1) cannot be treated to be an order. 17. The decision relied upon by the writ applicant in the case of EPCO Electronic Components SA v. Union of India [(2019) 107 Taxmann. Com 227(Delhi)] is not applicable. That was a case where against an intimation under Section 143(1)(a), the Commissioner refused to exercise his revisionary powers under Section 264 of the Act. It is in that context that the Delhi High Court in paras 13 to 17 held that the revision petition under Section 264 of the Act would be maintainable vis-a-vis an intimation under Section 143(1) of the Act. In that case, the petitioner’s contention was that he had made a mistake while filing the return and had computed the tax liability which it was not required to pay. This view would be fortified even on perusal of Section 246A(1)(a) of the Act. Under the said provisions, an appeal would be maintainable to the Commissioner (Appeals) against an intimation under sub- section(1) of Section 143 where the assessee objects to making of adjustment. Where the assessee objects to the liability, the appeal would be maintainable treating the same to be an order which also is the purport of revision under Section 264 of the Act. As against the same, in the instant case, there is no objection raised by the assessee against the intimation and therefore, it cannot be construed to be an order, for the purpose of Rule 68B of 2nd Schedule to the Income Tax Act. 18. In the instant case, eventually, the intimation under Page 23 of 35

C/SCA/284/2019 JUDGMENT Section 143(1) of the Act stood merged with the scrutiny assessment under Section 143(3) of the Act. 19. In the instant case, the order under which the demand is sought to be recovered had admittedly not become conclusive and therefore, in fact, three years limit itself has not started. 20. Furthermore, order dated 27.12.2017 passed under Section 179 of the Act also provided for the recovery of dues from the writ applicants and time limit as enumerated in the Rule 68B of the Second Schedule has not elapsed. 21. In any view of the matter, Section 220(2) demand has not become final and conclusive, for which a separate order dated 16.10.2018 has been passed.

C/SCA/284/2019 JUDGMENT Section 143(1)(a) can be treated as an order giving rise to a demand for the purpose of the applicability of Rule 68B in the Second Schedule of the Act? (ii) Whether an intimation under Section 143(1) of the Act is deemed to be a notice of demand of tax under Section 156 of the Act? (iii) Whether an intimation under Section 143(1) (a) of the Act can be equated with an assessment framed under Section 143(3) of the Act? (iv) Whether the phrase “order giving rise to a demand” in Rule 68B of the Second Schedule in the Act should be construed as a final assessment order under Section 143(3) of the Act? 26. Before adverting to the rival submissions canvassed on either side, we must look into Rule 68B of the Second Schedule to the Act. Rule 68B reads as under: "Time limit for sale of attached immovable property. 68B (1) No sale of immovable property shall be made under this Part after the expiry of three years from the end of the financial year in which the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX. Provided that where the immovable property is required to be re-sold due to the amount of highest bid being less than the reserve price or under the circumstances mentioned in rule 57 or rule 58 or where the sale is set aside under rule 61, the aforesaid period of limitation for Page 25 of 35

C/SCA/284/2019 JUDGMENT the sale of the immovable property shall stand extended by one year. (2) In computing the period of limitation under sub-rule (1), the period (i) during which the levy of the aforesaid tax, interest, fine, penalty or any other sum is stayed by an order or injunction of any court; or (ii) during the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or (iii) commencing from the date of the presentation of any appeal against the order passed by the Tax Recovery Officer under this Schedule and ending on the day the appeal is decided. shall be excluded : that where immediately after the exclusion of the aforesaid period, the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be deemed to be extended accordingly. (3) Where any immovable property has been attached under this Part before the 1st day of June, 1992, and the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has also become conclusive or final before the said date, that date shall be deemed to be the date on which the said order has become conclusive or, as the case may be, final. (4) Where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this rule. " 27. Rule 68B of the Second Schedule to the I.T. Act, thus, makes it obligatory on the part of the revenue to complete the sale of the immovable property attached by it for recovery of any tax, interest, fine / penalty or any other sum within the period prescribed therein. In other words, the sale of the Page 26 of 35

C/SCA/284/2019 JUDGMENT immovable property attached for the recovery of any tax, interest, etc. cannot be held after the expiry of the period of limitation prescribed under Rule 68B and if the sale is not completed within the prescribed period therein, the attachment if any levied on the property is liable to be vacated. 28. Rule 68B was introduced in the Second Schedule to the I.T. Act by Finance Act, 1992 specifically with a view to prescribe the time limit of three years for sale of the attached immovable properties. The proviso to Rule 68B (1) provides for extension of one more year in certain cases where the sale falls through. In other words, if the sale held within the period of three years could not be completed for some reason set out therein, then, under the proviso to rule 68B(1) extension of one more year is available for effecting the sale. Rule 68B(2) provides for exclusion of the period during which the demand is stayed by any Court. 29. The period of limitation under Rule 68B(1) for sale of the attached property commences from the date on which the demand of any tax interest, fine, penalty or any other sum for the recovery of which the immovable property has been attached has become conclusive under the provisions of section 245 I or under the provisions of Chapter XX of the I.T. Act. 30. We find it extremely difficult to take the view that the intimation or an acknowledgment under Section 143(1) of the Act should be construed as an order giving rise to a demand Page 27 of 35

C/SCA/284/2019 JUDGMENT for the purpose of the applicability of Rule 68B. Under the Income Tax Act, the tax, as such, becomes due and payable only when an assessment order is passed and a liability is created followed with a demand notice under Section 156 of the Act. 31. In Kalyankumar Ray vs. CIT, reported in (1991) ITR 634, the Supreme Court has held as under: "Assessment" is one integrated process involving not only the assessment of the total income but also the determination of the tax. The ITO has to determine, by an order in writing, not only the total income by also the net sum which will be pay able by the assessee for the assessment year in question and that the demand notice under s. 156 has to be issued in consequence of such an order. The statute does not, however, require that both the computations (i.e., of the total income as well as of the sum payable) should be done on the same sheet of paper, the sheet that is super scribed "assessment order". It does not prescribe any form for the purpose. It will be appreciated that once the assessment of the total income is complete with indications of the deductions, rebates, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally time- consuming. If, therefore, the ITO first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the ITO that the process described in s. 143(3) will be complete.” 32. The learned counsel appearing for the writ applicant vehemently submitted that the proviso to Section 156 of the Act makes it abundantly clear that where any sum is determined to be payable by the assessee under sub-section Page 28 of 35

C/SCA/284/2019 JUDGMENT (1) of Section 143, the intimation in that regard is deemed to be a notice of demand for the purposes of Section 156 of the Act. 33. At this stage, we may refer to a decision of the Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Ltd (supra). In the said case, the Supreme Court observed as under: “In the scheme of things, as noted above, the intimation under Section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under Section 143(1)(a) as it stood prior to 1-4- 1989, the assessing officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the legislature i.e. to minimise the departmental work to scrutinise each and every return and to concentrate on selective scrutiny of returns. These aspects were highlighted by one of us (D.K. Jain, J.) in Apogee International Ltd. v. Union of India, (1996) 220 ITR 248. It may be noted above that under the first proviso to the newly substituted Section 143(1), with effect from 1-6-1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under Section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any assessing officer, but mostly by ministerial staff. Can it be said that any “assessment” is done by them? The reply is an emphatic “no”. The intimation under Section 143(1)(a) was deemed to be a notice of demand under Section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no Page 29 of 35

C/SCA/284/2019 JUDGMENT assessment under Section 143(1)(a), the question of change of opinion, as contended, does not arise.” 34. The dictum as laid in the aforesaid decision of the Supreme Court is that the expressions intimation and assessment order are mutually exclusive. Assessment is used as meaning sometimes “the computation of income; sometimes “the determination of the amount of tax payable” and sometimes “the whole procedure laid down in the Act for imposing liability upon the tax payer”. It is in this context that the Supreme Court took the view that the intimation under Section 143(1)(a) cannot be treated to be an order of assessment. 35. The very same argument as canvassed by the learned counsel appearing for the writ applicant before this Court was canvassed before the Delhi High Court in the case of Apogi International Limited vs. Union of India, Income Tax Officer, reported in 1996 (220) ITR 248. Apogi International Limited (Supra) has also been referred to in Rajesh Jhaveri (supra). Justice D.K. Jain (as his Lordship then was), speaking for the Bench, observed as under: “We are also not impressed with the submission that an intimation has to be treated as a conclusion of the assessment process merely because the intimation under s. 143(1)(a)(i) is by itself deemed to be a notice of demand issued under s. 156 of the Act, after completion of assessment proceedings for a particular assessment year. From the scheme of the new assessment procedure it is obvious that the purpose for which the said fiction has been created in sub-s. (1)(a)(i) of s. 143 to treat the intimation as a notice of demand under s. 156 is to make the machinery provision of recovery of tax applicable to the recovery of tax assessed in terms of the said sub- section and nothing more. By the fiction so created, all Page 30 of 35

C/SCA/284/2019 JUDGMENT incidents of a notice of demand shall become applicable even to that intimation even though no regular recovery notice of demand in the prescribed form under s. 156 is served on an assessee, which otherwise is mandatory to enforce any recovery of tax or interest on an assessee.“ 36. We are of the view that the phrase “order giving rise to a demand” in Rule 68B should be construed as the final assessment order, determining the tax liability of the assessee with interest, fine, penalty or any other sum. With the commencement of the proceedings under Section 143(2) of the Act, the intimation under Section 143(1)(a) of the Act, which in the absence of the proceedings under Section 143(2) read with Section 143(3) would have taken the shape of regular assessment. But once the proceedings commenced under Section 143(3), the intimation under Section 143(1)(a) remains an intimation only of self-assessment with prima facie adjustments, if any, made by the Assessing Officer and becomes adjustable as per the regular assessment. The initial intimation under Section 143(1) of the Act, which according to the learned counsel appearing for the assessee, should be understood as an order giving rise to a demand for the purpose of Rule 68B merges into the regular assessment and once the proceedings for the regular assessment under Section 143(3) is commenced, there cannot be any recourse to bring into existence any order under Section 143(1)(a) of the Act. (See Commissioner of Income Tax vs. Udaipur Distillery Company Ltd., reported in 2004 (267) ITR 358) 37. We may refer to a decision of the Madhya Pradesh High Court in the case of Kamal Textiles vs. Income-Tax Officer, reported in 1991 (189) ITR 339, wherein it has been held as Page 31 of 35

C/SCA/284/2019 JUDGMENT under: “A reading of Clause (i) to Sub-section (l)(a) of Section 143 makes it clear to us that the giving of intimation in terms of that provision is "without prejudice" to the provisions of Sub-section (2). This expression/phrase is normally used in negotiation of compromise or offers to settle differences cause pacis in order to guard against any waiver of right should they be ineffectual and go off. Thus, where parties in the court agreed that the cause should "stand adjourned and without prejudice to either of the parties" it would only mean that no harm should result to the rights to either of the parties by reason of his consent to the adjournment at that time. Thus understood, in the present context, the expression shall mean only that an intimation sent to the assessee specifying the sum payable by him in terms of that sub- section, although technically a demand issued under Section 156, shall nevertheless not preclude the operation of the provisions of Sub-section (2). By force of this expression as inserted in Sub-section (1)(a)(i), the right of the assessing authority to proceed under Subsection (2) of Section 143 despite intimation to the assessee of the sum payable by him as tax or interest is not taken away. That right is clearly saved and is not in any way curtailed or hampered by the giving of the intimation. It may be noticed that the section has been recast and one of the main changes brought about is that, under Section 143(1), a regular assessment order as such is not to be passed. Power to make an adjustment in terms of its proviso can be invoked only when the claim is prima facie inadmissible, that is, it should be clear or self-evident. A decision on a debatable issue is not envisaged. On the contrary, when proceedings are taken under Section 143(2), it partakes of the nature of a regular assessment and the assessing authority should pass an order under Section 143(3). Shri Nema also urged that because the intimation is deemed to be a notice of demand of tax under Section 156 of the Act, the proceedings for assessment should be taken as complete in all respects, subject of course to the assessment being reopened in terms of Section 147. This contention also is devoid of any substance. The intimation under Section 143(1)(a)(i) is only fictionally taken as a notice of demand under Section 156. Like all Page 32 of 35

C/SCA/284/2019 JUDGMENT other fictions, to understand the meaning of this fiction so created here, one must look to its purpose. It is only thereafter that the court has to assume all facts and consequences which are incidental or an inevitable corollary to the giving effect to the fiction. One must be cautious to see that the fiction is not extended beyond the purpose for which it is created. See CIT v. Vadilal Lallubhai [ 1972] 86 ITR 2 (SC). The apparent purpose of the fiction so created here to treat the intimation as a notice of demand under Section 156 is to make the machinery provision of recovery of tax applicable to the recovery of tax assessed in terms of Section 143(1)(a)(i) and nothing more. A notice of demand under Section 156 is to be served in the prescribed form. The intimation under Section 143(1)(a)(i) is not in any such prescribed form. Nevertheless, by the fiction so created, all incidents of the notice of demand shall become applicable even to that intimation, for any statutory fiction must be carried to its logical conclusion. Such being the limited purpose of the fiction, it is difficult to accept the contention that, on issuance of such intimation, the assessment proceedings can be reopened only in terms of Section 147 and the authority is not entitled to proceed under Sub-section (2) of Section 143. We are also not impressed with the argument of learned counsel that the issuance of intimation under Sub-section (1)(a)(i) of Section 143 is final because no appeal is provided against the demand of the amount of income- tax or interest. This contention overlooks the fact that even if not appealable, it is clearly revisable. However, as we have noticed above, the assessment made in proceedings under Section 143(2) shall, for all purposes, be an assessment of tax made under Section 143(3) and, in that event, shall be appealable under Section 246(1) (a) of the Act. “ 38. We may also refer to a decision of this High Court in the case of CIT vs. Himgiri Foods Ltd., reported in 2011 (333) ITR 508, wherein it has been held as under: “On a plain reading of Section 143(1B) it is apparent that the provision mandates that if after the issuance of intimation, a revised return is furnished by an assessee under Sub-section (5) of Section 139, it is incumbent Page 33 of 35

C/SCA/284/2019 JUDGMENT upon the assessing officer to process the revised return and amend the intimation issued under Section 143(1)(a) on the basis of the revised return. At this stage, there is no question of going into the validity of the return filed under Section 139(5) of the Act, If the revised return is filed within the prescribed period of limitation. An intimation under Section 143(1)(a) of the Act cannot be equated with an assessment framed under Section 143(3) of the Act and the assessing officer cannot refuse to process the revised return and modify the intimation in accordance with Section 143 (1B) of the Act.” 39. Thus, in view of the aforesaid, we hold that the phrase “order giving rise to a demand” in Rule 68B to the Second Schedule of the Act should be read as the assessment order under Section 143(3) of the Act and not merely an acknowledgment or an intimation under Section 143(1) of the Act. 40. Having taken the aforesaid view, the period of limitation will have to be counted accordingly. It is not in dispute that against the final order of assessment under Section 143(3) of the Act, an appeal was preferred by the writ applicant before the Commissioner (Appeals), which came to be dismissed and, as on date, an appeal is pending before the Income Tax Appellate Tribunal. In such circumstances, it cannot be said that the order became conclusive. The period of limitation would reckon only from the date, the order becomes conclusive. The word “conclusive” has been explained by the Bombay High Court in the case of Rajiv Yashwant Bhale vs. Principal Commissioner of Income-tax & Ors., reported in (2008) 401 ITR 408 (Bom). In para-76, it has been observed as under: “In any event, the word "conclusive" itself has to be Page 34 of 35

C/SCA/284/2019 JUDGMENT understood in the context. It means "bring or come to an end". In Advanced Law Lexicon, 3rd Edition Reprint 2007, this word is understood as final, finishing, ending. The word "conclusive" means the closing, settling or finally arranging of a treaty, contract, deed etc. It is in that sense the word has been understood and must be, therefore, given that meaning.” 41. For the foregoing reasons, both the writ applications fail and are hereby rejected. (J. B. PARDIWALA, J) (A. C. RAO, J) Vahid Page 35 of 35