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Income Tax Appellate Tribunal, ‘C‘ BENCH
Before: SHRI M.BALAGANESH & SMT. KAVITHA RAJAGOPALShri Prakashan Ayyappan
आदेश आदेश / O R D E R आदेश आदेश
PER M. BALAGANESH (A.M):
This appeal in for A.Y.2010-11 arise out of the order by the Ld. Commissioner of Income-tax (Appeals)-1, Thane dated 09/03/2017 (ld.CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 29/03/2014 by the ld. Income-tax Officer, Ward.2(4), Thane (hereinafter referred to as ld. AO). 2. The following grounds have been raised by the assessee:-
2 Shell Information Technology International B.V. “1) In the facts and the circumstances of the case and in law, the learned Commissioner of Income Tax(A) erred in confirming the order passed u/s 143(3) r.w.s 147 by ignoring various detailed written submissions and case laws submitted by the Appellant during the course of assessment and rejecting the appeal without rebutting the same. 2) In the facts and the circumstances of the case and in law, the learned A.O. erred in passing and the learned Commissioner of Income 'lax(A) erred in confirming the order u/s 143(3) r.w.s 147 although notice u/s 143(2) was not issued to the Appellant even though it is mandatory to pass notice u/s 143(2) as was held in the case of Hotel Blue Moon [321 ITR 362(SC).] Without prejudice to the above and alternatively 1) In the facts and the circumstances of the case and in law, the learned A.O. erred in passing the order u/s 143(3) r.w.s 147 and therefore rendering the whole reassessment bad in law on the basis of borrowed satisfaction, presumption and surmises. 2) In the facts and circumstances of the case and in law. the Assessing Officer erred in disallowing Rs. 37,02,800/- being direct expenses for securing vacant possession from the unauthorized occupants on the land against gross receipts by disregarding the fact that the Appellant has submitted various submissions and evidences in this regard. 3) In the facts and the circumstances of the case and in law. the learned A.O. erred in disallowing brokerage debited u/s 37(1) of the Act amounting to Rs. 14.78.810/- by wrongly treating it as non-genuine expense without verifying the same. 4) In the facts and the circumstances of the case and in law, the learned A.O. erred in disallowing loss incurred on account of loss on land dealings debited u/s 37(1) of the Act amounting to Rs. 2,97,200/- by wrongly treating it as non-genuine expense without verifying the same. 5) In the facts and the circumstances of the case and in law, the learned A.O. erred in adding advances received against land amounting to Rs. 41,06.000/- u/s 68 of the Act. 6) In the facts and circumstances of the case and in law;, the Assessing Officer erred in levying penalty u/s 271(l)(c) and charging interest u/s 234A, B, C & D. 7) In the facts and circumstances of the case and in law. the Commissioner of Income Tax(A) erred in confirming the above additions.”
Though the assessee has raised several grounds of appeal
before us, we find that the assessee had raised the preliminary ground on invalid assumption of jurisdiction vide ground 2 on the ground that notice under section 143(2) was not issued to the assessee at all before framing the assessment. Since this goes to the root of the matter, we deem it fit to address this preliminary ground first.
4. We have heard the rival submissions and perused the materials available on record. We find that assessee is an individual engaged in the business of dealing in lands in the capacity of broker. The assessee filed his return of income for A.Y. 2010-11 electronically on 15/10/2010 declaring total income of Rs.3,82,790/-, which was duly processed under section 143(1) of the Act. Later, information was received by the Revenue stating that assessee had entered into Memorandum of Understanding (MOU) for purchase of 19 plots in Bhayandar from 10 Rackvi family members for a consideration of Rs.13,52,34,112/-. Further, copies of 6 registered agreements dated December, 2009 with regard to sale of 10 plots was also received by the Revenue. In these documents, the assessee was shown as confirming party. Accordingly, the case of the assessee was reopened by the Ld.AO under section 147 of the Act vide issue of notice under section 148 of the Act dated 14/5/2012. The Ld.AO observed that assessee had shown income from partnership firm, M/s Shreyas Construction at Rs.3,76,945/- apart from showing income from the activity of brokerage in land dealings.
5. The Ld.DR furnished the assessment folder in the instant case before the bench at the time of hearing. We physically verified the entire assessment folder and we found that no notice under section 143(2) of the act was ever issued to the assessee after the issuance of notice under section 148 of the Act. In fact, there is a letter from the authorised representative of the assessee dated 07/02/2014 addressed to the Ld.AO enclosing the copy of the original return of income before the Ld.AO. In the said letter, the authorised representative of the assessee had categorically stated under the subject column that the said letter is filed in response to notice under section 148 of the Act dated 14/5/2012. Hence, it is very clear that assessee had indeed filed a letter in response to notice under section 148 of the Act requesting the Ld.AO to treat the earlier return filed as a return in response to notice under section 148. Hence, assessee had duly complied with the notice under section 148 of the Act. Once this is done, it is bounden duty of the Ld.AO to issue notice under section 143(2) of the Act before proceeding to frame the assessment. From the perusal of the entire assessment folder, at the cost of repetition, we would like to state that notice under section 143(2) was never issued to the assessee from 7/2/2014 to 29/3/2014, i.e. date of completion of re-assessment. Moreover, on perusal of the entire assessment folder and the order sheet notings thereon, we also found a reminder letter addressed by the authorised representative of the assessee as well as by the assessee dated 21/7/2016 and 8/2/2016 respectively, seeking information under RTI Act, 2005. The assessee had also sought for inspection of entire assessment records which were duly granted by the Ld.AO. We further found that the authorised representative of the assessee, vide letter dated 10/2/2016 had addressed to Ld.AO that no notice under section 143(2) was issued to the assessee and there is no mention of even issuance of notice under section 143(2) of the Act in the assessment folder and in the order sheet. The assessee also sought this information under RTI Act, which remained unanswered by the Revenue. The said letter dated 10/2/2016 is enclosed at pages 168 to 178 of the paper book filed before us. All these facts collectively go to prove that no notice under section 143(2) of the Act was issued to the assessee in the instant case. Hence, the ratio laid down by the Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon reported in 321 ITR 362 (SC) would certainly come to the rescue of the assessee. For the sake of convenience, the relevant portion of the order is reproduced hereunder:-
“Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with.”
In view of the above, we hold that there was no valid assumption of jurisdiction by the Ld.AO in the instant case and hence, the re- assessment framed by the Ld.AO on 29/3/2014 deserves to be quashed for non issuance of notice under section 143(2) of the Act. Accordingly ground 2 raised by the assessee is allowed.
Since the entire re-assessment is quashed on technical consideration as detailed supra, the other grounds raised
by the assessee need not be gone into and they are left open. No opinion is hereby rendered on these grounds.
8. In the result, appeal of the assessee is allowed.
Order pronounced on 30/10/2022 by way of proper mentioning in the notice board.