Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH “SMC-1”: NEW DELHI
Before: SHRI R.K. PANDA
PER R.K. PANDA, AM
This appeal filed by the revenue is directed against the order dated 25th September, 2017 of the Ld. CIT(A)-1, Noida relating to assessment year 2009-10.
Facts of the case, in brief, are that the assessee is an individual. On the basis of information obtained by the AO as per AIR information that assessee had entered into financial
transaction of Rs. 6,00,598/- for the payment of credit card bills during the financial year 2008-09, information was called for u/s 133(6) of the I.T. Act 1961 to verify the transaction. However, despite number of notices issued by the AO, there was no compliance made by the assessee. In absence of PAN number, information regarding filling of the return for the assessment year 2009-10 and in absence of information about source of this payment the AO initiated proceedings u/s 147 of the Act by recording reasons and thereafter issued notice u/s 148 of the I.T. Act on 8th March, 2016. However, there was no compliance. Even there was no compliance to the subsequent notice issued u/s 142(1) of the I.T. Act. The AO, therefore, completed the assessment u/s 144/147 of the Act determining the total income of the assessee at Rs. 6,00,598/-.
Before Ld. CIT(A), it was submitted that in absence of any notice issued u/s 143(2) of the Act the assessment is null and void.
Based on the arguments advanced by the assessee, the Ld. CIT(A) held that non issuance of notice u/s 143(2) of the Act before framing of an assessment order is defective in law and , therefore, he deleted the addition. He, however, held that the AO 2
may frame the assessment again after complying with due process of law.
Aggrieved with such order of the Ld. CIT(A), the revenue is in appeal before the Tribunal by raising following grounds :
“That the Ld.CIT(A) has erred in law and on facts by annulling the assessment order on the ground that no notice under section 143(2) was issued before the completion of assessment. 2. That the Ld. CIT(A) has erred in law and on facts by ignoring the facts that no return was filed by the assessee in response to notice under section 148 and notice u/s 143(2) is only mandatory, where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142 or in response to notice u/s 148 of the l. T. Act, 1961, whereas in this case no return was filed. 3. That the Ld. CIT(A) has erred in law and on facts by ignoring the fact that as per provision of section 143(2)(ii) there is a time limit for issuance of notice under section 143(2) i.e. shall be served on the assessee before the expiry of six months from the end of the financial year in which the return is furnished, but in the case under consideration no return was filed by the assessee. 4. That the Ld. CIT(A) has erred in law and on facts by annulling the assessment order as on similar issues Hon’ble ITAT, Delhi Bench 'SMC', New Delhi vide order dated 30/10/2017 in ITA No.4310/Del/2017 in the case of Sh. Sachin S/o Late Sh, Bhule Singh Village -Mamura, Sector-66, Pargana & Tehsil - Dadri, Noida ( PAN-APPPK6176F) for A.Y.2008-09 has allowed the appeal of the Revenue. 5. That the Ld. CIT(A) has erred in law and on facts by annulling the assessment order ignoring the fact that assessment order was passed u/s 147/144 and not u/s 143(3) as noted by Ld. CIT(A) in the body of the order. 6. That the Ld. CIT(A) has erred in law and on facts by directing the Assessing officer to reframe the assessment order under the provisions of section 150 of the l.T. Act, 1961 as in the instant case revival of assessment u/s 150 will not be applicable due to the provisions of sub-section [2] of section 150. This is due to the fact that this case pertains to the assessment year 2009-10 and assessment order, which is subject matter of appeal , revision was passed on 10/03/2016. The provision of sub- section (1] of section 150 shall not in this case as action for assessment/ 3
reassessment proceedings would have been barred by time when the assessment order, which was subject matter of appeal, was passed in the light of provisions of sub section (2] of section 150. For clarity section 150 is reproduced as hereunder: “ 150(1): Notwithstanding anything contained in section 149, the notice u./s 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal , reference or revision [ or by a Court in any proceeding under any other law]. (2) The provisions of sub-section(l) shall not apply in any case where any such assessment reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken." 7. That the Ld. CIT[A] has erred in law and on facts by annulling the assessment order ignoring the fact as noted by Hon’ble ITAT, Delhi Bench 'E', New Delhi vide its order in ITA lo. 267/Del./2013 [ A.Y. 2002- 03] in the case of ITO Ward-13(2), New Delhi Vs. M/s Neetee Clothing [P] Ltd., 6/28, Shanti Niketan, New Delhi, in which it has been amply clarified when the provisions of section 150 of the Act may be enacted. In the referred order [supra], it has been explained on this issue as under: "We find that the provisions of sub-section (1) shall not apply where the reassessment proceedings would have been barred by time even at the time when the order, which was the subject- matter of appeal, revision, etc., was passed. In other words, sub- section (2j provides a rider as if in the nature of a proviso to sub- section (1) providing that the provisions of sub-section (1) shall not apply where by virtue of any other provision limiting the time within which action for assessment, reassessment or recomputation may be taken, such assessment, reassessment or recomputation is barred on the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained. It would, thus, mean that an appellate or revision authority cannot give a direction for
assessment or reassessment which goes to the extent of conferring jurisdiction upon the Assessing Officer if his jurisdiction had ceased due to the bar of limitation. If the issuing of a notice for assessment or reassessment for a particular assessment year had become time-barred at the time of the order, which was the subject matter of the appeal, the provisions of section 150(1) cannot be invoked for making an assessment or reassessment.” 8. That the appeal is preferred as per para 8(a) of the CBDT Circular No. 21/2015 dated 10/12/2015 notwithstanding the fact that tax effect in this case is below Rs. 10 lakhs. 9. The appellant craves to leave add, alter and amend any of the grounds of appeal on or before hearing. 10. That the order of the Ld. CIT(A) deserves to be set aside and the order of the AO be restored.” 6. I have heard the rival arguments made by both the sides, perused the orders of the AO and Ld. CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions relied on both the sides. I find the AO in the instant case completed the assessment u/s 144/147 of the Act on the ground that the assessee did not respond to the query letter issued u/s 133(6) of the Act, did not respond to the notice issued u/s 148 of the Act and did not comply to the statutory notices issued u/s 142(1) of the I.T. Act. I find the assessee argued before the Ld. CIT(A) that in absence of issue of notice u/s 143(2) the assessment order is null and void. Based on the arguments advanced by the assessee, the Ld.
CIT(A) held that since no notice was issued u/s 143(2) of the Act the assessment order is defective in law and, therefore, he deleted the addition. He however, held that the revenue is protected under the provisions of section 150 of I.T. Act 1961 and he accordingly directed the AO to reframe the assessment order after complying with due process of law. It is the grievance of the revenue that since the assessee has not filed any return of income in the instant case either in response to notice u/s 148 or in response to notice u/s142(1), therefore, the question of issuance of notice u/s 143(2) does not arise. Therefore, annulling the assessment on account of non issuance of notice u/s 143(2) is illegal and not in accordance with law. 7. I find merit in the above arguments made by the Ld. DR. Admittedly the assessee in the instant case has not responded to the notice issued u/s 148 of the Act or to the notice issued u/s 142(1) of the Act and has not filed the return of income. therefore, there is no question of issuance of notice u/s 143(2) of the Act. As per the provisions of Section 143(2), notices can be served on the assessee under the said provision before the expiry of six months from the end of the financial year where a return has been
furnished u/s 139 or in response to notice u/s 142(1). However, when no return was filed, as in the instant case, the question of issuance of notice u/s 143(2) does not arise. Therefore, the order of the Ld. CIT(A) being not in accordance with law is set aside. Since the assessment has been completed u/s 144 of the I.T. Act, 1961 and since the Ld. Counsel for the assessee submitted that the assessee is a salaried employee and given an opportunity, he can explain the credit card payments, therefore, considering the totality of the fact of the case and in the interest of justice, I deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate her case and decide the issue as per fact and law. I hold and direct accordingly. Grounds raised by the revenue are accordingly allowed for statistical purposes.
In the result the appeal filed by the revenue is allowed for statistical purposes.
Order pronounced in the Open Court on 3rd March, 2021.
Sd/- (R.K. PANDA) ACCOUNTANT MEMBER Dated: 03 /03/2021 Veena 7