PRAVIN TILOKCHAND OSWAL (HUF),,SOLAPUR vs. INCOME-TAX OFFICER, WARD - 1(2),, SOLAPUR

The learned Authorized Representative for the assessee pointed out that ground of appeal No.5 needs to be adjudicated first in order to decide the issue raised in the present appeal. The ground of appeal No.5 reads as under:- “5. Erred in not appreciating the fact that impugned assessment order passed U/sec.143(3) was without issuing notice U/sec.143(2) of the income tax act, and hence results the entire assessment proceedings without jurisdiction and begins so, it has to be annulled as decided by the Hon'ble Supreme Court of India in the case of ACIT Vs. Hotel Blue Moon (reported in (2010) 321 ITR 362 (SC)).”

The assessee is aggrieved by assessment order passed in the status of HUF, whereas proceedings were initiated by issue of notice under section 143(2) of the Act in the name of individual. The learned Authorized Representative for the assessee pointed out that both the individual and HUF were assessed to tax and had different and distinct PAN numbers. The first notice for getting jurisdiction to make the assessment was issued under section 143(2) of the Act in the name of individual and the PAN number of individual was clearly mentioned. However, assessment was made in the hands of HUF. He then said that the order was passed by the CIT(A) ex-parte the assessee. He then referred to information received under the Right to Information Act, wherein it was clearly mentioned that notice was issued for individual and proceedings were carried out for individual. However, the assessment was made in the name of HUF.

The learned Departmental Representative for the Revenue has produced assessment records as per directions of the Tribunal and pointed out that initiation of assessment was on the basis of return of income filed by individual at ₹ 1,06,193/-. When confronted, he fairly admitted that assessment

We have heard the rival contentions and perused the record. The assessee as an individual had furnished return of income on 29.10.2007 declaring total income of ₹ 1,06,193/-, copy of acknowledgement is at page 11 of Paper Book. The assessee had also furnished return of income in the HUF status with different PAN number on 24.03.2008 declaring total income of ₹ 2,59,336/-. The Assessing Officer had picked up the assessment proceedings in the name of Oswal Pravin Tilokchand by issue of notice under section 143(2) of the Act, dated 14.07.2009. In the said notice, PAN number mentioned is AAAPO8641B, copy of which is placed at page 9 of Paper Book. Another notice under section 143(2) of the Act was issued to the assessee on 21.10.2009 with the same name and same PAN number, copy of which is placed at page 10 of Paper Book. The Assessing Officer gets the jurisdiction to assess the income, in case it issues the notice within stipulated time under section 143(2) of the Act. The assessment proceedings were carried out in the case of assessee. Undoubtedly, both as individual and as HUF, the assessee was trading in Kirana and Bhusar, but it was operating from two different gala numbers. The assessment records also reflect the initiation of assessment proceedings based on the return of income filed by individual at ₹ 1,06,193/-. However, the assessment order reflects the assessment to be made in the name of Pravin Tilokchand Oswal in the state of HUF having PAN No.AAAHO5993A. The computation of income is from the total income returned at ₹ 2,59,336/-, which admittedly is the return of income filed by HUF.

The issue which arises is whether such assessment order passed under section 143(3) of the Act in the status of HUF, where assessment proceedings were initiated by issue of notice under section 143(2) of the Act in the hands of individual is sustainable. The answer to the said question is ‘No’. The Assessing Officer gets jurisdiction to carry out assessment proceedings in the case of a person, in case it issues notice under section 143(2) of the Act within stipulated time. In the facts of present case, such notice under section 143(2) of the Act was issued in the hands of individual, which had individually filed the return of income declaring total income of ₹ 1,06,193/- and had distinct PAN number. The assessment records also show the said return of income being the basis for issue of notice under section 143(2) of the Act. However, the Assessing Officer completes the assessment in the hands of HUF, which had filed the return of income declaring total income of ₹ 2,59,336/- of distinct PAN number. The assessment order mentions both the facts; the status of HUF, PAN number of HUF and also returned income of HUF. The assessment thus, completed in the status of HUF against notice issued under section 143(2) of the Act in the status of individual account, makes the assessment invalid. The assessment order passed in the hands of assessee is both invalid and bad in law and the same is quashed. The CIT(A) has decided the issue on merits without going into this aspect of assessment being completed in the wrong status. Further, the CIT(A) mentions that the delay of 2 months cannot be condoned. The assessee in the grounds of appeal itself had asked for condonation of delay and in the smallness of delay, the same merits to be condoned. Accordingly, we hold that assessment order passed in the case is both bad in law and invalid and the same is quashed. The ground of appeal

In the result, the appeal of assessee is allowed.