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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 98/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 98/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke The ITO, Sh. Rajesh Bhatia, Vs. Ward- 2(3), A-84, Atre Path, Shyam Nagar, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACQPB8389K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar (Adv.) jktLo dh vksj ls@ Revenue by : Smt. Seema Meena (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 27/03/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/03/2018 vkns'k@ ORDER
PER: VIJAY PAL RAO, J.M. This appeal by the Revenue is directed against the order dated 20.11.2017 of CIT(A), Jaipur arising from penalty order passed u/s 271 (1)(c) of the Act for A.Y. 2010-11. The Revenue has raised the following grounds:- “1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in concealing the penalty u/s 271(1)(c) on the basis of the ITAT order whereby ITAT has quashed the reopening u/s 148 relying on decision of Sh. Loku
ITA No. 98/JP/2018 ITO vs. Sh. Rajesh Bhatia
Ram Malik v/s CIT ignoring the Hon’ble High Court’s order in Acorus Unitech Wireless (P) Ltd., v/s DCIT 345 ITR 228, MTNA v/s CBDT 246 ITR 172 and Hon’ble Allahaband High Court’s order in the case of CIT v/s Jora Singh 262 215 taxman 424 wherein it was held that AO can initiate reassessment action even when he has not exercised the option to scrutiny notice u/s 143(2)?
We have heard the ld. DR as well as ld. AR and considered the
relevant material on record. At the outset, we note that the assessment
order was quashed by this Tribunal in the quantum appeal vide order
dated 08.11.2017 in ITA No. 551/JP/2014 as held in paras 8 and 9 as
under:-
We have considered the rival submissions as well as relevant material on record. The undisputed facts relevant to issue raised in the additional ground are that the assessee filed return of income on 27.09.2010 which was processed u/s 143(1) on 07.12.2010. Thereafter, the assessee filed revised return of income on 10.09.2011 which was also processed u/s 143(1) on 30.11.2011. The time available for issuing notice u/s 143(2) on the revised return filed by the assessee is upto 30.09.2012 however, AO issued notice u/s 148 on 17.08.2012. Thus, it is clear that the notice issue u/s 148 on 17.08.2012 was prior to the expiry of the time period available to the AO for issuing notice u/s 143(2) on 30.09.2012. 9. There is no quarrel on the point that the jurisdiction of the AO to assess the income u/s 147 is limited and circumstantial in comparison to the jurisdiction under scrutiny assessment u/s 143(3). Therefore, preferring the proceeding for assessment or reassessment u/s 147 by the AO instead of the scrutiny assessment u/s 143(3) would not be prejudicial to the interest of 2
ITA No. 98/JP/2018 ITO vs. Sh. Rajesh Bhatia
the assessee. The Assessing Officer has issued notice u/s 148 instead of issuing notice u/s 143(2) when the time was till available for issuing notice u/s 143(2). But this has not caused any prejudice to the interest of the assessee however, as per view taken by some of the High Courts the proceedings u/s 147 cannot be initiated prior to the termination of assessment pending before the AO. We find that there are divergent views of different High Courts on this issue. The Hon’ble Delhi High Court in case of Acorus Unitech Wireless (P.) Ltd. vs. DCIT (supra) as well as in case of MTNA Vs. CBDT 246 ITR 172 has taken a view that the AO can initiate reassessment action even when he has not exercised the option to the scrutiny notice u/s 143(2). A similar view taken by the Hon’ble Allahabad High Court in case of CIT vs. Jora Singh (supra). However, the Hon’ble Madras High Court in case of CIT Vs. TCP Ltd. (supra) has taken a different view and held that while assessment proceedings remain in inchoate are main in no fresh evidence or material could possibly unearth. if any such material or evidence available there is no restriction or restrain on its being taken into consideration by the AO for framing the regular assessment. It is not permissible under the law that the AO can also travel the path of section 147 to enlarge the time available for framing assessment. The Hon’ble Jurisdictional High Court has also taken a view that if the time is available for issuing the notice u/s 143(2) then the ingredient for issuing notice u/s 148 are not fulfill. Thus where there are divergent views of different High Courts on the same issue the decision of the jurisdictional High Court is binding on this tribunal. Accordingly, we are bound by the precedent of the jurisdictional High in case of Shri Loku Ram Malik Vs. CIT (supra), wherein the Hon’ble High Court after considering the various decisions on this point has held in paras 10, 10.1 to 10.4 as under:- “10 We have heard counsel for the parties. 10.1 Before proceeding with the matter, it will not be out of place to mention that order u/s 143 was confirmed on 11.08.2000 when the return was filed and the notice which is impugned u/s 3
ITA No. 98/JP/2018 ITO vs. Sh. Rajesh Bhatia
148 came to be issued before the assessment could have been done. 10.2 The contention of the assessee that in the notice which has been issued u/s 148, ingredients u/s 148 are not fulfilled, in our considered opinion, when order u/s 143 is passed, the observations which are made in the case of Rajesh Jhaveri (supra) in paras No. 11,12 &13 as reproduced hereinabove would apply. 10.3 The contention raised by the counsel for the appellant is required to be accepted in view of the observations made by the Delhi High Court in KLM Royal Dutch Airlines (supra). 10.4 In that view of the matter, we are of the opinion that the Tribunal has seriously committed an error in upholding the notice u/s 148 when the Officer has regularly framed assessment. The view taken by the CIT(A) is required to be accepted. Therefore, the issue is answered in favour of the assessee and against the department.”
Following the decision of Hon’ble jurisdictional High Court we hold that the notice issued u/s 148 on 17.08.2012 when the time was available to the AO for issuing notice u/s 143(2) then the initiation of reopening u/s 148 is not valid and the same is liable to be quashed. Hence, reopening u/s 148 is quashed being not valid. Since the notice issued u/s 148 is quashed as invalid, therefore, the other ground raised by the assessee become in- fructuous.”
Thus, when the assessment order itself has been quashed and
therefore, the addition made by the AO are no more existed. Hence, the
penalty u/s 271(1)(c) of the Act has no legs to stand and accordingly,
the ld. CIT(A) has rightly deleted the penalty by considering the fact of
ITA No. 98/JP/2018 ITO vs. Sh. Rajesh Bhatia quashing of the assessment order by this Tribunal. In view of the fact and circumstances of the case when the assessment order itself is quashed by Tribunal being invalid then, the consequential penalty will not survive. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 28/03/2018 Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/03/2018. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- ITO, Ward- 2(3), Jaipur. 2. izR;FkhZ@ The Respondent- Sh. Rajesh Bhatia, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 98/JP/2018} vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत