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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR
आदेश/O R D E R
PER PRADIP KUMAR KEDIA - AM:
The captioned appeal has been filed at the instance of the Revenue against the order of the CIT(A)-1, Ahmedabad (‘CIT(A)’ in short), dated 09.01.2015 arising in the assessment order dated 30.12.2011 passed by the Assessing Officer (AO) under s. 143(3)
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r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning assessment year 2006-07.
The grounds of appeal raised by the Revenue reads as under:-
“(1) The ld. CIT(A) has erred in law and on facts by holding that notice u/s 143(2) of the Act issued on 21-11-2011 is barred by limitation and such mistakes cannot be rectified u/s 292B of the Act and quashed the reassessment as bad in law.
(2) The ld. CIT(A) has not appreciated the fact that the assessee has not raised any objection during the course of re-assessment proceedings regarding validity of notice u/s 143(2) of the Act.
(3) The ld. CIT(A) has erred in law and on facts of the case in deleting the addition ofRs.36,03,711/- made on account of the difference in the O & M fees as per TDS certificate issued by GPEC and shown by the assessee.
(4) The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.71,05,644/- made on account of professional or technical services income received from GPEC and not offered for tax.”
When the matter was called for hearing, the learned AR for the assessee in the Revenue’s appeal submitted at the outset that in view of belated issuance of notice under s.143(2) of the Act for the purposes of initiation of the assessment proceedings, the entire assessment proceedings and consequently, the assessment order passed under s.143(3) r.w.s. 147 of the Act (which is subject matter of appeal) is void ab initio. Such belated notice under s.143(2) of the Act has rendered the entire process of re- assessment as bad in law. Consequently, it was submitted that the
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re-assessment order does not survive and as a corollary appeal of the Revenue is liable to struck down. The learned AR supported his case of invalidity of proceedings owing to such belated service of notice under s. 143(2) of the Act by the decision of Gujarat High Court in the case of CIT vs. Sukhini P. Modi [2014] 52 taxmann.com 50 (Guj).
The Learned DR, on the other hand, contested the argument of the assessee and supported its appeal on the ground that assessee has not raised any objection before the AO for belated issuance and service of valid notice and therefore, the assessee cannot seek annulment of assessment proceedings on the ground of belated service of notice under s.143(2) of the Act. For this proposition, the learned DR relied upon; (i) Josh Builders & Developers (P.) Ltd. vs. Pr.CIT [2016] 389 ITR 314 (Punjab & Haryana), (ii) Padinjarekara Agencies (P.) Ltd. vs. CIT(A) [2017] 398 ITR 381 (Kerala) & (iii) CIT vs. Mrs. C. Malathy [2007] 294 ITR 532 (Madras).
Since, the preliminary objection towards validity of assessment owing to belated service of notice under s.143(2) of the Act is in question which goes to the root of the matter, we shall proceed to deal with the jurisdictional question raised before us at the outset.
Few facts concerning the issue are that the original assessment was completed in the case of the assessee under s.143(3) of the Act on 24.07.2008. Subsequently, the assessment
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was reopened under s.148 of the Act for which notice was issued on 22.03.2011. In response thereof, the assessee vide its letter dated 23.03.2011 stated that the original return of income be treated as compliance of the notice under s.148 of the Act. Thereafter, notice under s.143(2) of the Act was issued on 21.11.2011. It is the case of the assessee that in view of the erstwhile provision as applicable at the relevant time, the notice under s.143(2) was statutorily required to be issued within six months from the end of the financial year and consequently, the last date for issuance of notice under s.143(2) of the Act is to be reckoned as 30th September, 2011. The notice issued thereafter on 21.11.2011 is, thus, of no moment and does not have any force of law.
At this point, we observe that the fact of belated issuance of notice has not been disputed on behalf of the Revenue. Needless to say that notice under s.143(2) of the Act grants jurisdiction for making assessment or re-assessment. The requirement of limitation placed in proviso to Section 143(2) of the Act to gain jurisdiction under s. 143(2) of the Act is absolute and neglect in attending to such requirement will invalidate the whole proceedings. The jurisdictional defect thus cannot be cured. We thus find that the CIT(A) has rightly adjudicated the issue in favour of the assessee by placing reliance upon the decision of the Hon’ble Supreme Court in the case of ACIT vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) and host of other decisions as noted therein. Identical issue has been decided in favour of the assessee by the Jurisdictional High Court in the case of Sukhini P. Modi (supra) as relied upon on behalf of the assessee. Consequently,
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We do not see any infirmity in the order of the CIT(A). The case laws relied upon on behalf of the Revenue are on different facts. We are, in any case, governed by the decision of the Hon’ble Supreme Court and Hon’ble Jurisdictional High Court in preference to other decisions. We do not consider it necessary to dwell further on a squarely covered issue. Resultantly, the re- assessment order which is subject matter of appeal is bad in law and thus, the grievance of the Revenue arising from such nonest re-assessment order does not survive.
In the result, the appeal of the Revenue is dismissed.
This Order pronounced in Open Court on 04/09/2018
Sd/- Sd/- (MAHAVIR PRASAD) (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 04/09/2018 True Copy S. K. SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।