ITO, WARD- 2(1), NOIDA vs. LOKESH KUMAR SHARMA, G B NAGAR

I.T.A. No. 3702/DEL/2018 A.Y. : 2010-11 ITO, WARD 3(3), VS. SATISH, NOIDA S/O HUKUM SINGH, Room no. 511, H-205, DURYAI, A-2/D, AAYKAR BHAWAN, GAUTAM BUDH NAGAR, SECTOR-24, NOIDA UTTAR PRADESH UTTAR PADESH (PAN: EDQPK9680C) Revenue by : Ms. Parul Singh, Sr. DR. Assessee by : Sh. Priyanshu Pandey, CA AND ITO, WARD 2(1), VS. LOKESH KUMAR SHARMA, NOIDA VILLAGE LADPURA, POST ROOM NO. 403, 4TH FLOOR, MAICHA, GAUTAM BUDH AAYAKAR BHAWAN, A-2D, NAGAR, SECTOR-24, NOIDA UTTAR PRADESH (PAN: BDDPS6018K) (ASSESSEE) (RESPONDENT) Revenue by : Ms. Parul Singh, Sr. DR. Assessee by : Sh. Avinash Gupta, CA ORDER These 03 separate appeals filed by the Revenue emanate out of the respective Orders passed by the Ld. CIT(A)-I, Noida pertaining to assessment years 2010-11 & 2009-10. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are being decided by this common Order for the sake of convenience, by dealing with (AY 2010-11) and the result thereof will apply mutatis mutandis to other two Revenue Appeals No. 3702/Del/2018 (AY 2010-11) – ITO VS. SATISH GAUTAM & 3164/Del/2018 (AY 2009-10) – ITO VS. LOKESH KUMAR SHARMA.

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 uls 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 uls 148 of the I.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 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 directing the Assessing officer to reframe the assessment order under the provisions of section 150 of the I.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 2010-11 and assessment order, which is subject matter of appeal, revision was passed on 08/12/2017.The provision of sub-section (1) of section 150 shall not apply in this case as action for assessment! 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 re-computation 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(1) 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."

8. The appellant craves to leave, add, alter and amend any of the grounds of appeal

on or before hearing.

9. That the order of the Ld. CIT(A) deserves to be set-aside and the order of the AO be restored.

3. The grounds raised in the Revenue’s Appeal No. 3702/DEL/2018 (AY 2010- 11) read as under:-

1. 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 uls 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 uls 148 of the I.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 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 directing the Assessing officer to reframe the assessment order under the provisions of section 150 of the I.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 2010-11 and assessment order, which is subject matter of appeal, revision was passed on 12/12/2017.The provision of sub-section (1) of section 150 shall not apply in this case as action for assessment! 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 re-computation 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(1) 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 No. 267/Del.l2013 [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 (2) 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.

on or before hearing.

9. That the order of the Ld. CIT(A) deserves to be set-aside and the order of the AO be restored.

4. The grounds raised in the Revenue’s Appeal No. 3164/DEL/2018 (AY 2009- 10 read as under:-

1. 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 uls 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 uls 148 of the I.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 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 I.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 2010-11 and assessment order, which is subject matter of appeal, revision was passed on 19/12/2016.The provision of sub-section (1) of section 150 shall not apply in this case as action for assessment! 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 re-computation 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(1) 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 No. 267/Del.l2013 [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 (2) 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. 1 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.

5. Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.

6. At the time of hearing, Ld. DR reiterated the contentions raised in the grounds of appeals and stated that Ld. CIT(A) has wrongly annulled the assessment order on the ground that no notice under section 143(2) of the Act was issued before the completion of assessment. He further submitted that Ld. CIT(A) ignored the facts that no return was filed by the assessee in response to notice under section 148 and notice u/s. 143(2) of the Act 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 I.T. Act, 1961, whereas in this case no return was filed by the assessee. Hence, the finding of the Ld. CIT(A) is contrary to the facts and law and therefore, is liable o be cancelled. Alternatively, Ld. DR stated that the issues in dispute requires verify of the arguments advanced by him and therefore, the issues in dispute may be set aside to the file of the Assessing Officer to verify the facts and to frame the assessment ‘Denovo’, as per law, after giving adequate opportunity of being heard to the assessee.

7. On the contrary, Ld. Counsel for the assessee has not raised any objection on the request of the Ld. DR for setting aside the issues to the file of the AO, as per law, after giving adequate opportunity of being heard to the assessee, by adopting the prescribed procedures.

8. I have heard both the parties and perused the orders of the revenue authorities especially the impugned order passed by the Ld. CIT(A). I find that Ld. DR stated that no notice under section 143(2) of the Act was issued before the completion of assessment. I further find that Ld. DR has stated that no return was filed by the assessee in response to notice under section 148 and notice u/s. 143(2) of the Act 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 I.T. Act, 1961, whereas in this case no return was filed by the assessee and therefore, the contention of the Ld. DR requires verification at the level of the AO and thereafter, the AO may frame the assessment ‘Denovo’, as per law, after giving adequate opportunity of being heard to the assessee for which both the parties were agreed. I hold and direct accordingly. The the assessee is at liberty to file any evidence in support of his claim before the AO.