Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri P. M. Jagtap(KZ) & Shri A. T. Varkey]
ORDER
Per Shri A. T. Varkey, JM:
This is an appeal preferred by the assessee against the order of the Ld. CIT(A)- National Faceless Appeal Centre dated 25.06.2021 for AY 2012-13 .
At the outset, the Ld. AR of the assessee Shri Sunil Surana pressed ground No. 4 which reads as under:
4. For that the Ld. CIT(A) erred in confirming the action of the AO in framing the reassessment u/s 143(2) was issued after the period of six months from the end of the financial year in which the return u/s 148 was filed i.e. 30.03.2019 which was barred by limitation. 3. According to Ld. A.R the legal issue raised by the assessee is regarding non- issuance of notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act) within six months from the end of the financial year in which the return u/s 148 was filed i.e. 30.03.2019 which was barred by limitation. In order to buttress this legal issue the Ld. A.R. drew our attention to the fact that the assessee was in receipt of the notice u/s 148 dated 29.03.2019 wherein the AO has proposed his desire to reopen the assessment for AY 2012-13 and for that asked the assessee to submit the return of income for AY 2012-13. Drawing our attention to page 1 of PB which reveals that the M/s Dudley Capital Market Ltd., AY 2012-13 assessee had duly responded to the notice issued under section 148 of the Act vide letter dated 30.03.2019 pursuant to the said notice u/s 148 of the Act wherein the assessee had requested the AO to treat as return the same return already filed u/s 139 electronically on 27.09.2012 (i.e. original return of income). Thereafter the Ld. A.R. drew our attention to page 12 of PB wherein the notice u/s 143(2) of the Act has been issued by the AO which we note is dated 24.12.2019. Therefore, according to Ld. A.R. this fact i.e. 143(2) notice has been issued after six months from the end of the financial year in which the return u/s 148 of the Act was filed by the assessee in this case on 30.03.2019, cannot de disputed. Thereafter according to Ld. A.R, in such a scenario, the proviso u/s 143(2) is clearly attracted which prohibits the AO from issuing 143(2) notice after the expiry of six months from the end of the financial year. And according to Ld. A.R. this legal issue is no longer res integra and drew our attention to the decision of this Tribunal in the case of ACIT, Circle-4(1), Kolkata vs. Asiatic Oxygen Ltd. in dated 01.07.2019 wherein it was held that such an action of the AO is impermissible and vitiates reassessment framed thereafter and drew our attention to said order. We note that similar legal issue cropped up before this Tribunal in the case of Asiatic Oxygen (supra) and thus we note that this legal issue is no longer res integra. We note that this Tribunal have already held on the similar facts on the legal issue as under:
“4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the dates given above in respect to notice issued u/s. 148 and the letter written by the assessee to treat the original return of income as return of income pursuant to the notice u/s. 147/148 of the Act etc., which is essential for adjudicating the issue before us is not in dispute. We note that the notice u/s. 148/147 of the Act dated 21.01.2013 pursuant to which the assessee filed letter dated 19.02.2013 requesting the AO to treat the original return filed u/s. 139 of the Act as return in response to notice u/s. 148/147 of the Act. As per sec. 143(2), where a return has been furnished u/s. 139 or in response to notice under sub-section(1) of sec. 142, the AO considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under paid the tax in any manner, shall serve on the assessee a notice requiring him on a date to be specified therein either to attend the office of the AO or caused to be produced before the AO any evidence on which the assessee may rely in support of the return. The proviso to sec. 143(2) states that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. So, from a bare reading of the provision, it is clear that the AO is barred from serving any notice u/s. 143(2) of the Act on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. Therefore, in this case, since the assessee pursuant to the notice u/s. 147/148 of the Act dated 21.01.2013 had requested the AO to M/s Dudley Capital Market Ltd., AY 2012-13 treat the original return of income filed u/s. 139 of the Act as the return in response to the notice u/s. 147/148 vide letter dated 19.02.2013 means the AO had to issue 143(2) notice before 31.08.2013. Admittedly, the 143(2) notice has been issued on 12.12.2013 and, therefore, the action of the AO is barred by the limitation prescribed by the 1st proviso to sec. 143(2) of the Act and the Hon’ble Supreme Court in the case of Hotel Blue Moon (321 ITR 362) has held that issuance of notice u/s 143(2) is mandatory for scrutiny assessment even in cases of assessments after search u/s 132 of the Act. Since issuance of notice u/s 143(2) is mandatory before scrutiny assessment even section 292BB of the Act cannot come to the rescue of the AO. And the Hon’ble Madras High Court in the case of CIT vs. C. Palaniapan (284 ITR 257(Mad)] held that issuance of notice u/s 143(2) is mandatory in reassessment cases also. Further, we do not find any merit in the argument of the Ld. CIT, DR that return of income should have been filed and not the letter requesting the AO to treat the original return as the return of income pursuant to the 147/148 notice. For that we rely on the judgment of the Hon’ble Calcutta High Court in the case of Iqbal Singh Atwal Vs. CIT (1984) 147 ITR 599 (Cal) and Hon’ble Delhi High Court in the case of Pr. CIT Vs. Shri Jai Shiv Shankar Traders Pvt. Ltd. (2016) 383 ITR 448 (Del.). Therefore, the notice issued by A.O u/s 143(2) dated 12.12.2013 is hit by the 1st Proviso to section 143(2) of the Act and therefore the A.O had no jurisdiction to issue notice u/s 143(2) after 31.08.2013 and therefore the issuance of notice u/s 143(2) dated 12.12.2013 and all subsequent action is null in the eyes of the law and therefore we do not find any merit in the appeal of the revenue and the action of the Ld. CIT(A) in quashing the reassessment proceeding is upheld. Appeal of revenue is dismissed.”[Emphasis given by us]
We note that in this case notice u/s 148 of the Act was issued electronically on 29.03.2019 which fact is evident from AO’s assertion of this fact at page 2 of the re- assessment order dated 28.12.2019 wherein the AO noted this fact in his own words “in pursuance to notice u/s 148 of the Act dated 29.03.2019……….” So this fact i.e. date of issue of notice u/s 148 of the Act is duly noted as 29.03.2019. Pursuant to the notice of AO u/s 148 of the Act, the assessee has responded to it by asking the AO vide letter dated 30.03.2019 to treat the return of income filed original by it dated 27.09.2012 (refer page 1 of PB). This fact also has been accepted by the AO in the same para at page 2 of his re-assessment order. So as per the proviso to Sub-section (2) of Section 143 of the Act, no notice could have been served upon the assessee after six months from the end of the financial year in which the return is filed. Here in this case, the assessee vide letter dated 30.03.2019 has intimated to the AO pursuant to the notice u/s 148 of the Act to treat the original return filed by it as return pursuant to the notice u/s 148 of the Act, the AO ought to have issued mandatory notice u/s 143(2) on or before 30th September, 2019. Whereas in this case, the AO had issued notice u/s 143(2) on 24.12.2019 (refer page 12 of PB). Therefore, the service/issuance of mandatory notice u/s 143(2) of the Act dated 24.12.2019 was not permitted as per proviso to Section M/s Dudley Capital Market Ltd., AY 2012-13 143(2) of the Act is ergo without jurisdiction. So the consequent re-assessment order of AO dated 28.12.2019 is void as held by this Tribunal in the case of Asiatic Oxygen (supra) and similar arguments were raised by the Ld DR/AO to overcome the proviso to section 143(2) of the Act, however for the same reason as taken note of by this Tribunal in the case of Asiatic Oxygen (supra), we repel the contention of Ld DR in this case also. Therefore, the re-assessment order of AO dated 28.12.2019 is void in the eyes of law.
In the result, the appeal of assessee is allowed.
Order is pronounced in the open court on 13th October, 2021.
Sd/- Sd/- (P. M. Jagtap) (A. T. Varkey) Vice President Judicial Member Dated: 13th October, 2021 SB, Sr. PS Copy of the order forwarded to:
1. 1. Appellant- M/s Dudley Capital Market Ltd., 88A, Sarat Bose Road, 2nd Floor, Kolkata-700026 2. Respondent – DCIT, Circle-10(1), Kolkata 3. CIT(A)-National Faceless Appeal Centre(NFAC) 4. CIT, Kolkata.
5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order
Senior Private Secretary/DDO ITAT, Kolkata Benches, Kolkata