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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri Shamim Yahya (AM)
This appeal by the assessee is directed against the order of learned CIT(A) dated 24.7.2017 and pertains to A.Y. 2012-13.
Grounds of appeal
read as under :-
1. On the facts and circumstances of the case, the learned CIT (A) erred in affirming the decision of Assessing Officer in making the addition under the head "income from House Property".
2. On the facts and circumstances of the case, the learned CIT (A) erred in affirming the decision of Assessing Officer for assessing interest income of Rs. 5,74,481/- under the head "Income from other sources".
3. On the facts and circumstances of the case and in law CIT(A) erred in confirming addition made by Assessing officer u/s 68 amounting to Rs. 6,00,000/- on account of unsecured loan.
This appeal was earlier disposed of by this Tribunal by an ex-parte order dated 21.2.2018. Subsequently, upon Miscellaneous Application by the assessee the same was recalled. Pursuant to the above this appeal has been heard.
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It is noted that there is delay of 47 days in filing this appeal. Reasonable cause for the delay has been attributable to the delay on the part of the consultant who filed the appeal. Upon hearing both the counsel and perusing records and considering reasonable cause for delay, delay is condoned.
It is noted that the assessee has also filed additional ground which reads as under :- Additional Ground of Appeal: -
"That on the facts and circumstances of the case and in law, Ld. AO erred in proceeding with issuing notice u/s 148 and in making assessment u/s 147 of the Act, despite the fact that time period for issuing notice u/s. 143(2) and making assessment u/s 143(3) had not expired."
The assessee submits that it is legal ground going to the root of the matter. The assessee relied upon the decision of Hon'ble Supreme Court in the case of National Thermal Co. Ltd. Vs. CIT (229 ITR 383) for the admission of the same.
Upon hearing both the counsel on the touchstone of the above Hon'ble Supreme Court decision additional ground is admitted. Submissions of the assessee on the additional ground read as under :- “The return of income for the above assessment year was filed on 02.12.2013. As such, time limit for notice u/s. 143(2) for regular assessment would lapse on 30.09.2014, being six months from the end of F.Y. 2013-14. However, instead of issuing notice for regular assessment, the Ld. AO proceeding with invoking reassessment proceedings by issuing notice dated 24.03.2013 u/s. 148 of the Act. As such, the notice u/s 148 as well the consequent re-assessment order u/s 147 of the Act is bad in law as the time limit for making regular scrutiny assessment and issuing of notice u/s 143(2) of the Act had not lapsed. We draw support from the decision of the Hon'ble Jurisdictional High Court in the following case wherein it was held that notice issued u/s 148 during the pendency of the time limit for issuance of notice u/s 143(2) is bad in law and is liable to be quashed. Relevant head notes of the decision is reproduced hereinbelow: Smt. Suman w/o. Keshaorao Burde vs. ITO [2017 (8) TMI 567 (Bom High Court]
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"Reopening of assessment - time to issue notice under Section 143(2) to complete the regular assessment under Section 143(3) has not expired - Held that:- Merely because no assessment has been made even after filing a return, it will not be open to suggest that no income chargeable to tax has escaped assessment. This covers issue where there is no possibility of making an assessment on the date when the notice under Section 147/148 of the Act is issued. So long as the time to issue notice under Section 143(2) of the Act is available, it cannot be said that no assessment has been made as the possibility of making an assessment is always available. The Assessing Officer is obliged to complete assessment under Section 143(3) of the Act by issuing a notice under Section 143(2) of the Act, if he is of the view that the assessee has understated his income or computed excessive loss or understated his tax to the prejudice of the Revenue. Therefore, we are clear that in view of the provisions of Section 143(l)(i) of the Act is in force at the relevant time, no notice under Section 148 of the Act can be issued, till the period to issue notice under Section 143(2) of the Act has expired. As in Commissioner of Income tax vs. Qatalys Software Technologies Ltd[2008 (7) TM 240 - MADRAS HIGH COURT] in identical fact situation dismissed the Revenue's appeal by holding that where the period of issuing notice under Section 143(2) of the Act has not expired, then reassessment notice under Section 147/148 of the Act was invalid. -Decided in favour of assessee."
Upon hearing both the counsel and perusing records I find that the date mentioned in the above said submissions are not disputed. The assessee has filed original return in this case on 2.12.2013 declaring total income of Rs. 3,99,370/-. Subsequently the case was reopened by issuing notice u/s. 148 of the I.T. Act, 1961 dated 24.3.2014 and consequently present assessment was done computing gross total income at Rs. 16,17,510/-. Financial year in this case is F.Y. 2011-12. From the above it is evidently clear that the time limit for issuing notice u/s. 143(2) for regular assessment was lapsed on 13.9.2014. Since notice for reopening was issued during this period on 24.3.2014, ratio from the aforesaid Hon'ble Jurisdictional High Court squarely applies. In the said decision Hon'ble High Court has expounded that recourse cannot be taken u/s. 148 when the time limit for completion of assessment u/s. 143(3) by issuing notice u/s. 143(2) of the Act is available. In this view of the matter on the touchstone of the Hon'ble Jurisdictional High Court decision we hold that reopening is not valid. Hence, this assessment is quashed. Since
4 Shri Kanihyalal Mistry assessment has been quashed on the Jurisdictional issue itself adjudication on merits of this case is now of academic in nature. Hence, the same is not being dealt with.
In the result this appeal is partly allowed. Order has been pronounced in the Court on 09.12.2019.