Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: JUSTICE SHRI P.P. BHATT & SHRI G.S. PANNU
PER G.S. PANNU, VICE PRESIDENT
The captioned appeal filed by the assessee is directed against the order passed by the CIT(A)-5, Mumbai dated 22.11.2012, for previous year relevant to assessment year 2007-08, which in turn, arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) dated 30.12.2009.
In this appeal, assessee has raised the following Grounds of appeal :-
“A) Notice u/s. 143(2)(ii) not served within time - Assessment frad in law
1) The learned Commissioner of Income Tax (Appeals) - 5, Mumbai [CIT(A)] erred on facts and in law in holding that the notice u/s. 143(2) dated 18.09.2008
2 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. issued by the Deputy Commissioner of Income Tax - 3(2), Mumbai (AO) stating the address available on PAN database and received by Ms. Shailaja D'Souza was a legally valid notice and further holding that it is highly improbable that the said notice was not served within a few days of its issue.
2) The learned CIT(A) erred in holding that the appellant had not raised any objection regarding validity of notice u/s. 143(2) before completion of assessment u/s. 143(3).
3) The learned CIT(A) further erred in holding that full opportunity having been given to the appellant from time to time and the purpose of service of notice u/s. 143(2) having been served, the notice has to be considered to be a valid notice.
4) The appellant prays that your honours hold that the notice u/s. 143(2) was not served on the appellant as per law and hence the order passed u/s. 143(3) is bad in law.
A) Disallowance of bad debts - Rs. 61,03,566/-
5) The learned CIT(A) erred on facts and in law in upholding the order passed by the AO disallowing the appellant's claim of bad debts with respect to the following parties amounting to Rs. 61,03,566/- by holding that (a) the appellant had basically written off loans and advances, (b) the appellant is not engaged in the business of financing or giving loans and advances and (c) the appellant has not offered the amounts written off as income in earlier years :
a) Loan given to relative and friends of Directors of Maharashtra Apex Corporation - Rs. 58,49,056/- b) Loan given to Silver Harvest - Rs. 46,288/- c) Loan given to Adi Motafram - Rs. 1,46,000/- d) Loan given to Imtiaz Khan - Rs. 30,000/- e) Loan given to Kurlon Ltd. -Rs. 28,531/- f) Sundry Balances written off- Rs. 3,691/-.
6) The appellant prays that the disallowance as made by the AO of bad debts amounting to Rs. 61,03,566/- and as upheld by the CIT(A) may be deleted.
3 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. B) Without prejudice, not considering the appellant's alternate claim of business loss - Rs. 61,03,566/-
7) Without prejudice to the above, the learned CIT(A) erred on facts and in law in not considering the appellant's alternate claim and allowing the following amounts written off as business loss, while upholding the order passed by the AO disallowing the appellant's claim of bad debts amounting to Rs. 61,03,566/-:
a) Loan given to relative and friends of Directors of Maharashtra Apex Corporation – Rs. 58,49,056/- b) Loan given to Silver Harvest - Rs. 46,288/- c) Loan given to Adi Motafram - Rs. 1,46,000/- d) Loan given to Imtiaz Khan - Rs. 30,000/- e) Loan given to Kurlon Ltd. -Rs. 28,531/- f) Sundry Balances written off- Rs. 3,691/-,
8) The appellant prays that if your honours are not inclined to allow the appellant's claim of bad debts amounting to Rs. 61,03,566/-, the same may be held to be business loss and your honours may hold that the appellant is entitled to deduction of Rs. 61,03,566/- as business loss.
C) Addition on account of accrued interest - Rs. 43,836/-
9) The learned CIT(A) having accepted that the appellant had initiated legal proceedings in the court and has filed a complaint with Economic Offences Wing against Mrs. Madhu Jhunjunwala erred in law in upholding the order passed by the AO making an addition of Rs. 43,836/- on account of accrued interest on loan given to Mrs. Madhu Jhunjunwala by further holding that the appellant had not brought on record the latest position of the suit filed by them.
10) The appellant prays that the addition on account of accrued interest of Rs.43,836/- as made by the AO and as upheld by the learned CIT(A) may be deleted.
Briefly put, the relevant facts are that assessee is a company registered under the Companies Act, 1956 and it filed its return of income for assessment year 2007-08 on 25.10.2007 declaring a total income of NIL. The case of the
4 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. assessee was selected for scrutiny assessment and notice under Section 143(2) of the Act dated 18.09.2008 was issued by the Assessing Officer. Subsequently, the Assessing Officer passed an assessment order under Section 143(3) of the Act dated 30.12.2009 after making certain additions. Aggrieved by the same, assessee carried the matter in appeal before the CIT(A). Before the CIT(A), assessee challenged the validity of the assessment proceedings for the reason that the notice under Section 143(2) of the Act dated 18.09.2008 issued by the Assessing Officer was served on the assessee only on 24.06.2009, i.e. after expiry of twelve months from the end of the month in which the return is furnished which ended on 30.10.2008. The assessee also challenged the issue on merits. To apprise the issue of issuance of notice under Section 143(2) of the Act within the prescribed time, the CIT(A) called for remand report from the Assessing Officer. The Assessing Officer in his remand report dated 10.01.2012 stated that notice under Section 143(2) of the Act dated 18.09.2008 was generated from the system and the address of the assessee was shown at 5th Floor, Vardhman Chambers, 17-G, Cawasji Patel Street, Fort, Mumbai – 400 001. The said address was taken from the PAN database without any human intervention. The onus is on the assessee to apply for change of address in PAN through NSDL, which the assessee has not in the present case. The Assessing Officer further stated that assessee filed its return of income for assessment year 2007-08 stating the address as 2B, Hamam House, Ambalal Doshi Marg, Stock Exchange Post Office, Fort, Near Bombay Stock Exchange, Mumbai – 400 023. It was also stated that upto assessment year 2008-09, notices under Section 143(2) of the Act were generated by the system on the address as obtained from PAN database only. The Assessing Officer further mentioned that though the learned Representative of the assessee states that they have received the notice only on 24.06.2009, no date
5 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. of receipt is mentioned in the departmental records. It was also stated that the notice under Section 142(1) of the Act dated 17.06.2009 was served on assessee’s address mentioned in the PAN database and was duly received by the assessee. Lastly, the Assessing Officer cited Section 292BB of the Act and concluded that assessee had not objected to issuance of notice under Section 143(2) of the Act before him and co-operated in the assessment proceedings and thus, by virtue of the deeming provision, the assessee cannot now be allowed to challenge the notice in terms of provisions of Section 292BB of the Act. The CIT(A), without making clear finding as to the date of receipt of the notice under Section 143(2) of the Act, rejected the Ground raised by the assessee holding that notice under Section 143(2) of the Act was served on the address as mentioned in the PAN database and assessee had not changed it. Secondly, the CIT(A) concluded that it is highly improbable that the notice under Section 143(2) of the Act dated 18.09.2008 was not served within few days of preparation. Thirdly, the CIT(A) held that assessee had not raised any objection at the time of assessment proceedings; and, lastly, that sufficient opportunities were given to the assessee and, as such, purpose of issuance of notice under Section 143(2) of the Act was served. Aggrieved by the action of the CIT(A), both on legal ground and on merits, the assessee is in appeal before us.
Before us, the learned Representative for the assessee drew our attention to the assessment order wherein the date of issuance of notice under Section 143(2) of the Act is stated to be 18.09.2008, however date of service on the assessee is not mentioned. The learned Representative for the assessee then drew our attention to the return of income filed by the assessee stating its administrative address at 2B Hamam House, Ambalal Doshi Marg,
6 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. Stock Exchange Post Office, Fort, Near Bombay Stock Exchange, Mumbai – 400 023. Further, our attention was also drawn to the ITS details for assessment year 2007-08 which are also generated from the ITD system, wherein also the address of the assessee is stated to be at 2B Hamam House, Ambalal Doshi Marg, Stock Exchange Post Office, Fort, Near Bombay Stock Exchange, Mumbai – 400 023. Our attention was also invited to the letter dated 22.07.2009 filed before the Assessing Officer in the course of assessment proceedings, wherein it was stated that the registered office of the assessee company is at Dalamal Chambers and administrative office is at Haman House and that the notices were sent to 5th Floor, Vardhman Chambers, 17-G, Cawasji Patel Street, Fort, Mumbai – 400 001 and requested to take note of the correct administrative address of the assessee. The learned Representative for the assessee also filed an Affidavit of the director of the company, Mr. GevFramroze Engineer confirming the fact that they have not received any notice under Section 143(2) of the Act on or before 30.09.2008 at any of its offices. It was also confirmed that the notice under Section 143(2) of the Act was also not served at the address specified in the notice under Section 143(2) of the Act, i.e. 5th Floor, Vardhman Chambers, 17-G, Cawasji Patel Street, Fort, Mumbai – 400 001 and it was only on 24.06.2009 that the representative of the company received the notice under Section 143(2) of the Act. The learned Representative thus argued that issuance of notice under Section 143(2) of the Act goes to the root of the matter; and, since the notice under Section 143(2) of the Act was not served within the time prescribed under Section 143(2) of the Act, the assessment order passed under Section 143(3) of the Act pursuant to such notice was invalid and void ab initio. He placed reliance on the decision of the Hon’ble Delhi High Court in the case of CIT vs. Mascomptel India Ltd. [2012] 345 ITR 58 (Delhi), wherein on similar facts, it was held that
7 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. when department was having the correctly stated address in the return of income, and no attempt was made to serve the notice under Section 143(2) on the correct address stated in the return of income, then the same cannot be held to be a valid service of notice.
As regards applicability of provisions of Section 292BB of the Act, the learned Representative placed reliance on the decision of our co-ordinate bench in the case of Ashok B. Bafna v. DCIT [2012] 27 taxmann.com 126 (Mum- Trib) and the judgements of the Hon’ble Bombay High Court in the case of CIT vs. Salman Khan in ITA (L) No. 2362 of 2009 dated 01.12.2009 and CIT vs. Salman Khan in ITA No. 508 of 2010 dated 06.06.2011, wherein it was held that Section 292BB of the Act was inserted w.e.f. 01.04.2008 and, would thus be applicable from assessment year 2008-09; therefore, the instant assessment year being 2007-08, the improper notice issued under Section 143(2) of the Act would not be saved by Section 292BB of the Act.
The ld. DR, on the other hand, relied on the orders of the authorities below to state that notice under Section 143(2) of the Act could not be served on the assessee due to wrong address stated in the PAN database. Further, the ld. DR placed heavy reliance on Section 292BB of the Act to state that since the assessee participated in the assessment proceedings, it cannot now challenge the validity of the notice under Section 143(2) of the Act.
Further, in order to verify the factual position regarding the issuance and service of notice under Section 143(2) of the Act, the ld. DR was asked to obtain a report from the Assessing Officer as well as call for the case records. The Assessing Officer, vide letter dated 09.04.2019, submitted the case records. On perusal of the case records submitted by the Assessing Officer, it
8 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. is observed that the date of service of notice under Section 143(2) of the Act is not mentioned in the record. Noticing the aforesaid observation of the bench, the ld. DR sought time to obtain another report from the Assessing Officer regarding the proof of service of notice under Section 143(2) of the Act in the form of acknowledgment, tear off slip, etc. and sought his comment on the issue. In response to the same, the Assessing Officer vide letter dated 08.05.2009 submitted a report, which was placed before the bench. It has been asserted in the report that the notice under Section 143(2) of the Act dated 18.09.2008 was sent through speed post to the assessee on the same date, but the delivery details of the said communication are stated not available on record. It was further stated that notice was also served on the authorised representative of the assessee who regularly appeared for the assessment proceedings, but the crucial aspect of date of service is not corroborated or established. Lastly, the Assessing Officer took shelter of the provisions of Section 292BB of the Act and submitted that the assessee had not raised any objection on this issue in the course of assessment proceedings and, as such, now the assessee may not be allowed to raise the instant ground. In nutshell, the aforesaid is the stand of the Revenue before us with respect to the assessee’s plea of non-service of notice under Section 143(2) of the Act within the stipulated period.
We have carefully considered the rival submissions and pursued the material on record. We find that service of notice under Section 143(2) of the Act within the time prescribed therein is a prerequisite for framing of assessment under Section 143(3) of the Act. The ld. DR agrees to the legal position that the service of notice under Section 143(2) of the Act within the prescribed period is of vital importance and mere issuance of notice is of no
9 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. relevance. Thus, what is important here is to find out whether there was a valid service of notice under Section 143(2) of the Act to the assessee or not. The assessee submitted that it was not served with the notice under Section 143(2) of the Act within the time prescribed under Section 143(2) of the Act, which ended on 30.09.2008. It is the case of the Revenue that notice under Section 143(2) of the Act was served on the assessee’s address as per PAN database, which is at 5th Floor, Vardhman Chambers, 17-G, Cawasji Patel Street, Fort, Mumbai – 400 001. On perusal of the Affidavit of the director of the assessee company, we find that the assessee has not received any notice under Section 143(2) of the Act even at its address as per PAN database. Since the Revenue claims that the notice under Section 143(2) of the Act was served on the assessee, the burden lies on the Assessing Officer to substantiate with evidence that the notice was, in fact, served on the assessee. The ld. DR was thus asked to produce proof of service of notice under Section 143(2) of the Act. On perusal of the letter addressed by the Assessing Officer to the ld. DR, we find that in the said letter the Assessing Officer has stated that the notice was served through speed post and the details of delivery of said notice is not available on record. Even the speed post tracking number was not provided by the Assessing Officer from which it can be ascertained whether the notice was, in fact, attempted to be delivered by him on or before the time prescribed. Merely mentioning the fact that it was served on the assessee through Speed Post, without bringing on record even a single documentary evidence to establish that it was attempted to be served on the assessee, will not absolve the Revenue from the burden cast upon it to prove beyond doubt that the notice was served on the assessee. The Assessing Officer has in all his communications reiterated the fact that notice was issued on assessee’s address as available in PAN data, but factually speaking, it has not been
10 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. established at any stage. Therefore, under these circumstances, the argument of the ld. DR that the assessee had not updated his new address in PAN database, pales into insignificance. In fact, the Assessing Officer has also not brought on record that the notice was received unserved due to the change in address by the assessee; all the aforesaid circumstances can only lead to a presumption that it was not even attempted to be served on the old address of the assessee, as the assessee has denied to have received the notice even at its address as per PAN database.
An improper service or delay in service of notice under Section 143(2) of the Act goes to the root of the matter and will render the assessment proceedings under Section 143(3) of the Act null and void. As per the ratio of the judgment of the Hon’ble Supreme Court in the case of Hotel Blue Moon, 321 ITR 362 (SC), serving of notice under Section 143(2) of the Act in the prescribed time is mandatory for making assessment under Section 143(3) of the Act. In the decision of Hon’ble Delhi High Court in the case of CIT vs Mascomptel India Ltd., 345 ITR 58 (Delhi) relied upon by the learned Representative, the facts were that the notice issued by the Assessing Officer under Section 143(2) of the Act could not be served on the assessee-company and was received back with the remark of postal authority that 'no such person exists at the address mentioned'. The inspector deputed to serve the notice personally reported that the company was not available at the address. The Assessing Officer, thereafter, served the notice by affixture and made an ex parte assessment. The Commissioner (Appeals) and the Tribunal held that the aforesaid service by affixture was not valid and, therefore, assessment order was null and void. The findings of the Commissioner (Appeals) and the Tribunal were that the assessee had mentioned a different address in the
11 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. return of income filed for the assessment year in question. On appeal by the Revenue before the High Court, it was held that no attempt was made to serve the assessee at the correct address which was available with the department and, in fact, stated in the return of income for the assessment year 2006-07. Subsequent attempt to serve another notice under Section 143(2) of the Act at the changed address long after the expiry of the limitation period prescribed by the proviso could not help the Revenue. It is pertinent to note that the decision relied on by the learned Representative pertains to assessment year 2006-07 and, as claimed by the Assessing Officer, that in those years the notices were generated from system based on address available in PAN. Since the High Court has in assessment year 2006-07 allowed the appeal in the case of different assessee, we find that the argument of the Assessing Officer has no substance.
It is also pertinent here to mention that though the address on the notice cannot be changed by human intervention, as argued by the Assessing Officer, the address on the envelop used to send such notice can very well be changed while dispatching the notice to the assessee; and, in case the notice is returned unserved, such exercise would have been carried out by the Assessing Officer at second instance. However, no such efforts were taken by the Assessing Officer to send the notice at the other address available with him in the return of income.
We also find that even if we agree to the argument of the Assessing Officer that the notice under Section 143(2) of the Act was system generated, based on the address available in PAN database, we are unable to understand how the address on the ITS report generated from the same system for the year under consideration has the correct address of the assessee.
12 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd.
As regards applicability of provisions of Section 292BB of the Act, we find that the issue has been discussed in detail by our co-ordinate bench in the case of Ashok B. Bafna vs. DCIT [2012] 27 taxmann.com 126 (Mumbai-Trib), following the decision of Special Bench in the case of Kuber Tobacco Products (P.) Ltd. held as under:
“Let us examine the alternate plea of the Revenue in respect of the applicability of section 293BB, which is before us. In the case of Kuber Tobacco Products (P.) Ltd. (supra) the hon'ble Special Bench of the Tribunal has considered this issue and has held as under (page 321):
"39. Now, we proceed to examine that whether section 292BB can be construed to be retrospective in the light of the above principles. It is also observed that section 292BB has been made effective by the Legislature from 1st April, 2008 and there is nothing in the enactment to show that section 292BB has retrospective operation. If it is so, according to rule of interpretation described above, section 292BB cannot be construed retrospectively.
According to the abovementioned principles laid down by the hon'ble Supreme Court, every litigant has a vested right in substantive law, but no litigant has such right in procedural law. No doubt, issue and service of notice though may relate to procedural law, but where procedural statute creates a new disability or obligation and imposes new duties in respect of transactions already accomplished, then the statute cannot be construed to have retrospective effect.
It has already been pointed out that issue and service of notice in the manner prescribed by the statute has played a vital role in determining the validity or otherwise of assessment/reassessment and other proceedings under the Act and where the courts have found defect either in the notice or in its proper service, the validity of assessment/ reassessment and other proceedings has been struck down by the courts subject, of course, to section 292B of the Act introduced with retrospective effect from October 1, 1975. Thus, to challenge the validity of a particular action of the Department of making assessment
13 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. or reassessment on the basis of invalid issuance/service of notice had become right of litigant assessee during the course of appellate proceedings even though such contention was never raised during the course of assessment proceedings. Instances of striking down the validity of assessment and reassessment proceedings have already been discussed in the earlier part of this order. By insertion of section 292BB such right of the assessee to challenge the validity of assessment or reassessment proceedings during the course of appellate proceedings has been taken away by the statute with effect from April 1, 2008. It is also observed that the issue and service of notice relates to procedural law, but, at the same time, it created a new disability on the assessee litigant to the extent that he is debarred from taking a plea in the appellate proceedings to challenge the validity of the same on the ground of valid issuance/service of notice required to be given by the statute in a case where the assessee has appeared in such proceedings or co-operated in the inquiry relating to assessment or reassessment. Therefore, applying the above principles of interpretation and keeping in view the above discussion it has to be held that section 292BB cannot be construed to have retrospective operation and it has to be applied prospectively.
Having arrived at the conclusion that section 292BB has no retrospective effect and is to be construed prospectively, it has to be held that prior to April 1, 2008, i.e., up to March 31, 2008, as per section 292BB, the assessee is not precluded from taking any objection (hereinafter referred to as 'such objection') regarding invalidity of assessment/reassessment on the ground of improper/invalid issuance/ service of a notice.
The second aspect which requires to be considered is that when assessee can be said to be precluded from taking such objection section 292BB has been made applicable with effect from April 1, 2008 by the Finance Act, 2008. As per the well established law as explained by the hon'ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd. v. State of Kerala[1966] 60 ITR 262 (SC) (which is a decision rendered by five judges of the hon'ble Supreme Court) that the Income-tax Act as it stands amended on the first day of any financial year must apply to the assessments of that year. The facts in that case were that for the
14 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. assessment year 1957-58 the company was assessed to agricultural income-tax under the Kerala Agricultural Income-tax Act, 1950 and in the assessment surcharge at 5 per cent. on the agricultural income-tax and super-tax was levied and collected from the assessee under the provisions of the Surcharge Act. The levy of surcharge was agitated by the assessee on the ground that the Surcharge Act came into force only from September 1, 1957 and, therefore, it does not have retrospective effect and surcharge could not be levied for the assessment year 1957- 58. Such contention of the assessee was rejected by the Assessing Officer as well as by the first appellate authority. However, the Tribunal held that surcharge could not be levied as the Surcharge Act did not have retrospective operation unless there was a specific provision therein to that effect and the question of law was referred to the Kerala High Court to state that whether surcharge could be levied for the assessment year 1957-58. The hon'ble High Court decided the question in favour of the Revenue and, thus, the matter went to the hon'ble Supreme Court and their Lordships of the hon'ble Supreme Court have observed that the law is well-settled that the Income-tax Act as it stands amended on the 1st April of any assessment year must apply to that assessment year. Any amendments in the Act which come into force after the 1st day of April of an assessment year, would not apply to that assessment year, even if the assessment is actually made after the amendments come into force. Their Lordships referred to the earlier decision of the apex court in the case of Scindia Steam Navigation Co. Ltd. v. CIT[1961] 42 ITR 589 (SC) in which similar proposition of law was laid down while interpreting section 10(2)(vii) and proviso (iv) and section 66(1), (2) and (5) and in the said case it was held that the proviso though came into force on 5th May, 1946 could not be made operative from 1st April, 1946 and, therefore, no retrospective effect could be given to that provision by accepting the contention of the Revenue. In that case the Revenue has sought to apply the proviso for the assessment year 1946-47 despite the fact that the proviso had come into force from May 5, 1946 and it was held that the proviso is not retrospective and it was held that the court cannot import into its construction matters which are 'ad extra legis' and thereby alter its true effect. It will be relevant to reproduce the observations of their Lordships from the said decision (page 264 of 60 ITR) : 'It is well-settled that the Income-tax Act, as it stands amended on the first day of April of
15 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments came into force.
In Scindia Steam Navigation Co. Ltd. v. CIT [1954] 26 ITR 686 (Bom), a Division Bench of the Bombay High Court consisting of Chagla, C.J. and Tendolkar J., considered the question as to the effect of an amendment which came into force after the commencement of the financial year. The facts in that case were these. The assessee's ship was lost as a result of enemy action. The Government paid the assessee in 1944 a certain amount as compensation which exceeded the original cost of the ship. The Income-tax Officer included the difference between the original cost and the written down value of the ship in the total income of the assessee for the assessment year 1946-47. The Tribunal upheld that decision and referred the question, whether the sum representing the difference between the original cost and the written down value was properly included in the assessee's total income computed for the assessment year 1946-47. It was argued that the fourth proviso to section 10(2)(vii) of the Income-tax Act (inserted by the Amendment Act of 1946 with effect from May 4, 1946) under which the inclusion of the amount was justified by the Department, had no application to the case. The learned judges held that as it was the Finance Act of 1946 that imposed the tax for the assessment year 1946-47, the total income had to be computed in accordance with the provisions of the Income-tax Act as on April 1, 1946 ; that as the amendments made by the Amendment Act of 1946 with effect from May 4, 1946, were not retrospective, they could not be taken into consideration merely because the assessee was assessed after that date and that the assessee was not liable to pay tax on the sum because the fourth proviso to section 10(2)(vii) of the Income-tax Act under which it was sought to be taxed was not in force in respect of the assessment year 1946-47.
If the present issue is considered in the light of the above decision of the hon'ble Supreme Court, then, it has to be held that section 292BB is applicable to the assessment year 2008-09 and subsequent years. Therefore, answer to the second aspect of the question is that the
16 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. assessee is precluded from taking such objection for and from the assessment year 2008-09.
Summarising our findings, we hold as follows :
(i) section 292BB, even if it is procedural, it is creating a new disability as it precludes the assessee from taking a plea which could be taken as a right, cannot be construed retrospectively as the same is made applicable by the statute with effect from 1st April, 2008.
(ii) section 292BB is applicable to the assessment year 2008-09 and subsequent assessment years."
We, therefore, respectfully following the principles laid down by the hon'ble Special Bench in the case of Kuber Tobacco Products (P.) Ltd. (supra) and hold that even if in the present assessment year, i.e., assessment year 2007-08, the assessee has fully participated in the assessment proceeding and even did not raise any objection till the completion of the said proceedings, yet the assessee can validly raise an objection for non-service of the notice under section 143(2) of the Act within the time-limit prescribed vide proviso to said sub-section, as section 292BB of the Act is applicable from the assessment year 2008-09. In this case, admittedly, the Assessing Officer has not sent the notice on the address given by the assessee in his return of income. We find no merit in the plea of the learned Departmental representative that the notice was issued on the address given in the application for the permanent account number. In fact, when the Assessing Officer selected the return of income for scrutiny then he has to adopt the address given on the said return. We, therefore, hold that assessment order passed by the Assessing Officer under section 143(2)(ii) is bad in law and we accordingly cancel the same. Ground Nos. 2, 3 and 4 taken by the assessee in this appeal are allowed.
As we have cancelled the assessment order itself by allowing ground Nos. 2, 3 and 4, we do not go into the other grounds taken on the merits or otherwise.”
As is evident from the above, Section 292BB of the Act is applicable from assessment year 2008-09 and not prior to that. Since the year under
17 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd. consideration before us falls prior to assessment year 2008-09, the provisions of Section 292BB of the Act do not come to the rescue of the Revenue in the instant case. The above decision is also affirmed by the Hon’ble Bombay High Court in the case of CIT vs. Salman Khan in ITA (L). 2362 of 2009, wherein also it was held that Section 292BB of the Act was inserted w.e.f. 01.04.2008 and for cases prior to it, if no notice under Section 143(2) of the Act is issued, the assessment order cannot sustain. Accordingly, Section 292BB of the Act has no application.
In light of our above discussion, we hold that the assessment order passed by the Assessing Officer without issuing notice under Section 143(2) of the Act within the prescribed time is bad in law and void ab initio and is not sustainable in the eyes of law. We hold so.
Since we have already decided the appeal on legal ground and the assessment order itself is quashed, the other Grounds raised by the assessee dealing with the merits of the case are rendered academic and are not being adjudicated for the present.
In the result, appeal of the assessee is allowed, as above.
Order pronounced in the open court on 9th August, 2019.
Sd/- Sd/- (JUSTICE P.P. BHATT) (G.S. PANNU) PRESIDENT VICE PRESIDENT Mumbai, Date : 9th August, 2019 *SSL*
18 ITA No. 2471/Mum/2013 Amoha Traders Pvt. Ltd.
Copy to : 1) The Appellant 2) The Respondent 3) The CIT(A) concerned 4) The CIT concerned 5) The D.R, “A” Bench, Mumbai 6) Guard file By Order
Dy./Asstt. Registrar I.T.A.T, Mumbai