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Income Tax Appellate Tribunal, “G”
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFOREHON’BLE SH. SANDEEP GOSAIN, JM& HON’BLE SH.RAMIT KOCHAR, AM आयकरअपीलसं./ I.T.A. No. 3256/Mum/2017 (निर्धारणवर्ा / Assessment Year: 2007-08)
ACIT Cen Cir 3(3) ShubhlaxmiDyetex Pvt. R. No. 401, Aayakar Ltd. Bhavan, Mumbai-400020 401/A, Oberoi Chambers, बिधम/ New Link Road, Opp- Vs. SAB TV office, Andheri(W), Mumbai-400 053 स्थायीलेखासं./जीआइआरसं./ PAN No. AADCS3613D (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant Ms. HemaKataria,AR : by प्रत्यथीकीओरसे/Respondentby : Shri Ajay Pratap Singh, DR सुनवाईकीतारीख/ : 27.06.2019 Date of Hearing घोषणाकीतारीख / : 01.07.2019 Date of Pronouncement आदेश / O R D E R Per Sandeep Gosain, Judicial Member: The present Appeal has been filed by the revenueagainst the order of Commissioner of Income Tax (Appeals)-51, Mumbai, dated 08.03.15for AY 2007-08. 2 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. 2. Assessee has moved an application dated 19.06.19 for raising additional grounds. It was submitted in the said application that AO had not issued notice u/s 143(2) of the Act for assuming jurisdiction to assess the income u/s 143(3) r.w.s 147 of the Act for the assessment year under consideration. It was also submitted that in the order of assessment, there is no mention about the issuance of notice u/s 143(2) of the Act. In this respect, attention of the revenue authorities was drawn by mentioning the same in the statement of facts filed before Ld. CIT(A). Thus assessee request to raise this legal point as additional ground.
On the other hand, the Ld. DR refuted the claim of the assessee and thus requested for dismissal of application.
We have heard the Counsels for both the parties on the application for raising additional grounds and after perusal of the contents of the application dated 19th June 2019, we find that the ground raised by way of additional grounds filed is purely legal in nature. Apart from above, it is also observed that the facts relevant for arguing the additional ground are already on record
3 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. and therefore, entertaining this additional ground will not require investigation into any new or fresh facts.
Therefore, while keeping in view the principles laid down by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT 229 ITR 383 (SC), Jute Corporation of India Vs. CIT 187 ITR 688 (SC), Ahemdabad Electrical Vrs. CIT 199 ITR 351, wherein it has been held that legal grounds, which goes to the roots of the case, can be raised and allowed at any time /stage. Therefore, keeping in view the above principles in mind, we allow the assessee to raise the additional grounds. Hence, application dated 19th June 2019 is allowed and the additional ground raised by the assessee is admitted.
Since the additional ground raised by the assessee goes to the roots of the case and is legal in nature, therefore we though it fit to adjudicate the same firstly.
By way of additional ground, assessee has challenged the order of assessment u/s 143(3) r.w.s 147 of the Act as statutory notices u/s 143(2) of the Act was not issued at all, thus in this 4 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. way, according to assessee, AO erred in assuming the jurisdiction.
In order to ascertain the factual position, the bench directed Ld. DR to file the report in respect of issuance of notice u/s 143(2) of the Act or not. In this respect, Ld. DR filed report before the bench which has been taken on record, wherein vide letter no. DCIT-CC)-3(3) /Report to Sr. AR /ITAT/2019-20 dated 26.06.19, it was categorically submitted by DCIT CC – 3(3), Mumbai that ‘on perusal of record, it is seen that notice u/s 143(2) is not issued after filing of the return of income by the assessee in compliance to notice u/s 148 of the Act’.The letters filed by the DR and the AO are reproduced hereunder:
5 I.T.A. No. 3256/Mum/2017
6 I.T.A. No. 3256/Mum/2017
From the above letters filed by Department, it is crystal clear that notice u/s 143(2) was not issued by the AO. In this aspect, we also draw strength from the judicial pronouncements to the effect that issuance of notice u/s 143(2) is mandatoryand not merely procedural and if the notice is not issued/served by 7 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. the AO within the prescribed period, then in that eventuality, the assessment order stands invalid. 10. We have also considered the judgment of Hon’ble Supreme Court in the case of ACIT &Anr. Vrs. Hotel Blue Moon (2010) 321 ITR 0362 (SC), ACIT vrs. Greater Noida Industrial Development Authority (2015) 379 ITR 0014 (Allahabad HC) and Travancore Diagnostics Pvt. Ltd. Vrs. ACIT (2017) 390 ITR 0167 (Kerala HC), etc, wherein the Hon’ble Courts have taken a consistent view that in re- assessment proceedings, if notices are not issued u/s 143(2), then in that eventuality, the assessment order stands invalid. 11. We have also observed that Mumbai-tribunal in the case of Mehta Emporium Jewellers v. ITO in ITA No. 3769/Mum/2016 and CO No. 39/Mum/2018 vide common order dated 15.06.2018 had quashed assessment framed u/s 147 read with Section 143(3) of the 1961for the reasons that no notice u/s 143(2) of the 1961 Act was issued by the Revenue, by holding as under:
“6. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. The preliminary issue to M/s. Mehta Emporium Jewellers be decided is, as to whether the assessment is valid in the 8 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. absence of issue and service of notice u/s. 143(2) of the Act. The Hon'ble Jurisdictional High Court in the case of ACIT v. Geno Pharmaceuticals Ltd., (supra) held as under: -
“4. So far as Tax Appeals No.77/2012 and 78/2012 are concerned, in both these appeals, the ITAT has held that the issuance of notice after reopening of the case was mandatory and this order is under challenge. It is contended that the said order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01.04.2008, in which it is stated that in a case where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of the said Act which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of the said Act. Perusal of the order of the ITAT reveals that this aspect was not canvassed before the ITAT.
Apart from that, it is an admitted position that no notice under Section 143(2) had been issued while making assessment under Section 143(3) read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. The ITAT, after relying on the judgment of the Apex Court in R. Dalmia v. CIT [19991 236 1TR 480/102 Taxman 702,
9 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. came to the conclusion that issuance of notice under Section 143(2) was mandatory. The ITAT has taken into consideration the relevant provisions and has also taken into consideration the judgment of the Apex Court and relying on the said judgments, the ITAT has held that notice under Section 143(2) is mandatory and in the absence of such service, the Assessing Officer cannot proceed to make an inquiry on the return filed in compliance with the notice issued under Section 148. 6. Under these circumstances, no case is made out for interfering with the Tax Appeals No.77/2012 and 78/2012 since no substantial question of law is raised in both the appeals.”
The Kerala High Court in the case of Travancore Diagnostics (P.) Ltd., v. ACIT (supra) held as under “It is virtually admitted by the Revenue that no notice under section 14392) had been issued. It is settled position of law that omission on the part of the Assessing Officer under section 143(2) cannot be a procedural irregularity and that the same is not curable and that therefore, the requirement of notice under section 143(2) cannot be dispensed with. This emphatic statement of law, in the absence of issuance of a notice under section 143(2) by the revenue, would, therefore, inure to the benefit of the assessee, even though as noticed above, the contention of assessee that it was not aware of the proceedings under section 143 for the assessment year 2009-10 cannot be accepted. However, when the statute makes it imperative that notice under section 143(2) is to be issued, the omission or failure would then hit at the root of the jurisdiction. 'The extended question then is whether even if the assessee is deemed to have participated in the 10 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. proceedings under section 143, even without the Assessing Officer having issued the mandatory notice, would the revenue be entitled to the benefit provided under section 292BB of the Act. Section 292BB creates an estoppel against the assessee in claiming that no notice has been served on him, if he has participated in the proceedings. However, the said section does not in any manner grant any privilege to the Assessing Officer in dispensing with the issuance of a notice under section 143(2) of the Act. Since the jurisdiction under section 143 is founded on the issuance of a notice under section 143(2), the Assessing Officer could have assumed jurisdiction only after issuing a notice under section 143(2). Even the participation of the assessee would not provide the benefit under section 292BB to the revenue. The requirement that a notice be issued is mandatory and the Assessing Officer has no other option but to issue the notice before commencing the jurisdiction.”
We also find that the Coordinate Bench of the Tribunal in the case of M/s. Tiny Girl Clothing Company Private Limited in ITA.No. 3599/Mum/2016 dated 20.12.2017 considering the judgement of the Hon'ble Allahabad High Court in the case of CIT v. M/s. Salarpur Cold Storage (Pvt.) Ltd. [50 taxman.com 105] and the decision of the Hon'ble Madras High Court in the case of CIT v. Gitsons Engineering Co. [370 ITR 87] and the effect of provisions of section 292BB held as under: -
“5. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied upon. Before coming to the merits of the addition/disallowance, the preliminary issue in this case is regarding the invalid issue of service of notice u/s. 143(2) of the Act. On a reading of the Ld.CIT(A) order, it is 11 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. an admitted fact that notice u/s. 143(2) dated 19.01.2015 was issued and served on the assessee in the course of Assessment Proceedings. Proviso to section 143(2)(ii) mandates that no notice 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. In this case the return of income was furnished by the assessee on 20.09.2011 for the Assessment Year 2011
12 and the period for issue of notice u/s. 143(2)(ii) expired on 30.09.2012 i.e. six months from the end of the Financial Year in which return was furnished by the assessee. In the Remand proceedings also the Assessing Officer stated that notice u/s.143(2) dated 19.01.2015 was issued and served on the assessee.
In the case of CIT v. M/s. Salarpur Cold Storage (Pvt.) Ltd (supra) the Hon'ble Allahabad High Court considered a situation where the notice was issued beyond the period specified in the section and in such circumstances whether such notice is valid and consequent Assessment Order is valid or not. It was held that where the Assessing Officer fails to issue a notice within a period of six months as specified in the provisions of clause (ii) of Section 143(2) of the Act the assumption of the jurisdiction u/s. 143(3) of the Act would be invalid. While coming to such conclusion the Hon'ble Allahabad High Court also considered the decision of the ACIT v. M/s. Hotel blue Moon [321 ITR 362] and held as under: -
“Under clause (ii) of sub-section (2) of Section 143, the Assessing Officer is required to serve, on the assessee, a notice requiring him to attend the office or to produce evidence on which the assessee may rely in support of the 12 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. return, if the Assessing Officer 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. Under the proviso to clause (ii), it has been specified that no notice under clause (ii) 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. Service on the assessee of a notice within the period prescribed by the proviso presupposes the issuance of a notice for, it is only when a notice is issued, that it can be served. Thereafter, the provisions of sub-section (3) of Section 143 of the Act stipulate that on the date specified in the notice issued under clause (ii) of sub-section (2) of Section 143 of the Act, the Assessing Officer shall, after hearing the evidence as the assessee may produce and considering such other evidence as he may require and upon taking into account all relevant material, by an order in writing make an assessment of the total income or loss of the assessee. The jurisdiction of the Assessing Officer to make an assessment under Section 143(3)(ii) of the Act is premised on the issuance of a notice under clause (ii) of Section 143(2) of the Act. The proviso to clause (ii) of sub-section (2) of Section 143 of the Act stipulates that a notice must be served on the assessee no later than the expiry of six months from the end of the financial year in which the return has been furnished. If a notice is not even issued within the period of six months from the end of the financial year in which the return is furnished, there would be no occasion to serve it upon the assessee within the stipulated period.
In the present case, the facts which are not in dispute are that the assessee had filed its return of income on 30
13 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. September 2008 for AY 2008-09. The notice under Section 143 (2) of the Act ought to have been issued by 30 September 2009 which was the date of the expiry of the period of six months from the end of the financial year in which the return was furnished. A notice was, however, issued on 6 October 2009 much beyond the period of six months. In such a situation, there could be no occasion to serve the notice within six months since the very act of issuance was beyond six months.
Now, it is in this background that it would be necessary to consider the provisions of Section 292 BB of the Act. Section 292 BB provides as follows: -
"292 BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment. It shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was-
(a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner:
Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment."
Section 292 BB of the Act was inserted by the Finance Act, 2008 with effect from 1 April 2008. Section 292 BB of the 14 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. Act provides a deeming fiction. The deeming fiction is to the effect that once the assessee has appeared in any proceeding or cooperated in any enquiry relating to an assessment or reassessment, it shall be deemed that any notice under the provisions of the Act, which is required to be served on the assessee, has been duly served upon him in time in accordance with the provisions of the Act. The assessee is precluded from taking any objection in any proceeding or enquiry that the notice was (i) not served upon him; or (ii) not served upon him in time; or (iii) served upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to Section 292 BB of the Act, however, carves out an exception to the effect that the Section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292 BB of the Act cannot obviate the requirement of complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under Section 143 (3) of the Act, it is necessary to issue a notice under Section 143 (2) of the Act and in the absence of a notice under Section 143(2) of the Act, the assumption of jurisdiction itself would be invalid.
This principle is no longer in doubt having due regard to the law laid down by the Supreme Court in the decision in Assistant Commissioner of Income Tax & Another Vs. M/S Hotel Blue Moon. While construing the provisions of Chapter XIVB of the Act in relation to block assessments, the Supreme Court in that decision considered the effect of 15 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. Section 143 (2) of the Act. The Supreme Court held as follows: -
"...But Section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with.
The Supreme Court has, therefore, clearly held that the omission on the part of the Assessing Officer to issue a notice under Section 143(2) of the Act is not a procedural irregularity and is not curable. The requirement of a notice under Section 143(2) of the Act cannot be dispensed with.
In our view, where the Assessing Officer fails to issue a notice within the period of six months as spelt out in the proviso to clause (ii) of Section 143 (2) of the Act, the assumption of jurisdiction under Section 143 (3) of the Act would be invalid. This defect in regard to the assumption of jurisdiction cannot be cured by taking recourse to the deeming fiction under Section 292 BB of the Act. The fiction in Section 292 BB of the Act overcomes a procedural defect in regard to the nonservice of a notice on the assessee, and obviates a challenge that the notice was either not served or that it was not served in time or that it was 16 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. served in an improper manner, where the assessee has appeared in a proceeding or cooperated in an enquiry without raising an objection. Section 292 BB of the Act cannot come to the aid of the revenue in a situation where the issuance of a notice itself was not within the prescribed period, in which event the question of whether it was served correctly or otherwise, would be of no relevance whatsoever. Failure to issue a notice within the prescribed period would result in the Assessing Officer assuming jurisdiction contrary to law.”
In the case on hand we see that the notice u/s. 143(2) itself is dated 19.01.2015 which is beyond the date prescribed for issue of notice i.e. 30.09.2012. In such circumstances the Assessing Officer could not have issued any notice prior to 30.09.2012. Therefore, admittedly in this case as the notice u/s. 143(2) was issued beyond 30.09.2012 and in view of the decision of the Hon'ble Allahabad High Court the Assessing Officer could not have assumed jurisdiction in the absence of valid issue of notice u/s. 143(2) of the Act. Thus, respectfully following the said decision, we hold that there is no valid issue of notice u/s. 143(2) of the Act in this case and consequently the Assessment Order passed u/s. 143(3) is a nullity. Hence we quash the Assessment Order passed u/s. 143(3) r.w.s. 147 of the Act.”
The Revenue could not prove that the notice u/s. 143(2) has been issued and served on the assessee in the case on hand before us. Therefore, in the absence of issue and service of notice u/s. 143(2) of the Act the re-assessment made by the Assessing Officer u/s. 143 r.w.s. 147 of the Act dated 28.03.2014 for the Assessment Year 2011-12 became null and 17 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. void. Thus, we quash the Assessment Order passed u/s. 143 r.w.s. 147 of the Act. as bad in law.” 10. As we have held that Assessment Order is a nullity, we are not adjudicating the grounds on merits as they become only academic. Hence the other grounds are disposed off accordingly. The cross objection filed by the Revenue become infructuous.”
We have also observed that Mumbai-tribunal in another appeal in ITA no. 1744/Mum/2016 and ITA no. 1466/Mum/2016 for AY 2010-11 , vide common order dated 03.10.2018 in the case of Shri Sudhir Menon v. ACIT has quashed assessment framed u/s 143(3) read with Section 147 of the 1961 Act on the grounds that no notice u/s 143(2) of the 1961 Act was issued after filing of return in pursuance to notice u/s 148 of the 1961 Act, by holding as under:
“5. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case that an original return of income was filed by assessee on 31.07.2010 and the same was processed under section 143(1) of the Act. Thereafter a notice under section 148 of the Act was issued dated 01.04.2013 and consequently, the notice under section 143(2) of the Act was also issued on 03- 05-2013. The assessee in response to notice under section 148 and 143(2) of the Act submitted a reply, which is enclosed at 18 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. assessee’s paper book page 49 filed on 23.05.2013 and the same reads as under: - To The Asst. Comm. Of Income Tax
Central Circle-45,
Mumbai
Ref: Sudhir Menon
AY 2010-11
Sub Notice under section 143(2) rws 148
Sir,
With reference to your notice under section 143(2) read with section 148, we have to submit that return already filed be treated as filed in response to Notice under section 149. Hope your honour will find this in order.
Thanking you."
We find from the facts of the case that notice under section 148 of the Act dated 1.04.2013 and AO before filing of return by assessee in response to this notice, a notice under section 143(2) of the Act dated 03.05.2013 requiring the assessee to attend the office on 13.05.2013. Up to this date no return of income was filed by the assessee in response to notice under section 148 of the Act. Now, can the AO issue notice under section 143(2) of the Act in the absence of pending return of income. In our view, the provisions of section 143(2) of the Act is clear that notice can be issued only when a valid return is pending assessment. Accordingly, this notice
19 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. has no meaning. The assessee filed return of income under section 148 of the Act vide letter dated 23.05.2013 stating that the original return of income can be treated as return filed in response to notice under section 148 of the Act. It means that the assessee has filed return of income only on 23.05.2013. No notice under section 143(2) of the Act was issued by the Department on or after 23.05.2013. Can assessment be framed without issuing a notice under section 143(2) of the Act when the return was filed by the assessee in response to notice under section 148 of the Act? This issue has been examined by Hon’ble Bombay High Court Geno Pharmaceuticals Ltd. (supra), wherein it is held as under: -
“5. Apart from that, it is an admitted position that no notice under Section 143(2) had been issued while making assessment under Section 143(3) read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. The ITAT, after relying on the judgment of the Apex Court in R. Dalmia v. CIT [1999] 236 ITR 480/102 Taxman 702, came to the conclusion that issuance of notice under Section 143(2) was mandatory. The ITAT has taken into consideration the relevant provisions and has also taken into consideration the judgment of the Apex Court and relying on the said judgments, the ITAT has held that notice under Section 143(2) is mandatory and in the absence of such service, the Assessing Officer cannot proceed to make an 20 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. inquiry on the return filed in compliance with the notice issued under Section 148.."
Similar is the position in the case of Ms. MalvikaArunSomaiya (supra), wherein Hon’ble Bombay High Court has considered the similar issue.
Further, Hon’ble Delhi High Court in the case of Society for Worldwide Inter Bank Financial, Telecommunications (supra), wherein Hon’ble High Court considered identical situation on facts and held as under: -
“5. We are of the view that the impugned order does not call for any interference. Both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal have returned a concurrent and clear finding of fact that the notice under Section 143 (2) was issued on 23.03.2000 and since the return was filed on 27.03.2000, the notice was not a valid one and, therefore, the assessment completed on the basis of the notice was also invalid and was consequently set aside. It is for the first time before us that the learned counsel for the appellant contends that the notice, in fact, was issued on 27.03.2000 and not on 23.03.2000, the date which is recorded on the notice itself. No such contention was raised before the Lower Appellate Authorities. Consequently, the said contention cannot be raised before us for the first time.
However, even if we accept what the learned counsel for the appellant / revenue submits, it does not make the case any better for him. In para 3.4 of the memorandum of appeal, the appellant has stated that the return was filed by the assessee on 27.03.2000 and the notice under Section 143(2) was served upon the Authorized Representative of the assessee by hand when the Authorized Representative of the assessee came and 21 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. filed return. However, the date of the notice was mistakenly mentioned as 23.03.2000. 7. Assuming the aforesaid to be true, the notice was served on the Authorized Representative simultaneously on his filing the return which clearly indicates that the notice was ready even prior to the filing of the return. Section 143(2) of the said Act clearly indicates that where a return has been furnished under Section 139, or in response to a notice under Section 142(1), the Assessing Officer shall-
(i) Where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim.
(ii) Notwithstanding the aforesaid, if the Assessing Officer considers it necessary or expedient to ensure that the assessee has not under-stated the income or has not computed excessive loss or has not under-paid the tax in any manner, he may serve the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support return."
The provisions of Section 143(2) make it clear that the notice can only be served after the Assessing Officer has examined the return filed by the assessee. Whereas what para 3.4 indicates is that when the assessee came to file the return, the notice under Section 143(2) was served upon the Authorized Representative by hand. Thus, even if we take the statement
22 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. of the Assessing Officer at face value, it would amount to gross violation of the scheme of Section 143 (2) of the said Act.
In any event, we do not agree with the contentions raised by the learned counsel for the appellant that the notice was issued on 27.03.2000 in as much as the Tribunal has already returned a finding that the notice was issued on 23.03.2000. That being the case, no interference with the impugned order is called for.”
In view of the fact that notice under section 148 of the Act dated 1.04.2013 was issued and AO before filing of return by assessee in response to this notice, a notice under section 143(2) of the Act dated 03.05.2013 requiring the assessee to attend the office on 13.05.2013 was also issued. Up to this date i.e. 13.05.2013 no return of income was filed by the assessee in response to notice under section 148 of the Act. According to us, in view of consistent view of jurisdictional High Court and Delhi High Court, in the absence of pending return of income, the provisions of section 143(2) of the Act is clear that notice can be issued only when a valid return is pending for assessment. Accordingly, this notice has no meaning. The assessee filed return of income under section 148 of the Act vide letter dated 23.05.2013 stating that the original return of income can be treated as return filed in response to notice under section 148 of the Act. It means that the assessee has filed return of income only on 23.05.2013. No notice under section 143(2) of the Act was issued by the Department on or after 23.05.2013. According to us the assessment framed without issuing a notice under section 143(2) of the Act when the return was filed by the assessee in response to notice under section 148 of the Act, the assessment framed is bad in law. Accordingly, assessment is 23 I.T.A. No. 3256/Mum/2017 ShubhlaxmiDyetex Pvt. Ltd. quashed. This issue of assessee raised by way of additional ground is allowed. 10. The issue on merits in the appeal of assessee and that of the revenue need no adjudication as we have already quashed the assessment.” 13. Considering the facts of the present case as well as the settled position of law as enumerated in the above judgments, we hold that since in the present case, no notice was issued u/s 143(2) of the Act, thus assessment order passed by u/s 143(3) r.w.s 147 of the Act stands invalid. Resultantly, this additional ground raised by theassessee stands allowed.
Since, we have allowed the additional ground raised by the assessee, therefore in view of our above findings, the other grounds raised by the assessee, needs no adjudication.
In the net result, the appeal filed by the assessee stands allowed with no order as to cost.
Order pronounced in the open court on 1st July, 2019. (RamitKochar) (Sandeep Gosain) लेखासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनांकDated : 01.07.2019 Sr.PS. Dhananjay
24 I.T.A. No. 3256/Mum/2017
आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent आयकरआयुक्त(अपील) / The CIT(A) 3. 4. आयकरआयुक्त/ CIT- concerned 5. यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.