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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A), Ghaziabad dated 13.04.2015 for the Assessment Year 2009-10. The assessee has raised the following grounds of appeal:- 2. “1. That no notice u/s 143(2) was received by the assessee during the statuary period i.e.30.09.2012, even it was not issued upto 30.09.2012. Hence, assessment made by the AO is bad in law in view of Supreme Court judgment in the case of Assistant Commissioner of Income Tax Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC) and CIT(A) is in error that the defect is favourable u/s 292BB of IT Act 1961.
2. That addition u/s 68 of Rs.11638500/- in assessee’s bank account is arbitrary, unjust and not according to law. Because section 68 of Rs. 11638500/- is assessee’s bank account is books of bank not the assessee and CIT(A) is in error in changing the section 69 without providing any opportunity to change the section. Hence, the finding of CIT(A) is bad in law.
3. That addition of Rs. 11638500/- is arbitrary, unjust and without considering full facts of the case.”
3. The brief facts of the case are that the assessee is an individual carrying out the business of spare parts. the ld Assessing Officer received the information Page 2 of 4 that in his saving bank account the assessee has deposited Rs. 11848500/- and therefore notice was issued u/s 148 of the Act on 30.05.2011. No compliance to this notice was made. On 03.08.2011 it was submitted by the assessee that the assessee has already filed its return of income, which may be treated as compliance to the notice u/s 148 of the act. Subsequently, the assessment u/s 144 was made as the assessee did not comply with the queries of the Assessing Officer who made an addition of Rs. 11638500/- as sum deposited in saving bank account of the assessee and further Rs. 9970/- being interest on that bank account. Thereby the assessed income was determined of Rs. 11779370/- against return income of Rs. 130900/- by framing assessment u/s 148 read with section 144 of the Income Tax Act on 18.03.2013. the assessee carried the matter before the ld CIT(A), who dismissed the appeal of the assessee on the original grounds as well as on additional grounds raised
with respect to non issue of notice u/s 143(2) of the Act as well as on the technical ground that sum deposited in bank account cannot be added u/s 68 of the Act. Therefore, the assessee is in appeal before us.
4. The first ground of appeal is with respect to non-issue of notice u/s 143(2) of the Act in time as it was issued on 26.10.2012. The ld AR has submitted that the statutory period of issue of notice expired on 30.09.2012. He relied on the decision of Hon'ble Supreme Court in case of ACIT Vs. Hotel Blue Moon 321 ITR 362. The ld DR relied on the order of held CIT(A) who had dealt with this ground 5. vide para No. 8.2 of his order. We have carefully considered the rival contentions. On reading of the 6. assessment order it is apparent that notice u/s 143(2) and 142(1) of the Act was issued on 26.10.2012 which should have been issued by 30.09.2009. The ld CIT(A) has held that in fact notice u/s 143(2) has been issued therefore, it cannot be said that no such notice was issued. He further relied on the decision of the Hon’ble Madras High Court in case of Areva T & D India Ltd Vs. ACIT 294 ITR 233 as well as the provisions of section 292BB of the Act. Hon'ble Supreme Court in case of ACIT Vs. Hotel Blue Moon (supra) has held that even in block assessment notice u/s 143(2) of the Act within prescribed time is mandatory. This is the case of reopened assessment where the notice Page 3 of 4 u/s 143(2) of the Act was issued on 26.10.2012 . The original notice u/s 148 was issued on 30.05.2011 asking the assessee to deliver the return within 15 days of the date of service of notice the assessee replied on 3.08.2011 asking the ld Assessing Officer to consider the original return filed as return in response to section 148 of the Act. However the ld AR has relied on the decision of Hon'ble Punjab and Haryana High Court in case of CIT Vs. Cebon Ltd 184 Taxmann 290 where after considering the provisions of section 292BB of the Act Hon'ble High Court has held that when the notice was not served within the stipulated time the order passed by the Assessing Officer is void. In the present case the notice has not been issued in time as admitted in the assessment order itself. Further with respect to provision of section 292BB hon delhi high court in case of Pr. Commissioner of Income-tax v. Silver Line 383 ITR 455 (Delhi)/ has held as under :- “13. In Shri Jai Shiv Shankar Traders (P.) Ltd. (supra), this Court has also discussed the distinction between a failure to 'issue' notice and a failure to 'serve' a notice on an Assessee. It was held, after noticing the decisions of the Allahabad High Court in CIT v. Rajeev Sharma [2011] 336 ITR 678/[2010] 192 Taxman 197 and CIT v. Salarpur Cold Storage (P.) Ltd. [2014] 50 taxmann.com 105/[2015] 228 Taxman 48 (All.) (Mag.) and the decision of the Madras High Court in Sapthagiri Finance & Investments v. ITO [2012] 25 taxmann.com 341/210 Taxman 78 (Mag.), that Section 292 BB of the Act would apply insofar as failure of 'service' of notice was concerned and not with regard to the failure to 'issue' notice. In other words, the failure of the AO, in re-assessment proceedings, to issue notice under Section 143(2) of the Act, prior to finalising the re-assessment order, cannot be condoned by referring to Section 292BB of the Act.
Consequently, the Court does not find merit in the objection of the Revenue that the Assessee was precluded from raising the point concerning the non-issuance of notice under Section 143 (2) of the Act in the present case in view of the proviso to Section 292BB of the Act.”
In view of the decision of the Hon'ble High Courts considering the provisions of section 292BB of the Act we also hold that the assessment framed u/s 148 read with section 144 of the Act is void in absence of valid issue of notice u/s 143(2) of the Act in time. Therefore, we reverse the finding of the ld CIT(A) and on this ground set aside the order of the lower authorities. In the result ground No. 1 of the appeal of the assessee is allowed.