SWAPNIL J. KOTHADIA,PUNE vs. INCOME-TAX OFFICER,

PER D. KARUNAKARA RAO, AM :

This is the appeal filed by the assessee against the order of CIT(A)-V,

Pune dated 29-09-2014 for the Assessment Year 2008-09.

extracted as under :

“1. Wrong treatment of the transaction being the transaction held as adventure in the nature of trade. On the circumstances and facts of the case and in law the Ld.CIT(A) erred in confirming the addition of Rs.15,75,000/- made by the AO in respect of sale of rural agricultural land by treating it as a capital asset but the Ld.CIT(A) has treated the transaction as adventure in the nature of trade. Relief claimed : The AO be directed to delete the addition of the amount being treated as Short Term Capital Gain.

2 ITA No.2230/PUN/2014 Swapnil J. Kothadia

On the circumstances and facts of the case and in law, the Ld.CIT(A) erred in confirming the addition on account of receipt of on-money from the purchaser by placing reliance on the statement of the purchaser recorded u/s.132(4) of the Income Tax Act, 1961. The addition made in relation to this aspect was Rs.19,16,666/-.

Relief claimed : The addition of Rs.19,16,666/- being receipt of on-money on sale of rural agricultural land be deleted.”

they are legal in nature. Ld. Counsel submitted that they relate to service of

statutory notice u/s.143(2) of the Act before reassessment is made and

submitted for admitting the same. Further, he submitted that no fresh facts or

investigation into facts is required. Therefore the same should be admitted and

adjudicated. For the sake of completeness, the said additional grounds are

extracted as under :

“1. Since the Ld. AO has failed to service on the appellant the notice u/s.143(2) of the I.T. Act, 1961, the impugned reassessment proceedings are bad in law, void ab initio, null and void and without jurisdiction and hence the impugned reassessment order may please be annulled.

as under. I shall take up the adjudication part in the following paragraphs.

Chartered Accountant by profession and filed his return of income declaring

total income of Rs.2,14,970/- and the same is accepted u/s.143(1) of the Act.

Subsequently, the AO noticed that the assessee is a land owner and received

cash at the time of sale of the same. For taxing the same, AO recorded the

reasons and issued notice u/s.148 of the Act dt. 27-03-2012. AO also issued

another notice u/s.142(1) of the Act and completed the assessment determined

3 ITA No.2230/PUN/2014 Swapnil J. Kothadia

the assessed income at Rs.37,06,630/- after allowing deductions under Chapter VIA. Eventually, AO added his share of 1/6th of Rs.1.10 Crores received by the

assessee. Further, CIT(A) dismissed the appeal of the assessee and confirmed

the additions. As such, no legal issue was raised relating to the issue and

service of statutory notice u/s.143(2) of the Act before the CIT(A) and the same

is raised for the first time before me as additional grounds.

submitted that it is mandatory for issue of notice u/s.143(2) of the Act before

an assessment is made u/s.148 r.w.s. 143(2) of the Act. He also referred to

various opportunities given to the AO to demonstrate the fact of issuing and

service of the said notice u/s.143(2) of the Act on the assessee before the

reassessment u/s.148/147 is completed. Ld. Counsel for the assessee also

drew my attention to the number of opportunities granted by the Tribunal

through Ld. DR for the Revenue to demonstrate the above facts of issuing and

service of the said notice. Further, bringing my attention to the AO’s letter

dated 09-11-2016, after filing a copy of the same before the Tribunal, Ld.

Counsel submitted that AO has gone on record in informing the ACIT, Range-9,

Pune about the fact of absence of said notice u/s.143(2) of the Act in the

assessment records. Further, Ld. Counsel for the assessee filed a copy of order

of the Pune Bench of the Tribunal in the case of Shri Dalichand H. Oswal Vs.

ITO – ITA Nos. 2080 to 2084/PN/2014, order dated 11-12-2015 to demonstrate

that failure to issue and serve the notice u/s.143(2) of the Act is not a curable

defect u/s.292B of the Act.

placed before the Tribunal reflects the absence of any evidence with regard to

the issuance or service of said statutory notice u/s.143(2) of the Act as per the

procedure. Further, Ld. DR drew my attention to the contents of the order

4 ITA No.2230/PUN/2014 Swapnil J. Kothadia

sheet and fairly submitted that the absence of any direct evidence in favour of

the issuance and service of the said notice on the assessee is evident.

However, Ld. DR did not rule out the issuance/service of notice by post.

service of the statutory notice u/s.143(2) of the Act. On perusal of the

assessment records and other documents placed before me, there is no direct,

indirect or conclusive evidence to demonstrate the events of (1) the issuance of

notice u/s.143(2) of the Act on the assessee as well as the (2) service of notice

on the assessee within the time limits provided in the statute. I have also

considered the Ld. DR’s submission that it may be possible for sending the said

notice through post. However, the same is not demonstrated by filing any

Acknowledgement due. Considering all these available factual matrix, I am of

the opinion that the reassessment made by the Assessing Officer on 26-03-

2013 is without issuance of notice u/s.143(2) of the Act and service of the

same. It is the requirement of the law that the said notice ought to have been

served on the assessee before the re-assessment is done. Further, it is settled

legal proposition that the onus is on the Revenue to demonstrate the service of

the notice on the assessee as per the procedure laid down in the statute. In

this case, the Revenue failed to discharge the same despite the number of

opportunities granted by the Tribunal. Therefore, I am of the view that, on this

preliminary issue itself, which is legal in nature, the additional grounds raised by

the assessee have to be allowed in favour of the assessee. Accordingly, the

additional grounds raised by the assessee are allowed.

adjudication of the same constitutes an academic exercise in view of the fact

that jurisdictional issue raised in the additional grounds have been allowed in

5 ITA No.2230/PUN/2014 Swapnil J. Kothadia

favour of the assessee. Accordingly, the grounds raised by the assessee on

merit are dismissed as academic.

Order pronounced on this 16th day of February, 2018.

Sd/- (D.KARUNAKARA RAO) लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 16th February, 2018. Satish

आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत

अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-V, Pune 3. आयकर आयु� / The CIT-V, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6.

आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार

स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune