SUHAS S. HALDIPURKAR,THANE vs. ASST CIT PANVEL CIR, RAIGAD

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ITA 6693/MUM/2013Status: DisposedITAT Mumbai17 March 2017AY 2008-093 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 143(2) was invalid because it was served beyond the due date and was initially issued by an officer lacking jurisdiction. Consequently, the disallowance made under Section 40A(3) was deemed academic.

What were the facts?

The assessee's appeal concerns the assessment year 2008-2009. A key issue was the validity of the notice issued under Section 143(2) of the Income Tax Act, which was served after the prescribed due date and initially issued by an officer without jurisdiction.

What were the issues?

The primary issues were the validity of the Section 143(2) notice due to jurisdictional error and time-barring, and the subsequent disallowance under Section 40A(3).

Which sections of the Income-tax Act were involved?

Section 143(2),Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI SANDEEP GOSAIN

For Appellant: Shri M.N. Nandgaokar
For Respondent: Shri Vishwas Mundhe, DR
Hearing: 01.03.2017Pronounced: 17.03.2017

सुनवाई की तायीख / Date of Hearing : 01.03.2017 घोषणा की तायीख /Date of Pronouncement : 17.03.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 18.11.2013 is against the order of the CIT (A)-1, Mumbai dated 13.9.2013 for the assessment year 2008-2009. In this appeal, assessee raised the following grounds which read as under:- “1. On the facts and in the circumstances of the case and in law, the order u/s 143(2) for AY 2008-2009 is ab initio void and bad in law in view of the fact that the mandatory notice u/s 143(2) was not served by the jurisdictional Assessing Officer on the appellant within the time prescribed under the said section.

2. On the facts and in the circumstances of the case and in law, the Ld AO has erred in disallowing Rs. 4,10,233/- and CIT (A) has erred in confirming the disallo2wance u/s 40A(3) on account of expenditure incurred for the following purposes viz (i) repairs and maintenance – building account (Rs. 1,61,233/-); (ii) Purchase of Medicines (Rs. 2,20,200/-) and (iii) repairs and maintenance (Rs. 28,800/-) totalling to Rs. 4,10,233/-.”

2. Ground no.1 relates to the validity of the mandatory notice u/s 143(2) of the Act when the said notice was serviced after expiry of the due date. Tracing the background facts of the case, Ld Counsel for the assessee submitted that this is a case where the mandatory notice u/s 143(2) was originally issued on 27.8.2010 and the same was served on 30.9.2010, the date for service of the notice. But the undisputed fact with regard to this notice is that the same is issued by the officer who has no jurisdiction over the case. AR mentioned that the said notice was issued by the ITO-Ward-4(2), Thane, whose jurisdiction is only with respect to areas in Vasai, Vira and Nalasopara. When the dispute came to the notice of the Assessing Authority, a fresh notice was issued by the correct Assessing Officer ie ACIT-Circle (Panvel), Raigad Dist. But the notice issued by the concerned Assessing Officer is unfortunately served on the assessee only on 5.10.2010, which is much beyond the due date of 30.9.2010. In support of the above contention, Ld Counsel for the assessee filed a printout from the official website of the Income Tax Department ie www.incometaxindia.gov.in.

3.

On hearing the Ld Representatives of both the parties and on considering the above undisputed facts of the case, we are of the opinion, ground no.1 raised by the assessee is required to be allowed in its favour. It is also a fact that no evidence is brought to our notice with regard to the possible order of the IT Authorities having genuine jurisdiction, if any, over the period of time. Therefore, it is a case of serving of notice validly on the assessee by the Officer who has no jurisdiction. Further, it is also a case of service of notice dated 5.10.2010 invalidly by the valid Assessing Officer. On this account, Ground no.1 raised by the assessee regarding the jurisdiction and the limitation of time is allowed in favour of the assessee.

4.

Considering the relief granted to the above on the issue raised in ground no.1 of the appeal, the adjudication of the issue raised in ground no.2 becomes an academic exercise. Therefore, the same is dismissed as academic.

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