BRUNO JOHN CABRAL,MUMBAI vs. ITO 21(1)(4), MUMBAI

This appeal filed by the assessee on 13.01.2015 is against the order of the CIT (A)-32, Mumbai dated 17.10.2014 for the assessment year 2007-2008.

At the outset, Ld Counsel for the assessee brought our attention to a legal issue raised in Ground nos. 1 and 2 and also revised grounds and submitted the following legal grounds required to be adjudicated before the addition on merits is taken up for adjudication. The said grounds read as under:- “1. Ld AO erred in assuming jurisdiction u/s 148 of the Act without service of notice u/s 148 of the Act on the assessee. 2. Ld AO erred in assuming the jurisdiction u/s 148 of the Act without requisite sanction as required u/s 151 of the Act and therefore, AO passed order u/s 144 r.w.s 147 of the Act is void-ab-initio and needs to be quashed.” 3. For adjudicating this legal issue, the case was repeatedly posed by the Bench since 25.07.2016 and a number of (13) opportunities were given to the parties for want of evidence in respect of service of the said notice u/s 148 of the Act and also the production of the records showing the sanction by the Addl. CIT u/s 158 of the Act. On 17.11.2016, a specific direction was given to the Revenue for want of above records and the Tribunal discussed in detail in the order sheet, the failure of the Ld DR in this regard. However, final opportunity was given to the Ld DR for complying with the directions and the case was adjourned to 19.12.2016. Subsequently, the case was came up for hearing on 12.1.2017 and when the above directions of the Bench was cited to the Ld DR, he simply filed a letter dated 12.1.2017 communicating the following:- “It is humbly submitted that the said case record is not traceable or available in the office of the undersigned.”

Further, Ld DR continued to deal with the merits of the addition and also highlighted the fact of assessee’s cooperation in the matter during the assessment proceedings. In short, it is the case of the Revenue that the assessee may not raise this legal ground in case of assessee’s cooperation during re-assessment proceedings.

Subsequently, before us, Ld Representatives of both the parties agreed to the proposition that the issue should be now decided either way and in case the appeal of the assessee is allowed on this legal issue, the Department should have leverage to file a Miscellaneous Application for recalling this order as and when an evidence for issue and service of the statutory notices u/s 148 and 143(2) of the Act was demonstrated with proof / evidences by the Revenue.

On hearing both the parties, we find, it is high time that the appeal of the assessee has to be decided either way. Further, it is a decided issue that the making of re-assessment u/s 148 of the Act without issuing / serving the said notice validly is unsustainable in law. This is the agreed position of the Ld Representatives of both the parties that the said proof of service of notice is not demonstrated as required in law. Revenue has failed to discharge the onus in this regard. Considering the same, we are of the opinion that we should dismissed the legal issue with the rider that the Department shall be free to approach the Bench u/s 254 of the Act as when it has the clear evidence in support of service of the said statutory notice u/s 148 of the Act / u/s 143(2) of the Act and also the approval in section 151 of the Act. Accordingly we order.

Regarding other grounds raised by the assessee on merits, we find, the adjudication of the same constitutes an academic exercise for the time being. Therefore, the relevant grounds are dismissed as academic.