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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK
BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER
ITA Nos.371, 374 & 375/CTK/2015 Assessment Years:2008-09,2010-11 & 2011-12
Orissa Mining Corporation, Vs. DCIT, Circle -1(1), OMC House, Bhubaneswar. Bhubaneswar. PAN/GIR No. (Appellant) .. ( Respondent)
Assessee by : Shri Rajat Kumar Panda, DGM, OMC Revenue by : Shri Kunal Singh, CIT, DR
Date of Hearing : 05/07/ 2017 Date of Pronouncement : 06 /07/ 2017
O R D E R Per N.S.Saini, AM These are appeals filed by the assessee against separate orders all
dated 30.6.2015 of CIT(A)-1, Bhubaneswar for the assessment year
2008-09 u/s 143(3)/263/147 of the Act and for the assessment years
2010-11 and 2011-12 under section 143(3)/251/147 of the Act.
At the outset, in respect of Ground No.5 of the appeal for the
assessment year 2008-09 and Ground No.4 of the appeal for the
assessment years 2010-11 & 2011-12, it was argued by the Authorised
Representative of the assessee that the reopening of the assessment
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 was made by issue of notice u/s.148 of the Act dated 21.10.2014 for the
assessment year 2008-09 and dated 12.6.2014 for the assessment years
2010-11 and 2011-12. The Assessing Officer completed the
reassessment for the assessment year 2008-09 u/s 143(3)/263/147 of
the I.T.Act, 1961 on 30.1.2015 and for the assessment years 2010-11 &
2011-12 on 30.1.2015 u/s.143(3)/251/147 of the I.T.Act, 1961 without
issuing notice u/s.143(2) of the Act. He referred to page 21 of the order
of the CIT(A) for assessment year 2008-09 and page 13 of the order of
the CIT(A) for assessment year 2010-11 and page 14 of the order of the
CIT(A) for assessment year 2011-12 and pointed out therefrom that the
CIT(A) has stated that since no return was e-filed, it may not be possible
to generate notice u/s.143(2) through the system. However, during the
course of original assessment proceedings, notice u/s 143(2) was issued
and such return was explained by the assessee and examined by the
Assessing Officer during the original assessment proceedings, which is
the purpose of issue of notice u/s.143(2) of the Act. The same return
has been treated as the return filed u/s.148 which means the said return
was deemed to have been explained by the assessee to the Assessing
Officer and examined by the Assessing during the impugned assessment
proceedings , which is the purpose of issue of notice u/s.143(2) of the
Act. Thus, it was his submission that it is not in dispute that notice
u/s.143(2) was not issued to the assessee in the present assessment
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 years under appeal, before passing the order u/s.147 of the Act by the
Assessing Officer.
Ld A.R. of the assessee submitted that the issue is covered by the
decision of this Bench of the Tribunal in the case of the assessee itself in
assessment years 2008-09 and 2009-2010 in ITA Nos.372 and
373/CTK/2015 order dated 21.4.2017, wherein, the Tribunal quashed the
reassessment order for both the assessment years. He submitted that
the facts being identical, following the precedent, the reassessment
orders of the present years under appeal should also be quashed.
Ld D.R. agreed with the above submission of the assessee.
We find that the Tribunal in assessment years 2008-09 and 2009-
10 in ITA Nos.372 & 373/CTK/2015 order dated 21.4.2017 on similar
issue held as under:
“8. We have heard the rival submissions and perused the orders of lower authorities and materials available on record. 9. In the instant case, the assessment for the assessment years 2008-09 and 2009-2010 was reopened by issuance of notice u/s.148(2) of the Act dated 21.10.2014 for the assessment year 2008-09 and dated 22.10.2014 for the assessment year 2009-2010. Thereafter, the reassessment order for both the assessment years under consideration was passed u/s.143(3)/147 of the Act on 27.3.2014 for the assessment year 2008-09 and on 31.1.2015 for assessment year 2009-2010. It is also not in dispute that before passing the reassessment order, no notice u/s.143(2) of the Act was issued to the assessee in both the years. On the above stated facts, the contentions of ld A.R. of the assessee is that the impugned reassessment order passed for the assessment years under appeal should be quashed and for this he relied on the decision of Hon’ble Kerala High Court in the case of M/s. Travancore Diagnostics (P) Ltd (supra) and decision of Hon’ble Delhi High Court in the case of Shri Jai Shiv Shankar Traders Pvt Ltd.(supra).
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 10. On the other hand, the contention of ld D.R. is that as the assessee participated in the reassessment proceedings, therefore, the assessment order is valid and issue of notice u/s.143(2) before framing the reassessment order u/s.147 is not mandatory. For this, he relied on the following decisions: i) CIT vs Madhya Bharat Energy Corporation Ltd., (2011) 337 ITR 389 (Del) ii) Ashok Chaddha vs ITO, (2012) 337 ITR 399 (Del) iii) Mumbai Third Member Bench of the Tribunal in the case of Smt. Sumanalata Bansal vs. ACIT in ITA Nos.525 to 530/Mum/2008 for assessment years 1999-2000 to 2005-06. 11. We find that Hon’ble Kerala High Court in the case of M/s. Travancore Diagnostics (P) Ltd(supra) on the above issue has held as under: “32. It is virtually admitted by the Revenue that no notice under Section 143(2) had been issued. In Blue Moon (supra), the Hon'ble Supreme Court has already settled the position of law the 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, we are not impressed by the contention that he was not aware of the proceedings under Section 143 for the assessment year 2009-10. 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 applying the principles enunciated in Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC 147, which has been approved by the Hon'ble Supreme Court in several judgments.
The extended question then is whether even if the assessee is deemed to have participated in the 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
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 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. Here, we draw support from the judgment of the Hon'ble Supreme Court in Assistant Commissioner of Income Tax v. Greater Noida Industrial Development Authority [2015] 379 ITR 0014 (All.), wherein it was held as under:
"Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued."
The only benefit that Section 292BB obtains to the assessing officer is that after the issuance of such notice the assessee appears and participates in the proceedings, then he shall not he heard, subject to the proviso to the said section, that he had not been properly served with notice. We have no hesitation in holding that the Assessing Officer can claim and avail the benefit under Section 292BB and the assessee will be burdened by the rigour of estoppel contained therein only after a notice under Section 143(2) had been validly issued. When it is virtually admitted that no such notice had been issued, the Assessing Officer loses even the authority to enter into the jurisdiction under Section 143 and the participation or otherwise of the assessee would be of no avail. It is here that the words of Rowlat, J. vide supra in paragraph 5 of this judgment assumes climataric importance because in taxation nothing is to be intended and nothing can be presumed. If a notice under Section 143(2) has not been issued, the Assessing Officer cannot claim the benefit under Section 292BB and the claim that the earlier notice extracted in paragraph 29 of the judgment was intended to be the notice issued under Section 143(2) and that substantial compliance under Section 143(2) must be inferred, cannot be countenanced.” 12. Further, Hon’ble Delhi High Court in the case of Shri Jai Shiv Shankar Traders Pvt Ltd.,(supra) relying on the decision of Hon’ble Supreme Court in the case of ACIT vs. Hotel Blue Moon, (2010) 321 ITR 362 (SC) and the decision of Hon’ble Allahabad High Court in the case of CIT vs Salarpur Cold Storage (P) Ltd., (2014) 50 taxmann.com 105(All) observed that the requirement of issue of notice u/s.143(2) is mandatory and is not a procedural irregularity and the same is not curable and, therefore, the requirement of notice u/s.143(2) cannot be dispensed with. The Hon’ble High Court finally concluded as under:
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 “ The resultant position is that as far as the present case is concerned the failure by the AO to issue a notice to the assessee u/s.143(2) of the Act subsequent to 16th December 2010 when the assessee made a statement before the AO to the effect that the original return filed should be treated as a return pursuant to a notice under section 148 of the Act, is fatal to the order of re-assessment.”
As far as the reliance of the department on the decision of Hon’ble Delhi High Court in the case of CIT vs Madhya Bharat Energy Corporation Ltd., (2011) 337 ITR 389 (Del), we find that Hon’ble Delhi High Court in the case of Shri Jai Shiv Shankar Traders Pvt Ltd.,(supra) in para 9 of the order has stated that Hon’ble Delhi High Court in the case of CIT vs. Madhya Bharat Energy Corporation by order dated 17.8.2011 in review petition No.441/2011 in ITA No.950/2008, whereby the Court reviewed its main judgement in the matter rendered on 11th July, 2011 on the ground that the said appeal had not been admitted on the question concerning the mandatory compliance with the requirement of issuance of notice under section 143(2) of the Act. In this review order, the Hon’ble Court noted that at the time of admission of the appealon17th February, 2011, after noticing that in the said case that no notice under section 143(2) had ever been issued, the Court held that no question of law arose on that aspect. The upshot of the above discussion is that the decision of this Court in CIT vs Madhya Bharat Energy Corporation (supra) is not of any assistance to the revenue as far as the issue in the present case is concerned. 14. It is a settled position of law that where there are contrary decisions of Hon’ble High Courts on an issue and none of which is Hon’ble Jurisdictional High court, then the decision in favour of the assessee should be followed in view of the decision of Hon’ble Supreme Court in the case of CIT vs.Vegetable Products Ltd., 88 ITR 192 (SC). 15. Therefore, respectfully following the decision of Hon’ble Kerala High Court in the case of M/s. Travancore Diagnostics (P) Ltd and the decision of Hon’ble Delhi High Court in the case of Sri Jai Shiv Shankar Trades Pvt Ltd (supra), we hold that the impugned reassessment orders passed u/s.143(3)/147 without issuing notice u/s.143(2) is bad in law and, therefore, we quash the reassessment order for both the assessment years under consideration and allow the ground of appeal of the assessee.” 6. Facts being identical, respectfully following the precedent, we hold
that the impugned reassessment orders all dated 30.6.2015 passed
under section 143(3/163/147 for the assessment year 2008-09 and
under section 143(3)/251/147 for the assessment years 2010-11 and
ITA Nos. 371 , 373 & 374/CT K/ 2015 Asse ssment Years: 200 8-0 9,2 010 -11 & 20 11- 12 2011-12 without issuing notice u/s.143(2) is bad in law and, therefore,
we quash the reassessment orders for all the assessment years under
consideration and allow the ground of appeal.
As we have cancelled the reassessment orders all dated 30.6.2015
passed under section 143(3/163/147 of the Act for the assessment year
2008-09 and under section 143(3)/251/147 of the Act for the assessment
years 2010-11 and 2011-12, the other grounds of appeal of the assessee
on merits of addition have become infructuous and hence dismissed.
In the result, all the appeals of the assessee are allowed.
Order pronounced in the open court on 06 /07/2017 in the presence of parties. Sd/- sd/- (Pavan Kumar Gadale) (N.S Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Cuttack; Dated 06/07/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The appellant : Orissa Mining Corporation, OMC House, Bhubaneswar. 2. The Respondent. DCIT, Circle -1(1), Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1. Bhubaneswar. 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//
BY ORDER, SR.PRIVATE SECRETARY ITAT, Cuttack