DCIT 1(3)(1), MUMBAI vs. SHRI RANGJI INVESTMENT P.LTD, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI ASHWANI TANEJA, AM (A.Y:2006-07) Dy. Commissioner of Income Shri. Rangji Investment P. Ltd. 1B, 1st Floor, 35 Court Chambers, Sir Tax Vs. 1(3)(1), Mumbai. Vithaldas Marg, New Marine Lines PAN No.AAICS5225J Appellant .. Respondent Revenue by .. Shri B.S. Bist, DR Assessee by .. Shri Vijay Mehta, AR Date of hearing .. 15-12-2016 Date of pronouncement .. 15-12-2016 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT (A)-3, Mumbai in appeal No. CIT (A)-3/IT 47/2012-13 dated 30-01-2015. The Assessment was framed by ACIT-Circle 1(3), Mumbai for the A.Y. 2006-07 vide order dated 29-12-2008 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’).

3. We have heard the rival contentions and gone through the facts and circumstance of the case. Briefly stated facts are that the return of income was furnished by the assessee on 2-11-2006. As per the provision of Section 143(2) of the Act, notice can be served on or before 30-11-2007. It was claimed by the Revenue that noticed u/s 143(2) of the Act was issued on assessee at 12-10-2007 and further, contention of Revenue was that the said notice was issued and affixed at the available address i.e. Saroos Building, 3rd Floor, 251 Dr. D.N. Road, fort, Mumbai-400001, which was served by fixture on 12-10-2007. It was claimed by assessee that the above said premises had been vacated by the assessee in October 2004 and the return for A.Y. 2006-07, the year under consideration, and subsequent returns were filed with the new address i.e. Vithaldas Thackersey Marg, New Marine Lines, Mumbai-400020. It was stated that finally the notice u/s 143(2) of the Act dated 07-11-2008 was served on the assessee on 09-11-2008 fixing the hearing on 12-11- 2008 at the right address and following objection were taken before AO: -

(i) The first notice u/s. 143(2) of the I.T. Act, 1961 dated 7.11.2008 was served to the assessee on 9.11.2008 fixing the hearing on 12.11.2008. (ii) On the said appointed date, the learned Asstt. Comm.has informed to representative of the appellant that the said notice is not a first notice as the first notice was issued and affixed at the address Soroos Building, 3 Floor, 251 Dr. D.N. Road, Fort, Mumbai 400 001 on 12. 10.2007. The validity of notice was aggrieved by the appellant during the assessment proceedings vide letter dated 18. 11.2008 which is reproduced below: (a) With effect from the, Asstt. Year 2005-06, the address of the assessee is 1-B, Is/ Floor, 35 Court Chambers, Sir Vithaldas Thackersey Morg, New Marine Lines, Mumbai 400020. (b). When notice u/s. 143(2) was issued to the assessee in the year 2006 at the address Saroos Building, 3111 Floor, 251 Dr. D.N. Road, Fort, Mumbai 400 001, the said address was not the address of the assessee. (c) The assessee has written the address 1-B, 1st Floor, 35 Court Chambers, Sir Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400020 in I.T. Returns submitted for Asstt. Year 2005-06, 2006-07 and so oh. Copy of acknowledgment of I.T. Return filed for Asstt. Year 2005-06 and 2006- 07 are enclosed herewith for your ready reference (Annexure- 1). (d) The address 1-B, 1st Floor, 35 Court Chambers, Vithaldas Thackersey Marg, New Marine Lines, Mumbai 400020 was also changed in Income Tax PAN Service Unit. Copy of letter issued by them is enclosed herewith (Annexure-2). (e) The expression used in Section 143(2) is serve on the assessee". Accordingly, mere issuing the notice 1) u/s. 143(2) does not confirm jurisdiction on the Assessing Officer for making assessment u/s. 143(3) of the I.T. Act, 1961. For assuming jurisdiction for making assessment u/s.143(3) of the I.T. Act, 1961, the notice u1s.143(2) is required to be served on the assessee before the expiry of 12 months from the end of the month in which the Return of Income filed and no such notice had been served on the assessee, in this regard, for the Asstt. Year 2006-07. (f) Since the instant case, the statutory provisions for completing the assessment of the assessee u/s. 143(3) of the Act for the Asstt. Year 2006-07 had not been complied with, any assessment made on the assessee u/s. 143(3) of the I.T. Act, 1961 will be without jurisdiction and accordingly, bad-in-law.” The AO completed the assessment and has not considered the objection raised by assessee but CIT(A) after considering the facts in entirety, discussed the facts as under: - 1.6. The undisputed facts of the case are that as per the above quoted provisions, notice u/s 143(2) was mandatorily required to be served within 12 months from the end of the month in which the return was furnished. In the instant case, the return was furnished on 02.11.2006. Therefore, the notice u/s 143(2) should have been served before 02.11 .2007. In the return of income, it has been categorically mentioned that the notice u/s 143(2) was issued on 12.10.2007. It is the AO's contention that the said notice was issued at the address of the appellant, as available in the AST Databank of the Department, i.e. Saroos Building, 3rd Floor, 251 Dr. D N Road, Fort, Mumbai - 400 001, which was served by affixture on 24.10.2007 at the above address. On the other hand, the appellant has submitted that the above premises had been vacated by the appellant in October, 2004 and the impugned return for AY 2006-07 and all subsequent returns have been duly filed with the new address i.e. Vithaldas Thackersey Marg, New Marine Lines, Mumbai - 400 020. The AC has not contradicted the above submissions of the appellant and has instead relied upon the order of the Punjab & Haryana High Court in the case of V R A Cotton Mills Pvt. Ltd., cited supra, wherein it has been mentioned that the words 'served' and 1issued' are interchangeable. 1.7. From the above sequence of events, it is clear that the assessee has filed its returns from AY 2005-06 on the New Marine Lines address. Despite the new address having been mentioned on the return, the AC had sent the notice to the old address from where the assessee had admittedly left, two years ago. The said notice u/s 143(2), issued on 12.10.2007, could not be served upon the assessee within the statutory limit as provided u/s 143(2) for scrutinizing the return of income. The second notice dated 07.11 .2008, was served on the assessee on 09.11 .2008 is clearly time barred by limitation in view of the proviso to section 143(2).” And finally quashed the assessment vide Para 1.11 as under: - 1.11. In view of the material placed on record and various judicial precedents, hold that the impugned assessment order passed by the Assessing Officer is void ab initio as the same has been passed without the mandatory requirement of serving the notice under section 143(2) upon the assessee within the time provided in the second proviso. Thus, the entire assessment and consequent additions made by the Assessing Officer. is quashed and the ground raised by the assessee is treated as allowed. Since the entire assessment has been quashed, the other grounds of appeal dealing with the merits of the addition have become infructuous.” Aggrieved, now Revenue is in appeal before Tribunal.

4. We have gone through the facts of the case and noticed from the above facts that the notice was issued by the Revenue on 12-10-2007 that was never send to assessee as that was issued on former address of the assessee i.e. Saroos Building, 3rd Floor, 251 Dr. D.N. Road, Fort, Mumbai-400001, whereas, the assessee shifted the above premise in October 2004 and vacated the same and also filed the return of income of relevant A.Y. 2006-07 and all subsequent returns on new address i.e. Vithaldas Thackersey Marg, New Marine Lines, Mumbai-400020. Qua this, objections were raised by the assessee before AO, which were never contradicted either by the AO or by the learned DR now. In such circumstances, we are of the view that the assessee’s case is not hit by the provisions of the Section 292 BB of the Act because there are specific objections that notice was not issued on the proper addressee rather it was issued on the old address of the assessee. The notice which was served on the assessee was issued on 07-11-2008 and the same was served on 09-11-2008 which is clearly time barred by limitation in view of provision of Section 143(2) of the Act. The view of ours is supported by the decision of Hon’ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC). In view of the above facts, we confirmed the order of CIT(A) and this issue of Revenue’s appeal is dismissed.