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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R
PER MAHAVIR SINGH, JM:
1. This appeal by the assessee is preferred against the order of the CIT (A)- 34, Mumbai in appeal No.CIT (A)-34/ITO-19(2)(3)/IT-223/13-14 dated 30-12-2014. Assessment was framed by the ITO, Ward -19 (2) (3), Mumbai vide his order dated 22-03-2013 for the assessment year 2009-10 u/s 143(3) of the Income Tax Act, 1961 (hereinafter “the Act”).
2. At the outset it is noticed that the assessee has filed additional grounds in regard to jurisdiction. The assessee challenged the legality of the order on the issue that no notice u/s 143(2) of the Act was issued by the AO for framing the assessment. For this, the learned Counsel for the assessee drew my attention to Ground No.3 of additional Grounds which reads as under:- “3. On the facts and in the circumstances of the case and in law the Order passed by the learned AO in absence of any notice u/s. 143(2) the Order passed is illegal in nature and thus a nullity”.
3. The learned Counsel for the assessee stated that this being a jurisdictional issue and the facts are available on records, this ground needs to be admitted and adjudicated in terms of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Corporation Ltd. Vs CIT (1998) 229 ITR 383 (SC). On query from the Bench, the learned Sr. DR has not argued on admissibility of additional grounds. In view of the fact that being a legal issue and goes to the root of the matter, hence, it needs adjudication. Even, the facts regarding this legal issue are available on record and nothing new is required for adjudication of the same. Hence, I admit the ground and adjudicate the same.
Briefly stated facts are that the AO framed assessment u/s 143 (3) read with Section 147 of the Act vide order dated 23-03-2013 wherein he has noted as under:- “Accordingly the Assessing Officer has reopened the case for re assessment after recording the reason for doing so and thus notice u/s 148 was issued on 09.03.2012 and was duly served upon the assessee on 12.03.2012. Subsequently, notice u/s 142 (1) was issued and details were called for”. The learned Counsel for the assessee stated that no notice u/s 143 (2) of the Act was issued by the AO for framing assessment despite the fact that notice u/s 148 of the Act was issued on 09-03-2012 and which was served upon the assessee on 12-03-2012. The learned Counsel for the assessee also drew my attention to Page22 of the assessee’s paper book by virtue of which it was informed to the Revenue that the assessee has already filed income tax return for the relevant assessment year 2009-10. He also filed copy of the complete set of audited accounts for the year ended on 31st March, 2009 by the said letter. The relevant portion of the said letter dated 05-10-2012 reads as under:-
Copy of the Income Tax return uploaded for the Asst Year 2009- 10.
A complete set of annual accounts along with copy of Tax Audit Report for the year ended 31.03.09. We request you to kindly take the above details on record. We shall be grateful for the same”. The learned Counsel for the assessee stated that once it was informed to the Department/Revenue that the assessee has filed original return of income; the same should be treated as return filed in response to the notice u/s 148 of the Act. He also made a statement at the Bar that even verbally the AO was informed that return originally filed may be treated as the return filed in response to the notice u/s 148 of the Act. The learned Counsel for the assessee drew my attention to the decision of the Hon’ble Delhi High Court in the case of CIT Vs Shri Jai Shiv Shankar Traders Pvt. Ltd. [2016] 383 ITR 448 (Delhi). He also referred to the judgment of the Hon’ble Delhi High Court in the case of Pr. CIT Vs Silver Line [2016 383 ITR 455 (Delhi).
On the other hand, the learned Sr. DR contested the arguments of the learned Counsel for the assessee that the assessee has filed return or income and even the letter filed by him indicates that the letter means that the original return is to be treated as return filed in lieu of the notice issued u/s 148 of the Act. According to him, in cannot be inferred that the meaning of the letter gives indication that the assessee has filed information that it has filed e-return for assessment year 2009-10 indicates that it be treated as return in response to notice u/s 148 of the Act. (a copy which was enclosed with the letter). The learned Sr. DR admitted that no notice u/s 143(2) of the Act was issued in this case and 148 of the Act and according to him, the AO has rightly issued notice u/s 142 (1) of the Act and called for the details. The learned Sr. DR stated that the case law cited by the learned Counsel for the assessee support the Revenue and for this he read out the case law of Shri Jai Shiv Shankar Traders Pvt. Ltd. (supra) and explained that the facts before the Hon’ble Delhi High Court was that the AR of the assessee appeared and informed the AO that the return originally filed should be treated as return filed pursuant to the notice issued u/s 148 of the Act. In view of this fact, the learned Sr. DR urged before the Bench that assessment be treated as valid.
I have heard the rival contentions and gone through the facts and circumstances of the case. Admitted facts are that no notice u/s 143(2) of the Act was issued after issuance of notice u/s 148 of the Act by the AO. The learned Sr. DR before me produced the assessment records from where it is gathered that no notice u/s 143(2) of the Act was ever issued by the AO for framing of assessment after issuance of notice u/s 148 of the Act. As explained by the learned Counsel for the assessee and the letter filed before the AO, which is enclosed in the assessee’s paper book at page 22, which clearly reveals that the assessee has filed return of income originally as e-return for the assessment year 2009-10 and copy of the same was enclosed with this letter. The learned Counsel for the assessee also made a statement at the Bar that he has informed the AO to treat the e-return filed by the assessee as return filed in response to the notice u/s 148 of the Act. In view of this fact, now, I am turning to the case laws relied upon by the learned Counsel for the assessee in the case of Shri Jai Shiv Shankar Traders Pvt. Ltd.
(supra) wherein the Hon’ble Delhi High Court relying on the judgment of the Hon’ble Supreme Court in the case of ACIT Vs Hotel Blue Moon [2010] 321 ITR 362 (SC) has held that if notice u/s 143(2) was not issued to the assessee before completion of assessment or reassessment, then such reassessment was not sustainable in law. The relevant observation of the Hon’ble Supreme Court reads as under:- “The assessee’s further appeal has been allowed by the Income-tax Appellate Tribunal by the impugned order. Relying inter alia, on the decision of t he Supreme Court in Ass. CIT V. Hotel Blue Moon [2010] 321 ITR 362 (SC) and a plethora of judgments of the High Courts, the Income-tax Appellate Tribunal concluded that for completing the assessment under section 148 of the Act, compliance with the procedure under section 143(2) was mandatory. It was held that if notice was not issued to the assessee before completion of the reassessment, then such reassessment was not sustainable in law”. It is argued by the learned Sr. DR that that this issue of non-issuance of notice u/s 143(2) of the Act is curable and can be cured by the provisions of Section 292BB of the Act. I have gone through the provisions of Section 292BB of the Act and noticed that these provisions will not apply where notice has not at all been issued but will apply only in the cases where notice issued but not served upon the assessee, not served upon him in time and served upon the assessee in an improper manner. Here, in the present case, none of the conditions as prescribed u/s 292BB of the Act is prevailing and hence, the provisions will not apply. The present case is squarely covered by the decision of the Hon’ble Supreme Court in the case of ACIT Vs Hotel Blue Moon (2010) 321 ITR 362 (SC). In the given facts and circumstances and the precedents as discussed above, I am of the view that once the notice u/s 143(2) of the Act is not issued at all by the Revenue for completing the reassessment proceedings by issuing notice u/s 148 of the Act, the Section 292BB of the Act. Accordingly, I quash the reassessment and allow the appeal of the assessee.
As regards to the other issues on jurisdiction as well as on merits, I need not to go into the same because reassessment proceedings is quashed on jurisdictional issue of non-issuance of notice u/s 143(2) of the Act.