Loading judgment…
No AI summary yet for this case.
Before: SHRI G. D. AGRAWAL & SMT SUCHITRA KAMBLE
This appeal is filed against the order dated 12/3/2012 passed by CIT(A) XVIII, New Delhi for the Assessment Year 2007- 08.
The grounds of appeal are as under:-
“1. That on the facts and in the circumstances of the case and in law, CIT(A) erred in not quashing the impugned assessment order for want of mandatory service of notice u/s 143(2) of the Act, within prescribed time limit, as objected to Ld. A.O during asst. proceedings, with affidavits and postal evidence.
2. That on the facts and in the circumstances of the case and in law, CIT(A) erred in not quashing the impugned assessment order for absence of valid service of notice u/s 143(2) of the Act on basis of imaginary and perverse findings.
3. That on the facts and in the circumstances of the case and in law, CIT(A) erred in confirming the disallowance of loss in futures and options transactions amounting to Rs.10,28,735/- on mere basis of suspicion, conjectures and surmises and non germane conditions.
4. That on the facts and in the circumstances of the case and in law, CIT(A) erred in ignoring our various submissions in disposing our appeal grounds to suit her permediated conclusion.
The Ld. AR submitted that the assessee is a partnership firm and is a sub-broker dealing in shares and securities. The assessee declared the sale of shares of Rs.14,87,41,342/- against the purchases of Rs.14,47,72,650/- for the assessment year under consideration. The assessee also declared sales by future and option (F & O) of Rs.70,52,868/- against the purchase under the same head of Rs.27,81,603/- and declared net loss from the business activities/trading of shares under F & O at Rs.10,28,735/- though the gross profit declared in profit and loss account at Rs.31,04,648/-. As per the assessment order, the case was selected after due approval of the CCIT and notice u/s 143(2) was issued. The said notice was issued on 29/09/2008 but was received after the time barring date on 30/09/2008 by the assessee. The Ld. AR further submitted that the assessee received the notice after the statutory period, therefore, Section 143(2) notice is not in accordance with law.
The Ld. AR further submitted that the CIT(A) has wrongly given the finding that the post office is the agent of the assessee and the date on which the notice is received by the post office is deem to be the date of service of notice. The Ld. AR further submitted that the reliance placed by the CIT(A) in respect of decision of Hon’ble Delhi High Court in the case of CIT Vs. Madhya Bharat Energy Corporation Ltd passed on 11th July 2011 is not at all relevant in the present case as the issue therein was totally different.
The Ld. AR relied upon the ITAT Delhi Bench decision in the case of OIP Sensor Systems India Liaison Office Vs. ADIT, dated 28th December, 2013. The issue raised herein was already decided in favour of the assessee. In Para 15 and 16 of the said decision clearly stated out that the limitation for service of notice u/s 143(2) in accordance with applicability of the proviso to Section 143(2) (ii) would be six months from the end of the Financial Year in which the return is furnished. The Ld. AR submitted that the limitation as laid down in the amended proviso to Section 143(2) (ii) is applicable in accordance with the Delhi High Court decision in the case of C. B Richards Ellis Moritius Ltd. vs. ADIT 2008 Taxman 323 (Delhi). The Ld. AR also relied on the decision of CIT Vs. Lena Diamonds Ltd. 281 ITR 1 (Delhi) as well as CIT (A) Vs. Vardhman State Pvt. Ltd 287 ITR 368 (Del).
As relates to the next point, the Ld. AR submitted that date of service of the notice u/s 143(2) is the date when the assessee received the notice and not the date of issuance of such notice. The authorities below have taken the date of issuance of notice i.e. 29/9/2008 as the deemed date of service. The Ld. AR on the other hand, maintains that since the notice was served after 30th September, 2008, the said date is beyond the limitation period prescribed by the applicable proviso to Section 143(2) (ii) of the Act. Thus, the Ld. AR pointed out that the CIT(A) has totally ignored the validity of service of notice in assessee’s own case and the same should have been set aside by the CIT(A). The Ld. AR further submitted that in view of this, the assessment order should have been quashed by the CIT (A).
The Ld. DR submitted that since the amendment to proviso in respect of Section 143(2) of the Act is not applicable in the present case because the Assessment Year 2007-08 will have governing effect of the earlier proviso, the CIT(A) order is just and proper and assessment order is rightly passed in assessee’s case.
We have perused all the records and heard both the parties. The notice u/s 143(2) was received after the expiry of the limitation period given under the Act by the assessee. Therefore, the contention of the Ld. AR appears to be just and proper. The post office is not an agent of the assessee. It is the service availed by the Department to serve the notice to the assessee. In- fact the department issued the notice u/s 143(2) on 29.09.2008, but dispatched the same on the 30.09.2008 which is the last date of limitation period. If it is a case of the Revenue that the notice was delivered through hand on the very same day, then it is possible that the notice was served well within the time. The decision referred by the assessee clearly discussed the issue before us and it has gone further in respect of the implications of the amended proviso whether it is applicable for Assessment Year 2007-08 or not. Therefore, the Revenue’s contention as relates to amendment to proviso does not sustain.
In result, the appeal of the assessee is allowed.
The order is pronounced in the open court on 7th of April, 2016.