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Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the Revenue is against the order of Commissioner of Income Tax (Appeals)-XXXVI, Kolkata dated 19.06.2013. Assessment was framed by ITO Ward-55(1), Kolkata u/s 144/147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 30.12.2011 for assessment year 2009-10. Grounds raised by Revenue are reproduced below:- “1. That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in quashing the notice u/s 148 ab initio and there by annulling the assessment made u/s 144/147 of IT Act, 1961.
2. That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in not examining the merits of the additions made in the assessment order u/s 144/147 when the assessee's writ petition challenging inter alia the notice u/s 148 dated 24/9/2010 was dismissed on 4/4/2011 by the Hon'ble Calcutta High Court ITO Wd-55(1) Kol. v. Dr. Sudhir Kr. Ghosh Page 2
3. That, on the facts and in the circumstances of the case, Ld CIT(A) ought to have appreciated that there is no legal conflict with respect to time between the issue of notice u/s 148 and that u/s 143(2), as the issue of notice u/s 143(2) can take place in all cases whereas the notice u/s 148 is issued where specific escapement is reasoned to have occurred - the latter being the case here
4. That, the interpretation allowed and accepted by the Ld CIT(A) is against the basic objectives of the provision of section 1471 148. First and foremost reason for invoking section 148 is the escapement of taxable income while the other issues are only secondary in nature
5. That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in law in not applying the interpretation of the Hon'ble Calcutta High Court in Jorawar Singh Baid -vs- ACIT & Ors [cited in 198 ITR 47] to the effect that it is open to the AO to invoke the jurisdiction u/s 147 even if remedies u/s 143(2) are available
That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in law by acting on the additional grounds of appeal presented by the assessee without intimating to the AO and this is nothing but a denial of natural justice
7. That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in law in not seeking the reasons as well as not examining the bona fides thereof as. to what prevented the assessee from raising such ground at the earliest
8. That, on the facts and in the circumstances of the case, Ld CIT(A) has erred in law in not appreciating that although the reasons for reopening were communicated to the assessee, he did not file any return in response to the notice u/s 148 and thus assessee's challenge to the notice is also not acceptable in view of the Hon'ble Supreme Court's guidelines laid down in GKN Driveshafts (India) Ltd -v- ITO [259 ITR 19].
That, on the facts and in the circumstances of the case, Ld CIT(A) ought not to have overlooked the facts that the additional ground of appeal preferred before himself had not been agitated before the AO in response to the notice u/ s 148.
That, on the facts and in the circumstances of the case, Ld. CIT(A) has overlooked the fact that the very validity of the notice u/s. 148 was not called d into question in the original grounds of appeal.
11. That, on the facts and in the circumstances of the case, Ld. CIT(A) has erred in law in not appreciating that the Hon'ble Allahabad High Court in its judgment in CIT-vs- Jora Singh cited in [2013] (32 taxmann.com 263) while upholding the validity of the notice u/s. 148 took into account the decisions relied upon by the Ld. CIT(A).”
ITO Wd-55(1) Kol. v. Dr. Sudhir Kr. Ghosh Page 3
Common issue raised in all the grounds of Revenue’s appeal is that Ld. CIT(A) has erred in quashing the addition made by the Assessing Officer on the ground that the notice issued u/s 148 of the Act was voidad initio.
The facts in brief are that the assessee in the present case is an individual and engaged in the business of Nursing Home, Magazine etc. The assessment for the year was completed under section 144/147 of the Act by the AO after making certain disallowance and additions to the total income of the assessee.
Aggrieved, assessee preferred an appeal before Ld. CIT(A) where assessee has challenged the validity of the issue of notice u/s 148 of the Act and submitted that there was time available to the AO for the issue of notice under section 143(2) of the Act but the AO chose to issue the notice u/s 148 of the Act which is invalid. Accordingly the Ld.CIT(A) quashed the assessment order.
Being aggrieved by this order of Ld.CIT(A) Revenue is in appeal before us.
Shri Soumitra Choudhury, Ld. Authorized Representative appearing on behalf of assessee and Shri Sallong Yaden, Ld. Departmental Representative appearing on behalf of Revenue.
Before us Ld. DR submitted that the gist of the assessment proceeding in all the section is to assess the actual of the assessee as per the provisions of the Act. So there is no difference whether the income is assessed u/s 143(3)/147/144 of the Act. In support of his claim Ld. DR has further relied in the decision of Hon’ble High Court of Punjab & Haryana in the case of Punjab Tractors Ltd. Vs. JCIT (2002) 254 ITR 242 wherein it was held as under :
ITO Wd-55(1) Kol. v. Dr. Sudhir Kr. Ghosh Page 4 “that the assessment for the relevant year was completed vide intimation under s. 143(1) and even an appeal was filed there against— Therefore, it cannot be said that assessment was not made—Intimation under s. 143(1) operates as an order of assessment unless the authority proceeds to give notice under s. 143(2) and passes an order under s. 143(3)—Impugned notice having been given almost a year before the date on which an order could be passed under s. 143(3), no prejudice has been caused to the petitioner—It is also not contended that the reasons for reopening were not relevant—Therefore, notice under s. 147/148 is not vitiated merely for the reason that a notice under s. 143(2) had not been issued to the petitioner”
Ld. DR further submitted that the assessee did not raise the issue of validity of the notice issued u/s 148 of the Act at the time of assessment and also the order of Ld. CIT(A) is silent that why the issue was not raised before the AO. Finally the ld. DR requested to restore the issue to the file of the CIT(A) for fresh adjudication and relied on the order of AO. On the other hand the AR relied in the order of Ld.CIT(A).
We have heard rival contentions and perused the materials available on record. From the aforesaid discussion we find that the AO has issued the notice to the assessee under section 148 of the Act on dated 24.09.2010 although the time limit for issue of notice under section 143(2)(ii) was available till 28.09.2010. Accordingly, the assessment was framed u/s 147 of the Act. Against this, assessee preferred an appeal before Ld.CIT(A) who quashed the order of the AO on the ground that the notice issued u/s 148 to the assessee is invalid and void ab-initio. Now, the issue before us is that whether the notice issued u/s 148 of the Act to the assessee is valid or not when the time was available for issuance of notice u/s 143(2) of the Act. We find that there are conflict order of various High Courts on the same issue favouring both Revenue and Assessee. However we find that the aforesaid issue is well settled by the judgmente of Hon’ble Supreme Court in the case of Nizam’s Supplemental Family Trust Vs. CIT (2000) 242 ITR 381 (SC) deciding the issue in favour of assessee by holding as under :
ITO Wd-55(1) Kol. v. Dr. Sudhir Kr. Ghosh Page 5 “It is well settled law that unless the return of income already filed is disposed of, notice for reassessment under section 148 cannot be issued, i.e. no reassessment proceedings can be initiated so long as assessment proceeding is pending on the basis of the return already filed are not terminated. According to the Revenue, it is immaterial whether the order is communicated or not and the only bar to the reassessment proceeding is that proceedings on the return already filed should have been terminated.”
We hold that the case law cited by Ld. DR shall not prevail in aforesaid facts and circumstances. Accordingly we relied on the judgment of Hon'ble Supreme Court in the case of Nizam’s Supplemental Family Trust (supra). Therefore we find no reason to interfere in the order of Ld. CIT(A). We uphold accordingly. These common grounds of Revenue’s appeal are dismissed.