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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI C.N. PRASAD & SHRI RAJESH KUMAR
O R D E R
PER C.N. PRASAD, JM:
1. This appeal is filed by the assessee against the order of the Ld. CIT(A)-19, Mumbai dated 01.05.2012 pertaining to assessment year 2006-07.
This appeal was dismissed by the Co-ordinate Bench upholding the reopening of the assessment u/s. 148 of the Act and also the addition made towards unproved share capital by order dated 11.2.2015. This order was later recalled by the Tribunal for deciding the limited issue of validity of assessment order with regard to the non issue and service of notice u/s. 143(2) of the Act. Thus the limited issue to be decided is as to whether the assessment is bad in law in the absence of service of notice u/s. 143(2) of the Act. In the course of hearing, the Bench directed the Departmental Representative to seek comments and report from Assessing Officer with regard to service of proof of notice.
3. The Ld. DR furnished a copy of letter dated 3.2.2016 written by Asstt. Commissioner of Income Tax 12(2)(2), Mumbai observing as under:
“Vide the above referred letter dated 10.12.2015, the undersigned was directed to submit a detailed report on the issue i.e date of issuance and service of notice u/s 143(2) along with copy of proof. Apropos the same. it is submitted that the office copy of notice u/s 143(2) of the 1. T Act is not readily available at this time. However, as Honorable ITA T has already given a categorical finding that notice u/s 143(2) was available on record as mentioned in para 1 of the above referred letter, there was no justification on part of the assessee to raise this objection again by way of additional ground of appeal regarding service of notice u/s 143(2) of the act. The AR has not raised any objection before completion of re-assessment proceedings. It had appeared and cooperated in the ensuing re-assessment proceedings. The impugned ground were not raised before the Ld.CIT(A) either. Further AR itself has stated that the assessment order indicates hearing prior to date of issuance of notice u/s 143(2), which clearly indicates that the notice u/s 143(2) was issued. Hence the provisions of section 292BB of the Act are squarely applicable in this case particularly when, the fact that the notice u/s 143(2) was available on record has been accepted by Hon'ble ITAT and AR has itself admitted that notice was there while arguing that assessment order indicates hearing prior to date of issuance of notice u/s 143(2).
It may kindly be appreciated that the subject-matter is almost 5 years old. In the meantime, the department has also undergone a massive restructuring exercise. In view of these facts, the Dispatch Register for that year is not readily available”.
4. Referring to the letter, the Ld. DR submits that the dispatch register of the notice is not available and expressed his helplessness to provide the proof of issue and service of notice issued u/s. 143(2) of the Act.
The Ld. Counsel for the assessee placing reliance on the decision of Hon’ble Supreme Court in the case of CIT VS Hotel Blue Moon (2010) 321 ITR 363 submits that in absence of notice issued u/s. 143(2), the assessment is bad in law. He further placing reliance on the decision of Bombay High Court in the case of CIT Vs Mr. Salman Khan in of 2010 submits that the Hon’ble High Court has considered the effect of the provisions of Sec. 292BB of the Act and held that provisions of Sec. 292BB are not retrospective. Thus, it was held that in the absence of notice u/s. 143(2) and even though the assessee complied with all the requirements of appearing before the authorities, the High Court held that the assessment is bad in law.
6. Heard both sides perused the orders of lower authorities and we find that in this case the Revenue failed to prove that notice u/s. 143(2) has been issued and served on the assessee. The Jurisdictional High Court in the case of CIT Vs Salman Khan in Income Tax Appeal No. 2362 of 2009 dated 1st December, 2009 considered a similar situation where there is no issue of notice u/s. 143(2) of the Act and the effect of Sec. 292BB and held that the assessment is bad in law observing as under:
Heard. Perused appeal Following substantial questions of law are sought to be raised in the appeal. 1. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in cancelling the assessment order by holding that the assessment framed u/s.143(3)/147 cannot be held to be a valid assessment as the A.O. has not assumed jurisdiction by issue of notice u/s.143(2) for completion of the assessment? 2. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that sections 292BB & 292B were amended w.e.f. 01/04/2008 and are not applicable retrospectively, and mandatory notice u/s.143(2) has to be issued in this case, within the time limit prescribed under the Act? 3. Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the provisions of Section 292B were not applicable to the facts of this case through the section was introduced w.e.f. 01/10/1975? 4. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the assessment order passed u/s. 143 (3)/147, without issuing a notice u/s.143(2), though sufficient opportunity was given to the assessee to present his case and has complied with all the requirements of the questionnaire issued by the A.O.? 2. Learned Counsel for the respondent brought to our notice a judgment of this Court in the case of Commissioner of Wealth Tax Vs. HUF of H.H.Late J.M.Scindia (2008) 300 ITR 193 (Bom.). Following the said judgment, the appeal being ITXA (L) No.3475 of 2008 was disposed of wherein the same question of law was involved, which is question No.1 herein this appeal..
So far as first question involved in the present appeal is concerned, the same is squarely covered by aforesaid judgment of this Court.
So far as second question is concerned, it relates to the operation of 292BB & 292B which was amended w.e.f. 1st April, 2008 and was came into operation prospectively for the A.Y.19992000. In this view of the matter, second question can hardly survive and so far as question Nos.3 and 4 are concerned, they are nothing but different shade of question No.2.
5. In the above view of the matter, appeal stands dismissed in limine for want of substantial question of law with no order as to costs.
At this stage, we would like to mention that we will be failing in our duty, if we do not place it on record that advocates appearing on behalf of the Revenue are expected to know the recent judgments of this Court as well as that of the Apex Court. In all fairness they are expected to bring it to the notice of the Court while making their legal submissions.
7. But unfortunately, Mrs.Padma Divakar, learned Counsel appearing on behalf of the Revenue in this matter could not point out the aforesaid judgments of this court pleading ignorance for want of knowledge. We have noticed number of times in number of cases wherever she appears, either she is not ready with the matter or she is not able to articulate her submissions may be for want of legal knowledge. This Court had an occasion to bring this fact to the notice of the Higher Officers of the Department at Mumbai. On few occasions, we were compelled to summon the Officers of the Department to argue the matter. In most of the cases, for want of assistance, we found it difficult to do justice in the matter. Administration of justice needs assistance. We expect the Department and the Chairman of the CBDT to take corrective steps in the matter so as to enable this Court to do better justice between the parties.
The Prothonotary and Senior Master of this Court is directed to send a copy of this order to the Chief Commissioner of Income Tax and the Chairman, CBDT for further action”.
Respectfully following the said decision, we annul the assessment as bad in law in the absence of issue and service of notice u/s. 143(2) of the Act in time before completion of assessment.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 24th February, 2016.