RAKYAN'S FINE JEWELLERY (FORMALLY KNOWN AS M/S. VARUN GEMS),NEW DELHI vs. JCIT, RANGE- 33, NEW DELHI

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ITA 7178/DEL/2019Status: DisposedITAT Delhi25 August 2023AY 2007-08Bench: Shri C.M. Garg (Judicial Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 292BB of the Act, which deals with deemed service of notice, is applicable from AY 2008-09 onwards and not for the present AY 2007-08. Non-service of a notice under Section 143(2) renders the assessment order invalid.

What were the facts?

The assessee's appeal challenged the reassessment proceedings, arguing that a notice under Section 143(2) of the Income Tax Act was not properly served. The Assessing Officer completed the reassessment under Section 147/143(3).

What were the issues?

Whether the reassessment proceedings are valid when a notice under Section 143(2) was not properly served on the assessee, considering the applicability of Section 292BB for the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 147,Section 143(3),Section 292BB

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI

Before: Shri C.M. Garg

For Appellant: Shri Abhishek Mathur, CA
For Respondent: Shri Om Parkash, Sr. DR
Hearing: 21/08/2023Pronounced: 25/08/2023

O R D E R

1.

This appeal has been filed by the assessee against the order of the ld CIT(A)-31, New Delhi dated 25.06.2019 for AY 2007-08.

2.

The assessee has raised the following grounds of appeal:- “1. That the Hon'ble Commissioner of Income Tax (Appeals) has erred in the law as much as on the facts of the case by not appreciating the fact that the Learned Assessing Officer did not assume the jurisdiction to complete the reassessment proceedings as the notice u/sec. 143(2) of the Income Tax Act, 1961 dated 16.09.2014 have not been served on the appellant during the course of the reassessment proceedings and that the notice that have been actually served had been served even before the appellant had made making compliance to the notice u/sec. 148 of the Act and thus, the assessment completed by the learned Assessing Officer u/sec 147/143(3) of the Act is liable to be quashed.”

3. I have heard arguments of both the sides. The ld Assessee’s Representative (AR) submitted that no notice u/s 143(2) of the Income Tax Act, 1961 (for short the Act) has been served on the assessee as the ld CIT(A) noted in para 4.1.3. that notice u/s 143(2) of the Act was received un-served but derived contention of assessee by stating that section 292BB of the Act is applicable thus legal contention of assessee is not tenable. The ld AR placing Page | 1 Rakyan’s Fine Jewellery reliance on the order of Special Bench of ITAT in the case of Kuber Tobacco Products Pvt. Ltd Vs. DCIT 310 ITR 300 (Del) (SC) submitted that provision of section 292BB of the Act is applicable for AY 2008-09 onwards and the same is not applicable to present past Assessment Year 2007-08.

4.

On the other hand the ld Sr. DR submitted that the assessee did not raise any objection regarding non service of notice u/s 143(2) of the Act during assessment proceedings. Therefore, provision of section 292BB is applicable in favour of the Revenue and thus, legal contention of assessee may kindly be dismissed.

5.

On careful consideration of the above submission, I note that the Special Bench of ITAT in the case of Kuber Tobacco Products Vs. DCIT (supra) held that provision of section 292BB of the Act is applicable from AY 2008-09 onwards hence, the same cannot be applied to the present case of AY 2007-08.

6.

Since the ld CIT(A) in para 4.1.3 noted the fact of non-service of notice u/s 143(2) of the Act on the assessee and even if the assessee did not raise any objection to non-service of notice u/s 143(2) of the Act before the AO, the legal contention cannot be dismissed on the strength of provision of section 292BB of the Act as the same has no application to present AY 2007-10. As per decision of Hon’ble in the case of Alpine Electronics Asia Pte Ltd Vs. DCIT 341 ITR 247 (Del) non-service of notice u/s 143(2) of the Act makes assessment order invalid. Accordingly, ground No. 1 of assessee is allowed and consequently, impugned reassessment order u/s 147/143(3) of the Act is quashed being bad in law and invalid.

7.

No arguments on other grounds, hence, in absence of any submission I don’t deem it proper to decide other grounds of appeal

8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 25/08/2023.

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