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Income Tax Appellate Tribunal, [ DELHI BENCH: ‘F’ NEW DELHI ]
Before: SHRI SHAMIM YAHYA & SHRI YOGESH KUMAR U.S.
PER YOGESH KUMAR U.S., JM The present appeal has been filed by the Revenue against the order dated 23/06/2022 passed by the Commissioner of Income Tax Appeals-23, New Delhi (‘Act’ for short), for assessment year 2017-18.
The grounds of Appeal are as under:-
“1. The Id. CIT(A) has erred in holding that the notice issued u/s 143(2) of the 1.T. Act was time barred and consequently the assessment order u/s 143(3) of the I.T. Act is null and void.
DCIT Vs. Rohit Bansal 2. The Id. CIT(A) erred in holding that the return filed on 11.09.2018 in response to notice u/s 142(1) dated 27.08.2018 was non est.
3. The Id. CIT(A) erred in calculating the limitation of time for time of notice u/s 143(2) with reference to an invalid return filed u/s 139(4) on 07.02.2018.
4. The Ld. CIT(A) failed to appreciate that no return could have been filed u/s 153C by the assessee for assessment year 2017-18, when even as per CIT(A)'s own finding no notice u/s 153C was issued for the said year.
5. The CIT(A) failed to appreciate that the Revenue cannot be punished for the clerical mistakes committed by the Assessee of labling a return filed in pursuance to a notice u/s 142(1) as a return u/s 153C, when no notice u/s 153C was issued for the assessment year 2017-18.
6. The ld. CIT(A) has erred in observing that there was no mention of date of filing of return in notice u/s 143(2) of the 1.T. Act which has been selected for scrutiny without appreciating that this defect is curable u/s 292BB of the I.T. Act since the assessee has not raised any objection before completion of assessment, this issue has been raised by the assessee first time before the ld. CIT(A).”
Brief facts of the case as mentioned in the assessment order that the original return was filed by the assessee u/s 139(1) of the Act (‘Act’ for short)
declaring income of Rs.7,89,540/-. A search was conducted in the case of Akash Arora on 04/01/2017, during the course of search proceedings u/s 132
DCIT Vs. Rohit Bansal of the Act at the resident of Akash Arora, number of documents belongs to the assessee was found and seized, accordingly, proceedings u/s 153C/143(3) of the Act for Assessment Year 2011-12 to 2017-18 was initiated. An assessment order came to be passed for the Assessment Year 2017-18 u/s 143(3) of the Act by making addition of Rs. 1,95,47,595/- u/s 69A read with Section 115BBE of the Act. Aggrieved by the assessment order dated
28/12/2018, the assessee preferred an appeal before the CIT(A). The Ld.
CIT(A) vide order dated 23/06/2022 held that notice issued u/s 143(2) of the Act was time barred and consequently held that the Assessment order passed u/s 143(3) as null and void accordingly allowed the Appeal filed by the assessee. Aggrieved by the order of CIT(A) dated 23/06/2022, the Department filed the present appeal on the grounds mentioned above.
The Ld. Departmental Representative, addressing on the grounds of the Appeal made the written submission which is under:-
“The assessee was well awarded that the proceedings were under 153C of the Act. He asked for cross examination of Shri Akash Arora, on whose statements the assessee’s case was reopened and notice u/s 142(1) was issued. Normally notice u/s 153C issued after notice u/s 142(1) of the IT Act is issued in such search related matter. The assessee is trying to project that the 142(1) notice issued to assessee with regard to search related matter is equivalent to the regular 142(1) issue of calling to return/information. He did not raise this issue at the time of proceedings. The proceedings started on 07.02.2018 and the order was passed on 28.12.2018 for 10 months. When he was attending to AO for 10 months, why he did not raise any objection?
DCIT Vs. Rohit Bansal Please refer to Para 5.10 of AO’s order which speaks very clearly, how the assessee was directing Shri Akash Arora to by bullion from M/S Jain Abhusan Pvt. Ltd. and Jindal Billion. This proves that the unaccounted money belongs to assessee.
During assessment proceedings the assessee knew ail these facts and therefore avoided cross examination of Shri Akash Arora, even after he himself requested for it.
4. The CIT(A) simply ignored all these glaring facets and proceeded to as if the proceedings is a simple scrutiny proceedings u/s 143(2).
5. The A.O. not issuing 153C may kindly be considered as a revocable mistake u/s 292BB and restore the mater back to the file of CIT(A) for re-adjudication.”
Per contra, the Ld. Assessee's Representative submitted that the return
of income was filed by the assessee belatedly u/s 139(4) of the Act on 07/02/2018 and notice u/s 143(2) of the Act was issued on 15/10/2018 by the Assessing Officer, which is beyond the period of limitation as per proviso to section 143(2) of the Act i.e. within six months from end of the financial year in which return is furnished, further submitted that the last date by which scrutiny notice u/s 143(2) of the Act could have been issued for the return filed on 07/02/2018 was 30/09/2018. In view of the above, the finding of CIT(A) that notice issued u/s 143(2) of the Act dated 15/10/2018 by the Assessing Officer is time barred and assessment so framed by him u/s 143(3) of the Act is null and void requires no adjudication. Further submitted that, return filed by the assessee on 11/09/2018 under section 153C of the Act was non est and could not be taken by the Assessing Officer as no notice u/s 153C of the Act was issued by the Assessing Officer of the searched person to assessee for A.Y. 2017-18. Further submitted that only valid return of income which could have been acted upon by the Assessing Officer was dated
07/02/2018 u/s 139(4) of the Act and notice under section 143(2) of the Act being issued on 15/10/2018 by the Assessing Officer was time barred as rightly held by the Ld. CIT(A) in his order. The Ld. Counsel for the assessee also relied on following judicial pronouncements:
-ACIT & Anr. Vs. Hotel Blue Moon reported in 321 ITR 362 (SC) - CIT Vs. Chetan Gupta reported in 382 ITR 613 (Del)
We have heard both the parties and perused the material available on record. The following facts are not disputed, the return of income filed by the assessee belatedly u/s 139(4) of the Act on 07/02/2018 and notice u/s 143(2) of the Act was issued on 15/10/2018 by the A.O. The issuance of the notice u/s 143(2) is beyond the limitation as per proviso to section 143(2) of the Act i.e., within six months from end of the Financial Year in which return is furnished. Admittedly, the last date by which scrutiny notice u/s 143(2) of the Act could have been issue for a return filed on 07/02/2018 was 30/09/2018.
Thus, in our opinion as per proviso to Section 143(2) of the Act, the notice issued u/s 143(2) of the act dated 15/10/2018 by the AO is time barred.
The Hon’ble Supreme Court in the case of ACIT and Anothers Vs. Hotel Blue Moon reported in 321 ITR 362 (SC) and the Hon’ble Delhi High Court in CIT vs. Chetan Gupta reported in 382 ITR 613 (Delhi) held that failure to adhere to the time limit as prescribed under proviso to Section 143(2) of the Act results non-est of the assessment order. Thus, by following the above ratio of the Hon’ble Supreme Court and jurisdictional High Court (supra), we find no error or infirmity in the order of the CIT(A) in deleting the addition.
Though, the Ld. DR vehemently submitted that ‘the assessee was well aware that the proceedings were u/s 153C of the Act, the assessee was asked for cross examination of Sh. Akash Arora, who reopened and notice u/s 142(1) was issued, normally notice u/s 153C issued after notice u/s 142(1) of the Act is issued in search related matter and contended that the assessee is trying to project that the 142(1) notice issued to assessee with regard to search related matter is equivalent to the regular 142(1) issue of calling to return/information.
Further submitted that assessee did not raise any objection regarding limitation during the assessment proceedings. Therefore, the assessee cannot raise the objection/ground on the issue of time barring to notice u/s 143(2) before the Ld. CIT(A)’, we are not impressed with the submission made by the Ld. DR since, the A.O. is bound to follow limitation prescribed in the provisions of the Act while issuing the notice u/s 143(2) of the Act and the ratio laid down by the Hon’ble Supreme Court in the case of ACIT & Anor. Vs. Hotel Blue Moon reported in 321 ITR 362 (SC) and Hon’ble Delhi High Court in the case of CIT vs. Chetan Gupta reported in 382 ITR 613 (Del) negates the submissions made by the Ld. DR. Thus, we are of the opinion that the Ld. CIT(A) has committed no error in allowing appeal of the assessee in holding that notice issued u/s 143(2) of the Act was time barred and consequently declaring the assessment order
DCIT Vs. Rohit Bansal u/s 143(2) of the Act as null and void. Accordingly, we find no merit in the grounds of appeal Revenue.
In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 06th July, 2023.