2019 (3) TMI 500 - HC - Income Tax

Admission the additional ground - Non issuance of notice u/s 143(2) - jurisdictional issue - Tribunal admitted additional ground following National Thermal Power Co. Ltd. Vs. CIT 1996 (12) TMI 7 - SUPREME COURT - HELD THAT - It is no doubt true that the non issuance of notice can result in a jurisdictional issue. Therefore, we do not fault the Tribunal for having entertained the additional ground canvassed by the assessee. However, after hearing the arguments of the learned Senior Standing Counsel, we find that the Revenue did not have sufficient opportunity to meet this point. Can assessee take advantage of his own non compliance - address for service is of chartered accountant of the assessee and that there is an attempt to evade service. - AY 1995 -96 - AO served a notice u/s 142(1)dated 08.1.1996 on 24.01.2016 to CA- CA filed a letter dated 27.1.1996, requested for time and thereafter no compliance - Assessment time baring on 31.03.1998 - AO taken no further action - Return filed on 24.03.1998 - Department contention that it was impossible to make compliance in short time after filing of return - and HELD THAT - Tribunal, after admitting the additional ground, has not adverted to any of the contentions advanced by the Revenue and it is pleaded before us that the Revenue had not been given sufficient time to meet the point. In any event, the Tribunal, having admitted the additional ground, should have considered the contentions advanced by the Revenue by giving reasonable time and recorded its satisfaction as to why the matter should be remanded to the CIT(A). The matter has again gone back to the CIT(A) and we are of the considered view that the Revenue should be given full opportunity by the CIT(A) to canvass all the grounds raised before us. Service of notice u/s 143(2) - Held that - even if the Assessing Officer or the CIT(A) or the Tribunal issues notices to the authorized representative/chartered accountant/advocate, the notices will have to be issued to the assessee to their registered office of company.

Summary

Issues:
1. Remitting the case to the file of the Commissioner of Income Tax (Appeals) to consider the additional ground raised by the assessee regarding non-issue of notice under Section 143(2) by the Assessing Officer.
2. Admitting the additional ground raised by the assessee and allowing the assessee to take advantage of their non-compliance with provisions of the Income Tax Act.
3. Lack of transparency in the Department's approach during assessment, specifically regarding the non-issuance of notice under Section 143(2) and delays in completing the assessment.

Analysis:
1. The High Court addressed the first issue of remitting the case to the Commissioner of Income Tax (Appeals) for considering the additional ground raised by the assessee regarding non-issuance of notice under Section 143(2). The Tribunal remanded the matter to the CIT(A) based on the Supreme Court's decision allowing the admission of additional grounds. The High Court acknowledged that non-issuance of notice can raise jurisdictional issues and found no fault in the Tribunal's decision to entertain the additional ground. However, the Revenue did not have sufficient opportunity to address this point, leading to concerns about procedural fairness.

2. Regarding the second issue of admitting the additional ground raised by the assessee, the High Court noted the lack of transparency in the Department's approach during assessment. The Court highlighted that the assessee, a private limited company, failed to file their return of income for the relevant year within the specified timeline. The Court criticized the delay in completing the assessment and the lack of explanation for not taking action promptly. The High Court emphasized the importance of addressing compliance issues and ensuring procedural fairness in tax assessments.

3. The third issue focused on the lack of transparency and delays in the Department's approach during the assessment process. The High Court highlighted discrepancies in the service of notices and the failure to adhere to timelines for filing returns and completing assessments. The Court emphasized the need for clear communication, adherence to procedural requirements, and timely actions by the Assessing Officer to avoid undue delays and ensure fair treatment of taxpayers. The Court dismissed the appeal while directing the Revenue to present relevant legal decisions to the CIT(A) for further consideration, emphasizing the importance of addressing all grounds raised by the parties in accordance with the law.