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TMI Blog2017 (2) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1897, and the decision in the case of Banarsi Debi v. ITO reported in [1964 (3) TMI 11 - SUPREME Court] and the decision in the case of V. R. A. Cotton Mills (P) Ltd. v. Union of India [2011 (9) TMI 611 - PUNJAB AND HARYANA HIGH COURT ]. We hold that there was proper service of notice after taking into consideration the provisions of section 292BB of the Act. In view of the legal position narrated above, the same legal position is to be applied even for issuance of notice under section 143(2). Accordingly, we hold that there is a valid issue of notice and service under section 143(2) as well as service of notice on the assessee-company. - Decided in favour of revenue Maintainability of cross objections - Held that:- Legislature has chosen to use the expression "against such order or any part thereof" which means that cross-objections can be filed with reference to the same ground of appeal which is adversely decided against the respondent in appeal. If, there has been no adjudication on any of the grounds of appeal raised before the Commissioner Income-tax (Appeals), the cross-objections cannot be filed on such a ground though raised but not decided specifically. If the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29, 2012, and, finally, the assessment was completed under section 143(3) read with section 147 on October 31, 2012, treating the agricultural income as business income computed at ₹ 6,15,66,724 after setting off brought forward loss as claimed by the assessee of ₹ 6,15,66,724, tax was computed at nil. However, tax liability under the provisions of section 115JB was computed treating the income claimed as agricultural income as business income and the liability was computed. 3. Being aggrieved, an appeal was preferred before the Commissioner of Income-tax (Appeals)-I, Bangalore, who, vide order dated June 27, 2014, quashed the reassessment proceedings on the ground that the Assessing Officer had not issued notice under section 143(2) placing reliance on the following decisions : (i) CIT v. Lunar Diamonds Ltd. [2006] 281 ITR 1 (Delhi); (ii) Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC); and (iii) CIT v. CPR Capital Services Ltd. [2011] 330 ITR 43 (Delhi). The relevant paragraphs of the Commissioner of Income-tax (Appeals)'s order are reproduced below : 3.7 The appellant vehemently objected vide additional ground and also written submission that it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as participated in the assessment proceedings without raising any objection before the Assessing Officer and hence as per the provisions of section 292BB inserted by the Finance Act, 2008, with effect from April 1, 2008, the assessee is precluded to raise such objection in any other proceedings. 3. The learned Commissioner of Income-tax (Appeals) erred in holding the reassessment proceedings as invalid for non-issue of notice under section 143(2) without considering the Delhi High Court decision in the case of CIT v. Madhya Bharat Energy Corporation Ltd. reported in [2011] 337 ITR 389 (Delhi) which is in favour of the Revenue. 4. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the Commissioner of Income-tax (Appeals) be reversed and that of the Assessing Officer be restored. 5. The appellant craves leave to add, to alter, amend or delete any of the grounds that may be urged at the time of hearing of the appeal. 5. Before us, the learned Departmental representative vehemently contended that the Commissioner of Income-tax (Appeals) ought not to have held that no notice under section 143(2) was issued inasmuch as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in respect of service of notice and does not cover the case of issue of notice. In support of this proposition, he relied on the decision of the hon'ble Delhi High Court in the case of Principal CIT v. Silver Line [2016] 383 ITR 455 (Delhi); [2016] 283 CTR (Delhi) 148 and the decision of the hon'ble Allahabad High Court in the case of Nawal Kishore and Sons Jewellers v. CIT [2012] 79 DTR 241 (All). 7. We heard the rival submissions and perused the material on record. The only issue that arises for consideration in the present appeal is whether the notice under section 143(2) was issued before completion of the assessment pursuant to issue of notice under section 148 of the Act. From a perusal of the assessment order, it is clear that the Assessing Officer had given a categorical finding that after issuing notice under section 148 and after receipt of the letter from the assessee-company requesting to treat the original return of income as return in response to the notice under section148, the case was selected for scrutiny and required notice under section 143(2) was issued on March 29, 2012. It was further stated that even a questionnaire under section 142(1) was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought not to have come to such conclusion that no notice under section 143(2) was issued by the Assessing Officer even though there was failure by the assessee-company to discharge the burden of proving the allegation that no notice under section 143(2) was issued. Thus, there is perversity in the finding of the Commissioner of Income-tax (Appeals) to conclude that no notice under section 143(2) was issued. Furthermore, the learned counsel for the assessee also canvassed the proposition that no notice under section 143(2) was served on the assessee-company. Therefore, placing reliance on the following decisions, the Commissioner of Income-tax (Appeals) held that the assessment order is null and void. (i) CIT v. Lunar Diamonds Ltd. [2006] 281 ITR 1 (Delhi); (ii) Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC); and (iii) CIT v. CPR Capital Services Ltd. [2011] 330 ITR 43 (Delhi). The learned counsel for the assessee had neither disputed the fact that the assessee has participated in the assessment proceedings nor the assessee-company raised any objection before completion of the assessment about non-service of notice under section 143(2). Therefore, the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preted by courts in the context of such notices, it would be reasonable to assume that the expression was designedly used in the same sense. That apart, the expressions "issued" and "served" are used as interchangeable terms both in dictionaries and in other statutes. The dictionary meaning of the word "issue" is "the act of sending out, put into circulation, deliver with authority or delivery". Section 27 of the General Clauses Act (Act X of 1897) reads thus : "27. Meaning of service by post.-Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression 'serve' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post." It would be seen from this provision that Parliam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eved assessee. Section 33A(1) of the Act on the other hand authorised the Commissioner to suo motu call for the records of any proceedings under the Act in which an order has been passed by any authority subordinate to him and pass such order thereon as he thinks fit. The proviso, however, stated that the Commissioner shall not revise any order under that sub-section "if the order (sought to be revised) has been made more than one year previously". Construing this provision the High Court in O. A. O. A. M. Muthiah Chettiar's case held that the power to call for the records and pass the order will cease with the lapse of one year from the date of the order by the subordinate authority and the ratio of date of the knowledge of the order applicable to an aggrieved party is not applicable for the purpose of exercising suo motu power. Similarly in another decision reported in Rm. P. R. Viswanathan Chettiar v. CIT [1954] 25 ITR 79 (Mad), construing the time limit for completion of an assessment under section 34(2) of the Indian Income-tax Act, 1922, which provided that it shall be made "within four years from the end of the year in which the income, profit and gains we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s concerned is not dependent on the provisions of the particular statute, but is so under the general law. . . 18. Thus if the intention or design of the statutory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent authority, to make an order the date of exercise of that power and in the case of exercise of suo motu power over the subordinate authorities' orders, the date, on which such power was exercised by making an order are the relevant dates for determining the limitation. The ratio of this distinction may also be founded on the principle that the Government is bound by the proceedings of its officers but persons affected are not concluded by the decision.' The said principle of the issue of a notice or communication has also come up for consideration before the hon'ble Supreme Court in the context of the provisions of section 4 of the Contract Act, 1872. It has been held that the moment the proposer p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be possible for a Government servant to effectively thwart an order by avoiding receipt of it by one method or the other till after the date of his retirement even though such an order is passed and despatched to him before such date. An officer against whom action is sought to be taken, thus, may go away from the address given by him for service of such orders or may deliberately give a wrong address and thus prevent or delay its receipt and be able to defeat its service on him. Such a meaning of the word "communication" ought not to be given unless the provision in question expressly so provides. Actually knowledge by him of an order where it is one of dismissal, may, perhaps, become necessary because of the consequences which the decision in the State of Punjab v. Amar Singh Harika, AIR 1966 SC 1313 contemplates. But such consequences would not occur in the case of an officer who has proceeded on leave and against whom an order of suspension is passed because in his case there is no question of his doing any act or passing any order and such act or order being challenged as invalid.' Learned counsel for the petitioner has also relied upon the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of prejudice has to be considered. . . The emerging principles are (page 106 of 130 STC) : (i) Non-issue of notice or mistake in the issue of notice or defective service of notice does not affect the jurisdiction of the Assessing Officer, if otherwise reasonable opportunity of being heard has been given. (ii) Issue of notice as prescribed in the rules constitutes a part of reasonable opportunity of being heard. (iii) If prejudice has been caused by non-issue or invalid service of notice the proceeding would be vitiated. But irregular service of notice would not render the proceedings invalid; more so, if the assessee by his conduct has rendered service impracticable or impossible. (iv) In a given case when the principles of natural justice are stated to have been violated it is open to the appellate authority in appropriate cases to set aside the order and require the Assessing Officer to decide the case de novo.' In view of the said judgment, the date of receipt of notice by the addressee is not relevant to determine, as to whether the notice has been issued within the prescribed period of limitation. The expression 'serve' means the date of issue of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quity and weight of evidence, probabilities, facts and circumstance of the case. 2. The learned Commissioner of Income-tax (Appeals) erred in holding that the other grounds of appeal are not entertained and liable to be dismissed, without adjudicating the various grounds of appeal raised by the respondent/cross-objector on the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross objector that the order of assessment is bad in law and void ab initio for want of requisite jurisdiction especially, the mandatory requirements to assume juris diction under section 148 of the Act did not exist and have not been complied with and, consequently, the assessments requires to be can celled. 4. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that the learned Assessing Officer without giving copy of the reasons recorded and without allowing the respondent/cross-objector to file the objection for issue of notice under section 148 of the Act and without passing the speaking order, proceeded with the assessment is against the ratio of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the lands taken by the respondent/cross-objector on lease he ought to have treated the same as agricultural income under the facts and in the circumstances of the case. 11. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that the learned Assessing Officer is not justified in law in not granting the proportionate value of agricultural inputs out of the income constituting from business under the facts and in the circumstances of the case. 12. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that the learned Assessing Officer is not justified in law in levying interest under section 234B of the Act under the facts and in the circumstances of the case. 13. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that the calculation of interest under section 234B of the Act is not in accordance with law since the rate, period and quantum is not as per the provisions of the Act under the facts and in the circumstances of the case. 14. The learned Commissioner of Income-tax (Appeals) failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) or the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Assessing Officer (in pursuance of the directions of the Dispute Resolution Panel) or Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or sub- section(3A)." 15. From a bare perusal of the above provision, it is clear that the Legislature has chosen to use the expression "against such order or any part thereof" which means that cross-objections can be filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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