9911796707
TMI Blog2017 (10) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, i.e. one quantum appeal and another penalty appeal and one appeal filed by the Revenue are directed against separate, but identical orders of the CIT(A)-22, Mumbai dated 1-8-2013 and 4-10-2013 and it pertains to the Asst. year 2006-07. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and disposed off, by this common order. 2. The Brief facts of the case extracted from ITA. No. 6470/M/2013 are that the assessee company engaged in the business of trading in electronic goods has filed its return of income for the A.Y. 2006-07 on 12-6-2007 declaring total income of ₹ 2,43,92,967/-. The case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) of the Act, were issued. The assessee neither appeared nor filed any details before the A.O. Therefore, the A.O. passed exparte assessment order u/s 144 of the Act, on 15-12-2008 determining the total income of ₹ 5,47,84,057/-, inter alia making additions/ disallowaces towards purchases, Bad debts, commission, travelling expenses, miscellaneous expenses and liabilities. 3. Aggrieved by the assessment order, the assessee has preferred an appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned above, the return was furnished on 12.06.2007 and the notice u/s.143(2) should have been served by 30/06/2008 whereas the facts clearly indicates that notice u/s.143(2) was served beyond one year time limit i.e. on 26.09.2008 and hence, the notice issued was time barred. In view of this, the order passed by the AO is bad in law. However, during the course of appellate proceeding, the AR had submitted that the matter maybe considered on merits and accordingly, the issues raised in the appeal are adjudicated on merits. 4. The CIT(A), did not stop there and he proceed to pass order on merits and partly allowed appeal filed by the assessee, wherein he deleted addition made towards disallowance of purchases, disallowance of bad debts, adhac disallowance of travelling expenses, miscellaneous expenses and addition towards liabilities. However, allowed partial relief towards disallowances of commission by allowing relief to the extent of ₹ 21,40,339/- and confirmed balance amount of ₹ 38,59,661/-. Thus, the CIT(A) partly allowed appeal filed by the assessee. Meanwhile, the A.O. levied penalty u/s 271(1)(c) for concealment of particulars of income. The CIT(A) for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court and also in accordance with spirit of law. The CIT(A) has rightly hold that notice issued is beyond time limit and his order should be upheld. 7. We have heard both the parties, perused materials on record and gone through the orders of authorities below. We also carefully considered provisions of section 143(2), pre amended proviso, amended proviso and case law relied upon by the ld. A.R. for the assessee. The only dispute is with regard to validity of notice issued u/s 143(2) of the Act. The assessee claims that notice issued u/s 143(2) is barred by limitation and hence, consequent assessment order is bad in law and liable to be quashed. Before, we go in to the facts of the case, let us understand, proviso to section 143(2) before amendment and after amended w.e.f. 1-4-2008. The proviso before amendment by the finance Act, 2008 w.e.f. 1-4-2008, makes it clear that notice u/s 143(2) shall be issued within 12 months from the end of the month in which return was filed. The amendment proviso w.e.f. 01-04-2008 makes it clear that no notice shall be issued after the expiry of six months from the end of the financial year in which return was furnished. The ld. D.R. argued th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under (page 795): Law to be applied is that in force in assessment year.- Though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied; and any amendment which is in force at the beginning of the relevant assessment year must govern the case though the amendment is made after the income underassessment is earned. In other words, the Income-tax Act as it stands amended on the 1st April of a financial year must apply to the assessment for that year. That is also the view taken by the Gujarat High Court in Maneklal Vallabhdas Parikh s case [1969] 72 ITR 637 (Guj). In the instant case, twelve months period from the end of the month in which the return was filed, expires in July 31,2008, so a notice was supposed to be served maximum on / or before August 1, 2008, but it was given on September 26, 2008. It is belated less than about two months. When the notice was issued after the expiry of the period of limitation, the effect of proceedings is void as per the ratio laid down by the Gujarat High Court in Deputy CIT v. Mahi Valley Hotels and Resorts [2006] 287 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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