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TMI Blog2018 (2) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... ner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused. Notice under Section 147/148 of the Act was issued at the end of the limitation period. Noticeably, Assessment Order for the assessment year 2013-2014 was passed on 31.03.2016, one year earlier. Second lapse is also apparent. Despite correctly noting the background, notice under Section 147/148 of the Act was not addressed in the correct name and even the PAN Number mentioned was incorrect. Nevertheless, human errors and mistakes cannot and should not nullify proceedings which are otherwise valid and no prejudice had been caused. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rregularity and procedural lapse. Section 292B is relied and is applicable. No prejudice has been caused. The assessment proceedings are pending and would be decided on merits. Reasons to believe are elaborate and detailed and reflect honest and objective belief that income has escaped assessment. 5. In the present case, the return for the assessment year 2010-2011 filed by M/s Sky Light Hospitality Pvt. Ltd. was processed under Section 143(1) of the Act and was not subjected to scrutiny assessment. 6. We begin by referring to the reasons to believe. The relevant portion of the reasons to believe read as under:- 1. A Tax Evasion Petition (TEP) has been sent by ADIT lnv, Unit-3(1), Delhi vide F.No./ADIT(Inv.)/U-3(1)/2016-17/563 regarding the assessee. (a). Brief facts of the case: The assessee was previously called M/s Sky Light Hospitality Pvt Ltd. is presently known as M/s Sky Light Hospitality LLP having converted into LLP from company on 13.05.2016 under Limited Liability Partnership Act, 2008. (b). The assessee entered into purchase of property with M/s Omkareswar Properties Pvt Ltd. situated at Mauja Shikohpur on 28.01.2008 for which payment was done against p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and net capital decreased to ₹ 31,72,43,305/-. The assessee has also not been able to satisfactorily explain the source of ₹ 35,00,00,000/-. (e). Thus, the amount of ₹ 35,00,00,000/- received by the assessee during FY 2009-10 (pertaining to AY 2010-11) has escaped assessment. (f). Further, assessee had purchased land at Bikaner for a consideration of ₹ 79,56,530/- for which the source of money has not be satisfactorily explained in reply to summons by the investigation. Thus, the above amount of ₹ 79,56,530/- has escaped assessment 2. In view of the above peculiar facts the undersigned has reason to believe that the income of the assessee has escaped assessment as per the provisions stipulated in Explanation2 (b) to Section 147 of the Act which reproduced below: where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance of relief in return; XXXXX 6. In view of the above case laws and the material available on record, it is evident that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. After going through the reasons, we are satisfied that the reasons to believe show and establish a live link and connect with the inference drawn that income had escaped assessment, which is required for issuance of notice under Section 147/148 of the Act. Reasons to believe refer to several facts and information that had come to knowledge and was available with the Assessing Officer. At this stage, when notice is issued under Section 147/148 of the Act, firm and conclusive findings are not required for merits would be examined and thereafter final finding recorded in the assessment order. As long as, there is honest and reasonable opinion formed by the Assessing Officer and the reasons to believe are not mere reasons to suspect , the courts should not interject to stop the adjudication process and scrutiny on merits. Absolute certainty is not required at the time of issue of notice and at the same time, reasons to believe must not be based on mere suspicion, gossip or rumour. The said test and criteria, we have no hesitation in holding, is satisfied in the present case. There is evidence and material on record to justify issue of notice under Section 147/148 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and mistake has led to this litigation. We have to examine whether this error and mistake is fatal or protected and shielded under Section 292B of the Act. The respondent relies on the statutory provision because of the error and mistake. Aid and reliance on a statutory provision, if applicable, cannot be denied for the reasoning and justification given in the order dated 19.11.2017. 13. Section 292B of the Act, enacted by Tax Laws (Amendment) Act, 1975, reads:- 292-B. Return of income, etc., not to be invalid on certain grounds.- No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. The said provision had come up for consideration before a Division Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was any other firm/concern at the same address by the name of Jagat Novel Exhibitors. In the present case, we do not think that failure to mention the words Principal Officer and the specific words Pvt. Ltd. or the use of the abbreviation P.L has caused or could have caused any confusion or has resulted in vagueness which justifies the quashing of the entire assessment proceedings and the consequent assessment orders. 29. Object and purpose behind Section 292-B is to ensure that technical pleas on the ground of mistake, defect or omission should not invalidate the assessment proceedings, when no confusion or prejudice is caused due to non-observance of technical formalities. The object and purpose of this Section is to ensure that procedural irregularity(ies) do not vitiate assessments. Notice/summons may be defective or there may be omissions but this would not make the notice/summon a nullity. Validity of a summon/notice has to be examined from the stand point whether in substance or in effect it is in conformity and in accordance with the intent and purpose of the Act. This is the purport of Section 292B. Notice/summons are issued for compliance and informing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is the view expressed by the Judicial Committee in Mohini Mohun Das v. Bungsi Buddan Saha Das [1889] ILR 17 (Cal) 580 and by the Madras High Court in Lodd Govindoss Krishnadas Varu v. P. M. A. R. M. Muthiah Chetty, AIR 1925 Mad 660. XXX XXX XXX 43. In Hind Samachar Limited v. Union of India (2011) 330 ITR 266 (P H) reference was made to Section 292B and Section 139(9) of the Act. In the said case, return of income, filed by the company was signed by someone other than the authorized person. It was observed that the question was of removal of defect, which could be rectified. Reference was made to another decision of the Punjab and Haryana High Court in CIT v. Norton Motors [2005] 275 ITR 595. 44. Bombay High Court in Prime Securities Ltd. v. Varinder Mehta, Assistant Commissioner of Income-tax (2009) 317 ITR 27 (Bom) has observed that Section 292B of the Act makes it clear that a return of income shall not be treated as invalid merely by reason of any mistake, defect or omission ,if the return of income is in substance and effect in conformity with or according to the intent and purpose of the Act. The return of income, if not signed by the authorized signatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CPC provides remedy when a suit is filed in the name of the wrong plaintiff and empowers the court to strike out any party improperly joined or to implead a necessary party at any stage of the proceedings. 47. One of the questions, which arises for consideration, in such cases is whether there was prejudice. The test to be applied is whether the party receiving the notice would be in doubt whether the said notice is meant for him or not. If the recipient of notice was not in doubt that it was meant for him, the misnomer or misdescription is not fatal. Thus failure to mention the words Principal Officer on the notices is not fatal. 16. In M/s Jagat Novel Exhibitors Pvt. Ltd. (supra), reference was made to Mahadev Govind Gharge v. Special Land Acquisition Officer, Upper Krishna Project, Jamkhandi, Karnataka, (2011) 6 SCC 321, Sardar Amarjit Singh Kalra v. Pramod Gupta, (2003) 3 SCC 212 and State of Punjab v. Shamlal Murari, (1976) 1 SCC 719. Several decisions including Commissioner of Income Tax, Andhra Pradesh v. K. Adinarayana Murty, (1967) 65 ITR 607 (SC) and Commissioner of Income Tax, Gujarat II v. Kurban Hussain Ibrahimji Mithiborwala, (1971) 82 ITR 821 (SC) ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the decision in Sri Nath Suresh Chand Ram Naresh (supra) and would observe that facts were peculiar. There was oral partition of the Hindu undivided family, M/s Munna Lal Moti Lal, on death of the Karta , Moti Lal. Capital was divided amongst three brothers, who were the coparceners. Controversy was regarding legality of oral partition that was not recognized by the Revenue. Re-assessment notices were issued, in the name of M/s Sri Nath Suresh Chand Ram Naresh, Karta Shri Nath. Nil return was filed along with letter stating that no business was conducted in the name of the assessee and notices were wrongly issued. Revenue had asserted that this notice was meant to assess M/s Munna Lal Moti Lal though the notice was to another assessee, who was also existing in law. Recording this factual matrix, the notice under Section 148 and assessments made were held to be invalid. 20. Commissioner of Income Tax v. Dimension Apparels Private Limited, (2015) 370 ITR 288 (Del) and Commissioner of Income Tax v. Intel Technology India (P.) Ltd., (2016) 380 ITR 272 (Kar) follow the ratio and decision in the case of Spice Infotainment Ltd. (supra), as assessment orders had been passed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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