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TMI Blog2016 (11) TMI 1620X X X X Extracts X X X X X X X X Extracts X X X X ..... per Notice issued u/s. 143(2) served on the assessee - AO claimed to have issued notice u/s. 143(2) for fixing the date of hearing on 23-11-09 and argued that such notice was served on a person by name Sh. M. Sankar who is neither authorized nor concerned person to receive on behalf of assessee - HELD THAT:- AO recorded the issuance of notice u/s. 142(1) on 19-7-2010 for fixing the hearing on 02-08-2010 and thereafter, according to assessment order, probably, after 26-08-2010 another notice for initiation of penalty proceedings u/s. 271(1)(b)of the Act was issued. A person claiming to be representing the assessee as partner appeared before the AO for the first time on 10-12-2010 in response to notice issued u/s. 271(1)(b) of the Act and it concluded that the service of notice u/sec 143(2) on 30-09-09 and issuance of notice thereafter u/sec 142(1) of the Act was not in the knowledge of the assessee and as rightly contended by the Ld.AR notice u/sec 143(2) of the Act was not properly served on the assessee. We also find that there is a gap of one year between issuance of notice u/s. 143(2) and appearance of partner representing Assessee before the AO. Therefore, the order sheets o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court 25,00,000/- It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, tax effect means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as disputed issues ). However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the materials available on record, we could not see whether the impugned case falls under any of the exceptions contemplated in the said Circular. We also find that the Circular makes it very clear that the revised monetary limits shall apply retrospectively to pending appeals also. We find that the Circular is binding on the tax authorities. This position has been confirmed by the Hon ble Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd reported in 267 ITR 272 (SC) wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circulars and laid down that when a Circular issued by the Board remains in operation then the revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. Hence we hold that the appeal(s) of the revenue deserve to be dismissed in terms of low tax effect vide Circular No.21 / 2015 dated 10.12.2015. Accordingly, this being a low tax effect case, we dismiss the appeal of the revenue in limine, as unadmitted, without going into the merits of the case. The appeal of the revenue is dismissed. 6. This appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued u/s. 143(2) of the Act was not properly served on the assessee. The CIT-A observed that the assessee has raised this ground for the first time before him and could not produce any evidence to show that the service of said notice was not properly served on the assessee and held that the assessee is not entitled to raise any objection on the ground of improper/belated service of notice. Relevant portion of which is reproduced herein below:- 10. Ground No. 8 states that notice under section 143(2) was not served to the partner or authorized person within the specified date as provided in law. When the matter came up for hearing, it was stated that the notice under section 143(2) was served on 30.9.2009 purportedly upon some staff person. It was stated that, service was not to any authorized person. 10.1. As can be seen from the assessment order, the partner / authorized representative of appellant appeared on some of the dates before the assessing officer and partial compliance to the notices issued under section 142(1) and 143(2) was made. Therefore, it is clear that notice under section 143(2) was, at some point of time, received by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was served on a person by name Sh. M. Sankar who is neither authorized nor concerned person to receive on behalf of assesse and also referred to the copies of pay register and debit voucher of salary details for the FY s 2007-09 as provided in paper books, wherein he drew our attention that no such person by that name was ever worked or employed with the assessee and the said notice was not properly served on assessee as contemplated and required u/s. 143(2) of the Act and urged to quash the assessment order and as confirmed by the CIT-A. The Ld. AR further relied on the decision of the Hon ble Gujarat High Court in the case of DCIT v Mahi Valley Hotels and Resorts [2006] 287 ITR 360 (Guj). 13. The Ld.DR submits that the assessee participated in the assessment proceedings and did not raise such ground questioning the validity of notice issued u/s. 143(2) before the AO. The assessee raised such ground before the CIT-A for the first time. He further submits that with regard to filing of additional evidence as filed before us for the first time and these documents were not before the AO and the CIT-A. Therefore, he argued that the issue on hand may be sent to the fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s. 271(1)(b) of the Act and it concluded that the service of notice u/sec 143(2) on 30-09-09 and issuance of notice thereafter u/sec 142(1) of the Act was not in the knowledge of the assessee and as rightly contended by the Ld.AR notice u/sec 143(2) of the Act was not properly served on the assessee. We also find that there is a gap of one year between issuance of notice u/s. 143(2) and appearance of partner representing Assessee before the AO. Therefore, the order sheets of assessment record as filed by the assessee by way of paper book suggests that the assessee was not appeared before the AO in response to notice issued u/s. 143(2) of the Act as it was not in the knowledge of Assessee. Therefore, we hold that the statutory notice issued u/s. 143(2) of the Act was not properly served on the assessee, which is mandatory as per section 143(2) of the Act. 15. With regard to the decision as relied on by the ld.AR of the assessee before us in the case of DCIT v Mahi Valley Hotels and Resorts supra, we find the facts and circumstances of the case is different from the present case. In that case the contention of the Revenue was that the plea of notice u/sec 143(2) was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anner in which something is to be done are expressed in negative language, that is to say, if the statute enacts that it shall be done in such a manner and in no other manner, such requirements are, in all cases absolute and neglect to attend to such requirement will invalidate the whole proceeding. The departmental authorities are bound by the circulars issued by the Central Board of Direct Taxes. Circular No. 5491 dated October 31, 1989, and Circular No. 6212 dated December 19, 1991, are explanatory. They give contemporaneous exposition of the legal position. Even otherwise, on a plain reading of the section and the proviso it is more than abundantly clear that the proviso prescribes a mandatory period of limitation in the light of the scheme of assessment wherein the majority of returns are required to be accepted without scrutiny and only certain returns are taken up for scrutiny. Hence when an assessment is framed under section 143(3) of the Act by issuing statutory notice beyond the prescribed time limit, the assessment would be bad in law and has to be quashed. 16. In the present case the contention of the assessee was that the notice was not properly served on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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