9911796707
TMI Blog2020 (2) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... revise any ground taken at the time of hearing. For these and other grounds that may be taken and urged at the time of hearing, the Hon'ble Income Tax Appellate Tribunal (ITAT) may be pleased to allow the appeal and cancel the impugned orders in the interest of equity and justice." 3. The assessee has also filed an additional ground, which reads as follow:- Regarding Notice u/s 143(2). 1.1. The impugned assessment order u/s 143(3), dated, 30-03-2015 is passed without the issue/ service of the mandatory Notice u/s 143(2) of the Act on the basis of the revised return of income filed on 1703-2014. It is submitted that the issue/service of Notice u/s 143(2) is fundamental and mandatory requirement of law for a valid assessment order and therefore, it is a legal ground going to the root of the matter. 1.2. It is settled law that legal grounds are allowed to be taken before the Hon'ble Tribunal. The Hon'ble Supreme Court reiterated this settled legal position in the case of the C1T vs Singhad Technical Education Society, Civil Appeal No. 11080 of 2017, where the legal ground on recording of satisfaction u/s 153C was taken for the first time before the Hon'ble Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter in appeal before the first appellate authority. The CIT(A) upheld the view taken by the Assessing Officer, by observing as under:- "5. I have considered the above grounds of appeals, statement of facts and written submission made by the appellant and also perused the assessment order passed by the Assessing Officer. The appellant has raised a solitary ground which is on the disallowance of Rs. 3,75,01,344/- made towards the expenditure incurred in relation to dividend income in accordance with Rule 8D of the IT Rules, 1962 without making distinction between the meaning of 'Trade Investment and Non-Trade Investments' on obstruct basis stating that the investment made in the group companies is a business strategy and not with an intention to earn dividend. The appellant submitted that it is a Listed Public Limited Company engaged in the business of manufacturing of electronic medical equipments/ devices, as a business strategy, has made TRADE (BUSINESS) INVESTMENTS in 100% subsidiaries in India and in various countries to an extent of Rs. 381,66,46,423/-. Further submitted that investments made in the group companies is a 'Business Strategy' and not with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it may fetch some exempted income/dividends and provisions of Section 14A should not be telescoped/ applied from the point of view of Non Trade Investments. Further, in the case of Interglobe Enterprises Ltd. v. Deputy Commissioner of Incometax (Del-Trib) it is held that investment in subsidiary and for acquiring controlling interest / strategic investment no disallowance of interest is required to be made under rule 8D(i) & 8D(ii) as no direct or indirect interest expenditure has incurred for making investments. Strategic investment has to be excluded for the purpose of arriving at disallowance under Rule 80 (iii). Since, the appellant had utilized interest free funds for making fresh investments and that too into its subsidiaries which were not for the purpose of earning exempt income but for strategic purposes only. Even in the case of Garware Wall Ropes Ltd. v. ACIT(Mum.)(Trib.) the same view was taken. However, the appellant could not prove that the investments made are strategic in nature and therefore the grounds of appeal are not allowed." 5. Aggrieved by the orders of the Income Tax Authorities, the assessee is in appeal before us. 6. Since the additional ground rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue Moon 321 ITR 362, which has laid down the law that unless the Notice u/s 143(2) is issued and served on the basis of the return filed u/s 158BC, the assessment would not be a valid one. The Hon'ble Jurisdictional Tribunal in the case of G.N. Mohan Raju (2015) 57 taxmann.com 415 (Bang-Trib) had an occasion to consider the assessment order passed u/s 147 without issuing the mandatory Notice u/s 143(2) of the Act, where the return of income was filed in compliance of the Notice u/s 148. The Hon'ble Tribunal was pleased to hold that the issue of Notice u/s 143(2) is mandatory and the Notice issued prior to filing of the return u/s 148 on the basis of the return income filed u/s 139 would not meet the requirement of law. The Tribunal held: "This bring us to the crux of the issue i.e., whether notices under s.143(2) mandatory in a reopened procedure and whether notices sued prior to the reopening would satisfy the require" specified under s. 143(2) of the Act. That issue of Notice under s.143(2) of the Act, is mandatory even in a reassessment proceedings initiated under s. 148 of the Act has been clearly laid down by the Hon'ble Delhi High court in the case of Alpine Electro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Evidence only applies to a case where the Notice u/s 143(2) is 'ISSUED', but not to a case where the Notice itself is not issued. In view of the above, the learned AR pleaded that the impugned assessment order completed u/s 143(3) without the issue/service of the mandatory Notice u/s 143(2) is void and is liable to be vacated. 9.3 The learned AR further submitted that as regards notice u/s 143(2) and section 292BB of the Act, that the Hon'ble Apex Court recently reiterated the settled law in the case of CIT vs. Laxman Das Khandelwal - Civil Appeal Nos. 6261 - 6262 of 2019, dated, 13-08-2019, that issue and service of a valid Notice u/s 143(2) is a pre-requisite for a valid assessment. The Hon'ble Court considered the impact of section 292BB and held that in order that the section applies, the Notice ought to be issued, and the section cures only the infirmities in the Notice. Section 292BB cannot be pressed into service if there is "no issue" of the Notice itself. It may not be out of context to refer to the decision of the Hon'ble Co-ordinate Bench in the case of G.N. Mohan Raju (2015) 57 taxmann.com 415. In that case, the assessing officer issued the Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
