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TMI Blog2021 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... g issuance of a lawful notice under section 143(2). We are, therefore, of the view that the issues raised by the learned Departmental Representative lack legally sustainable merits. We reject the plea of the revenue. Admission of additional ground of appeal before the learned CIT(A) - The issue raised was an important question of law and merely because a reference to some facts was required, admission of this ground by the CIT(A) could not have been declined. The proceedings before the CIT(A) are a mere continuation of the assessment proceedings and there is no bar is raising any issue, requiring further examination of facts, before the CIT(A). We, therefore find no substance in this plea of the learned Departmental Representative either. As regards participation in the reassessment proceedings by the assessee, nothing really turns on the same. When assumption of jurisdiction is illegal, as no valid notice under section 143(2) was issued and served on the assessee, mere participation by the assessee in the resultant proceedings cannot clothe it with legality. CIT(A) rightly notes in his impugned order, issuance and service of notice under section 143(2) is a foundational requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2012?" (4) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in annulling the order passed u/s. 143(3) r.w.s. 147 of the I. T. Act for the want of issuance of notice u/s 143(2) of the I. T, Act without appreciating that the appellant does not object to the non-service of notice u/s. 143(2) before the completion of the reassessment proceedings?" (5) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in annulling the order passed u/s. 143(3) r.w.s. 147 of the I. T. Act for the want of issuance of notice u/s143(2) of the I.T Act without appreciating that the provisions of section 292BB precludes the assessee for raising objection about the non-service of notice u/s. 143(2) after the completion of the reassessment proceedings?" 3. As all the above grievances revolve around the validity of reassessment proceedings, in the absence of evidence of service of notice under section 143(2), we will take up all these grievances together. 4. Briefly stated, the relevant material facts are as follows. The assessee before us is a cooperative society registered under the Tamilnadu Societies Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial pronouncements. 6.3.2 The DCIT, Central- 6(2), Mumbai, the Ld. AO, vide her above letter dated 28.12.2016 has submitted as under. "On perusal of the case records for the reassessment proceedings u/s 148 for A.Y. 2007-08 it is found that after the issuance of the notice u/s 148, no notice u/s 143(2) for the commencement of the reassessment is available on record. However, it is pertinent to mention here that the assesses in this case has fully participated in the reassessment proceedings and has provided submission as called for and has in no way objected to the reopening u/s 148 being bad in law on account of non receipt of notice u/s 143(2) vide its objection filed dated 17.10.2012. Further as per the provisions u/s 292BB of the Income tax act 1961 reproduced below: NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES "Where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 r.w.s. 143(3) of the Act is valid in the background of provisions of section 292BB of the Act. The provisions of section 292BB read as under: "[Notice deemed to be valid in certain circumstances. 292BB. Where on assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.]" 8. From the bare perusal of the above section, we see that a deeming fiction has been created by this section. In case, an assessee cooperates during the assessment even if no notice has been served on him, it is deemed to be served upon him in time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 147 of the Act. The notice under section 148 of the Act requires the assessee to furnish his return of income, within the time specified in the notice. This return has to be in the prescribed form and in the prescribed manner. If has been very categorically provided in the section that afterwards the provisions of this Act shall so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 of the Act. Therefore, the provisions of section itself negate the arguments taken by the learned D.R. that once issuing notice under section 148 of the Act, the Assessing Officer cannot go into the provisions of other sections. Once the assessee files return in pursuance of notice under section 148 of the Act which is deemed to be filed under section 139 of the Act and in case the Assessing Officer wants to proceed with the| return filed by the assessee, he has to issue a notice under section 143(2) of the Act. Any assessment framed without issue of notice under section 143(2) of the Act suffers from Jurisdictional error. This position of law has also clarified by Delhi High Court in the case of Alpine Electronics Asia Pfe Ltd. (supra). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01.04.2008, in which it is stated that in a case where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of the said Act which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of the said Act. Perusal of the order of the ITAT reveals that this aspect was not canvassed before the ITAT. 5. Apart from that, it is an admitted position that no notice under Section 143(2) had been issued while making assessment under Section 143(3) read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reassess under section 147 of the Income-tax Act and completed the assessment without issuing notice under section 143(2] within the time stipulated. The order was confirmed in appeal. The Tribunal had set aside the order on the ground that notice under sect/on 143(2] was not served on the assesse within the stipulated period. The learned Bench of the Madras High Court held that as the notice under section 143(2) was not served within the stipulated period, the procedure under section 143 came to an end and the matter attained finality. Similarly is the judgment of the Gauhati High Court in Smt. Bandana Gogol v. CIT [2007] 289 ITR 28 which also dealt with an issue of reassessment under section 147. That was a case of block assessment. If was found that notice under section 143(2) was not issued. The learned Bench came to the conclusion that requirement of section 143(2) cannot be dispensed with as it is mandatory. Parliament subsequently by the Finance Act, 2006, with effect from 1-10-1991, introduced the second proviso to section 148 saving proceedings where return had been filed pursuant to proceedings under section 147 and no notice had been served under section 143(2) within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 148 of the Act and hence non issuance of such mandatory notice u/s 143(2) of the Act is fatal and the Ld. AO will not have any jurisdiction to complete the reassessment u/s 143(3) rws 147 of the Act. It is further held by various courts/Tribunals that the defect of not issuing notice u/s 143(2) of the Act cannot be cured u/s 292BB of the Act. Since the Ld. AO has submitted that "after the issuance of notice u/s 148, no notice u/s 143(2) for the commencement of the reassessment is available on record", so in view of the factual report of the Ld. AO and respectfully following the decisions of Hon'ble Courts/Tribunals, referred above, I am of the considered opinion that impugned assessment order u/s 143(3) rws 147 of the Act dated 02.01.2013 is without jurisdiction and bad in law and hence the same is herewith annulled. Since the impugned assessment has been annulled, the various grounds raised in appeal have become academic and hence not adjudicated. As the impugned reassessment order has been annulled, so the appeal filed by the appellant is ALLOWED. 5. The Assessing Officer is aggrieved of the relief so granted by the CIT(A) and is in appeal before us. 6. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questionnaire, which is rectified as a 'letter' by striking off the word questionnaire, on 28th August 2012. As for the learned Departmental Representative's contention that the notice under section 143(2), as stated in the questionnaire in question- a copy of which was placed before us, accompanied the said questionnaire, that is a claim contested by the assessee. There is no evidence to the service of the notice purportedly attached to the said questionnaire. In any event, it is not clear whether this notice was the one issued on 29th March 2012 or it was some other notices. If this notice was the one issued on 29th March 2012, it had no legal sanctity because there was not even an income tax return before the Assessing Officer on that date. If it was some other notice, there is no mention of the same on the proceedings sheet, a copy of which is served by the learned Departmental Representative itself, but then where is the question of reissuance of the same notice if the proceeding sheet evidences issuance of notice, though not served, on 29th March 2012. Whichever way one looks at it, as evident from the proceedings recorded by the Assessing Officer, there was not even a valid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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