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TMI Blog2019 (10) TMI 1588X X X X Extracts X X X X X X X X Extracts X X X X ..... 1D and 271E when the assessment itself is invalid - HELD THAT:- The answer stands in favor of the assessee as there was no proceeding under the Act. The question of the penalty does not arise in the proceedings of the assessment which has been held invalid in the present case. In this regard we draw the support and the guidance from the judgment of Standard Brands Limited [ 2006 (7) TMI 126 - DELHI HIGH COURT ] We hold that as the assessment itself has been held as invalid and therefore the penalty arising in such assessment are not sustainable. Accordingly, we are of the view the appeals filed by the Revenue are not maintainable. - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Revenue : Shri L.P Jain, Sr. D.R. For the Assessee : Shri Deepak R. Shah, A.R. ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The three appeals are filed by the Revenue and the CO is filed by the Assessee against the separate orders of the Learned Commissioner of Income Tax (Appeals)-2 Ahmedabad, [Ld. CIT (A) in short] dated 13/09/2016, 02/05/2017 22/08/2016 arising in the matter of assessment order passed under s. 143(3) r.w.s 147 of the Income Tax Act, 1961 (here-in-af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the appeal filed by the Revenue. In view of the above, the assessee submitted that there was a bona-fide mistake committed by it in filing the CO beyond the due date. Accordingly it prayed to condone the delay in filing the CO. 3. On the other hand, the learned DR, considering the reason for the delay in filing the CO, left the issue at the discretion of the bench. 4. We have heard the rival contentions of both the parties and considered the reasons in the application filed by the assessee for condoning the delay of 785 days in filing the CO. Now the controversy arises for our adjudication whether such inordinate delay in filing the CO by the assessee in the given facts and circumstances is reasonable and sufficient cause for condoning the delay. 4.1 In this regard we note that the Hon ble Madras High Court in the case of Sreenivas Charitable Trust v. Dy. CIT reported in 280 ITR 357 has held that : 3. The Supreme Court in Vedabai v. Shantaram Baburao Patil [2002] 253 ITR 798 held as under : In exercising discretion under section 5 of the Limitation Act the Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expression sufficient cause should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 4.2 We also note that the case on merit appears to be in favour of the assessee. But there is a technical defect in the CO since the same was not filed within the period of limitation. There was the affidavit filed by the assessee explaining the reasons for the delay in filing the CO before us. However, the Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. 4.3 It is also important to note that Hon ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down certain principles for considering the condonation petition for filing the appeal which are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment framed under section 143(3) read with section 147 of the Act though the statutory notice under section 143(2) of the Act was not issued by the AO. 7. The assessee before the ld. CIT-A submitted that the AO has never issued notice u/s 143(2) during the re-assessment proceeding which is prerequisite to frame an assessment order. Accordingly assessee prayed that the impugned assessment order should be cancelled. The assessee in this regard placed his reliance on Hon ble SC judgment in case of ACIT vs. Hotel Blue Moon 229 CTR 219 and various other judgments. 8. However, the ld. CIT (A) on the submission filed by the assessee called for the remand report from AO who submitted that during the assessment proceeding assessee did not take any stand in this regard. Therefore in light of provision of section 292-BB of the Act, the assessee claim is not tenable. The AO, further placed his reliance on Hon ble Delhi HC judgment in case of MTNL vs. Chairman CBDT 246 ITR 173, Madras HC decision in case of Arvea T D India ltd. vs. ACIT 294 ITR 233. 8.1 The ld CIT-A after considering the submission of assessee and remand report, rejected the contention of the assessee and confirmed the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which finds reference in the decision of this Court in case of Mahi Valley Hotels Resorts (supra), which has been reproduced in paragraph 8.5 hereinabove. A perusal of the above circular indicates that if an assessee, after furnishing the return of income, does not receive a notice under section 143(2) of the Act from the Department within the prescribed period, then he can take it that the return filed by him has become final and no scrutiny proceedings could be started in respect of that return. This is the kind of significance that has been attached to a notice under section 143(2) of the Act by the Central Board of Direct Taxes itself. 22. Section 292BB of the Act provides for a deeming provision that any notice under any provision of the Act, which is required to be served upon the assessee, has been duly served upon him in time, in accordance with the provisions of the Act. In the opinion of this Court, this section would be applicable where a notice has, in fact, been issued and a contention is raised that such notice has not been served upon the assessee or has not been served in time or has not been served properly, namely, where there is a defect in the service of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service of notice under section 143(2). It does not in any way insulate the Assessing Officer from default in issuing notice under section 143(2) within the period of limitation contemplated therein. When the records show that there was no issue of notice under section 143(2) within the period of limitation prescribed under the said proviso, the revenue cannot take advantage of the provisions of section 292BB. In other words, 'issue of notice' and 'service of notice' are two different aspects and what is covered by section 292BB is only 'service of notice'. Non-issue of notice under section 143(2) within the period of limitation would not be covered under the ambit of section 292BB. The decision of the Tribunal in the case of Amithi Software Technologies (P.) Ltd. v. ITO [IT Appeal No. 540 (Bang.) of 2012, dated 7-2-2014] clearly supports the plea of the assessee in this regard. Therefore, assessment proceedings are invalid for the reason that notice under section 143(2) had not been issued and served within the time limit prescribed by those provisions. Accordingly, the order of assessment is annulled 12. The learned DR, appeared on behalf of the revenu ..... 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