The Income-tax Officer,, Jammu v. Smt. Promila Gupta, Jammu

ITA 184/ASR/2013 | 2006-2007
Pronouncement Date: 16-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 18420914 RSA 2013
Assessee PAN MJUNE2000T
Bench Amritsar
Appeal Number ITA 184/ASR/2013
Duration Of Justice 3 month(s) 13 day(s)
Appellant The Income-tax Officer,, Jammu
Respondent Smt. Promila Gupta, Jammu
Appeal Type Income Tax Appeal
Pronouncement Date 16-07-2013
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 16-07-2013
Date Of Final Hearing 12-06-2013
Next Hearing Date 12-06-2013
Assessment Year 2006-2007
Appeal Filed On 03-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU JUDICIAL MEMBER AND SH. B.P.JAIN ACCOUNTANT MEMBER I.T.A. NO.184(ASR)/2013 ASSESSMENT YEAR:2006-07 PAN : INCOME TAX OFFICER VS. SMT. PROMILA GUPTA UDHAMPUR. W/O LATE SH. SUDESH GUPTA PROP. M/S. HOTEL MOTI MAHAL TRINGLA BATOTE RAMBAN ( J & K) (APPELLANT) (RESPONDENT) APPELLANT BY:SH.R.L.CHHANALIA DR RESPONDENT BY:SH.JOGINDER SINGH CA DATE OF HEARING: 12/06/2013 DATE OF PRONOUNCEMENT:16/07/2013 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A) JAMMU DATED 14.01.2013 FOR THE ASSESSMENT YEAR 200 6-07. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN QUASHING THE ASSESSMENT WHEN THE ASSESSE E DURING ASSESSMENT PROCEEDINGS HAS NEVER RAISED ANY OBJEC TION REGARDING ISSUANCE OF NOTICE U/S 143(2) OF THE IN COME TAX ACT 1961 AS PER THE PROVISIONS OF SECTION 292B OF TH E INCOME TAX ACT 1961. 2 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN QUASHING THE ASSESSMENT WHEN THE HONBLE I TAT AGRA BENCH IN THE CASE OF CHANDRA BHAN BANSAL VS. DCIT 7 9 ITD 659 HAS HELD THAT THE LAW MAKERS HAVE MADE IT ABUN DANTLY CLEAR THAT THE LIMITATION PERIOD IMPOSED IN PROVISION TO SECTION 143(2) WAS NOT APPLICABLE TO THE RETURNS FILED IN R ESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT 1961. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT( A) WAS RIGHT IN QUASHING THE ASSESSMENT WHEN NO SUCH OPPO RTUNITY HAS BEEN GIVEN TO THE ASSESSING OFFICER DURING APPELLA TE PROCEEDINGS TO GIVE HIS VIEWS IN THIS MATTER. 4. THE APPLICANT CRAVES TO AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 2. THE BRIEF FACTS IN THE APPEAL OF THE REVENUE ARE THAT EARLIER THE CASE OF HOTEL MOTI MAHAL WAS DECIDED BY THE A.O. UNDER S ECTION 144/147 OF THE INCOME TAX ACT 1961 VIDE ORDER DATED 10.12.2009. T HE ASSESSMENT WAS MADE IN THE STATUS OF FIRM. THE MAIN REASON FOR MAK ING THE EX PARTE ASSESSMENT WAS THAT STATUTORY NOTICES ISSUED FROM T IME TO TIME WERE NOT COMPLIED BY THE ASSESSEE AT ALL. AFTER THE RECEIPT OF ASSESSMENT ORDER HOTEL MOTI MAHAL DID NOT FILE ANY APPEAL BEFORE THE LEARN ED CIT(A). IT HAS HOWEVER FILED A PETITION U/S 264 OF THE INCOME TAX ACT 1961 BEFORE THE COMMISSIONER OF INCOME TAX J&K JAMMU CHALLENGING THE ASSESSMENT ORDER PASSED BY THE UNDERSIGNED. THE WORTHY COMMISS IONER OF INCOME TAX VIDE HIS OFFICE F.NO. CIT/JMU/ITO(T)/264-12/R-11/10 -11/9804 DATED 29.10.2010 HAS CANCELLED THE ORDER PASSED BY THE A. O. WITH THE DIRECTIONS TO 3 MAKE FRESH ASSESSMENT AS PER LAW. THE MAIN REASONS FOR CANCELLING THE ASSESSMENT ORDER PASSED U/S 144/147 WERE AS STRONG LY CONTENDED BY ASSESSEES COUNSEL THAT PROPER REASONS FOR ISSUING NOTICE U/S 148 WERE NOT RECORDED AND THE ASSESSMENT WAS WRONGLY MADE IN THE STATUS OF FIRM. THE COUNSEL OF HOTEL MOTI MAHAL HAS STRONGLY CONTENDE D THAT THE ASSESSEE WAS THE SOLE LEGAL HEIR OF LATE SH. SUDESH GUPTA HER H USBAND WHO DIED ON 08- 08-2005 AND WHO WAS THE OWNER OF HOTEL MOTI MAHAL. HENCE THE PRESENT ASSESSMENT PROCEEDINGS HAVE BEEN TAKEN ON THE ASSES SEE. ACCORDINGLY A NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE ON 17-03-2011 REQUIRING HER TO FILE YOUR RETURN OF INCOME UPTO 15.04.2011. THE ASSESSEE HAS HOWEVER NOT FILED THE RETURN BY THE SAID DATE. IT HAS HOWEV ER BEEN FILED ON 18.11.2011 WHICH WAS TREATED AS NONEST. THE NOTICE U/S 148 WAS ISSUED ONLY AFTER RECORDING PROPER REASONS. THE NOTICE WAS DULY SERVE D UPON THE ASSESSEE THROUGH SPEED POST VIDE POST OFFICE RECEIPT NO. EE8 37169050 IN DATED 17.03.2011. THE REASONS FOR ISSUING THE NOTICE ARE REPRODUCED AS UNDER: REASONS FOR ISSUING NOTICE U/S 148 OF THE INCOME-T AX ACT 1961 IN THE CASE OF SMT. PROMILA GUPTA LEGAL HEIR OF LATE SHRI SUDESH GUPTA ALIAS FAJU SHAH PROP. M/S HOTEL M OTI MAHAL TRINGLA BATOTE FOR THE ASSESSMENT YEAR 2006 -07 - REGARDING- __________________________________________________ ______ 4 1. THE ASSESSEE SHRI SUDESH GUPTA PROP. M/S HOTEL MOTI MAHAL TRINGLA BATOTE (JAMMU & KASHMIR) HAD CONSTR UCTED A HOTEL AT BATOTE BUT HAD NOT DISCLOSED ANY DETAILS OF THE INVESTMENT MADE IN THE CONSTRUCTION OF THE HOTEL BU ILDING. A TAX EVASION PETITION WAS RECEIVED IN THIS OFFICE ON 07.04.2008 WHEREIN IT WAS MENTIONED THAT:- THAT THE ASSESSEE HAD CONSTRUCTED HOTEL AT COST OF RS. 1.50 CRORES AND HAD ALSO TAKEN LOAN OF RS. 9 LAKHS FROM SBI BANK BATOTE. THAT THE ASSESSEE ALSO OWNED THREE STOREY HOUSE BUI LDING WHICH WAS ALSO RENTED FOR RS. 20 000/- PER MONTH. THAT THE ASSESSEE SOLD LAND LOCATED AT JAMMU NARWAL MAIN BAZAR FOR RS. 40 000/- BUT NO INCOME TAX HAS B EEN PAID BY THE ASSESSEE. 2. IN ORDER TO VERIFY THE CONTENTS OF THE COMPLAINT I NSPECTOR OF THIS OFFICE WAS DEPUTED AND A COPY OF HIS REPORT DA TED 15.07.2009 IS PLACED ON RECORDS. IT WAS FOUND THAT THE ASSESSEE HAD CONSTRUCTED A HOTEL BUILDING AT BATOTE . THE RECORDS OF ASSESSEE ALSO SHOWED THAT NO RETURNS OF INCOME ARE BEING FILED SINCE BEGINNING AND HENCE THE INVES TMENT IN HOTEL REMAINS UNACCOUNTED. 3. THE MATTER WAS ACCORDINGLY REOPENED U/S 148 OF THE I.T. ACT 1961 BY RECORDING REASONS AS PER ORDER SHEET ENTRY DATED 19.09.2008. THE ASSESSMENT WAS COMPLETED EX PARTE U /S 144 AS THE ASSESSEE FAILED TO FILE ANY INFORMATION AND CO-OPERATE WITH THE VALUATION OF HOTEL BUILDING ALSO. THE INC OME WAS DETERMINED AT RS. 68 87 285/- AS THE ENTIRE INVESTM ENT OF RS. 83 28 100/- REDUCED BY LOAN OF RS. 14 40 815/- WAS TAKEN FOR ADDITION (RS. 68 87 285/-) IN THE ASSESSMENT YEAR 2 006-07. HOWEVER THE ASSESSEE CONTENDED BEFORE THE CIT JAM MU U/S 264 OF THE I.T. ACT 1961 THAT THE SAME WAS BAD IN LAW AS STATUS OF THE ASSESSEE WAS MENTIONED AS FIRM WHEREA S THE STATUS WAS INDIVIDUAL. THE CIT JAMMU VIDE HIS ORDER NO. CIT/JMU/ITO(T)/264-12/R-11/201-11/9807 DATED 5 29.10.2010 CANCELLED THE ASSESSMENT U/S 144 MADE VI DE ASSESSMENT ORDER DATED 10.12.2009. 4. THE MATTER HAS BEEN THOROUGHLY GONE INTO BY ME AND FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CONSTRUCTED THE HOTEL WHICH WAS VALUED AT RS. 83 28 100/- AS PER VALUATIO N REPORT DATED 18.11.2009. THE ASSESSEE HAS NOT FURNISHED AN Y INFORMATION WITH REGARD TO THE VALUE OF UNACCOUNTED INVESTMENT IN THE SAID HOTEL BUILDING FOR THE FINAN CIAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 2006-07. AS PER REPORT OF THE VALUATION OFFICER THE CONSTRUCTION ST ARTED FROM JUNE 2000 AND CONTINUED UPTO JUNE 2005. CONSIDERIN G THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE FACT THAT THE ASSESSEE HAS NEVER FURNISHED ANY DETAILS AT ANY POINT OF TIME EITHER BEFORE THE ASSESSING OFFIC ER OR BEFORE THE VALUATION OFFICER. I HAVE REASON TO BELI EVE THAT INCOME PERTAINING TO ASSESSMENT YEAR 2006-07 AMOUNT ING TO RS. 68 87 285/- I.E. THE AMOUNT OF COST OF CONSTRUC TION AS REDUCED BY THE AMOUNT OF LOAN FROM SBI BANK AS DETERMINED BY THE VALUATION OFFICER HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 R.W.S. 148 OF THE INCOME TAX ACT 1961. 5. FURTHER THE ASSESSEE HAS ALSO BEEN RECEIVING RENT F ROM HOUSE PROPERTY @ RS. 2000/- PER MONTH AS PER THE RE PORT OF THE INSPECTOR BUT NO INFORMATION WAS FILED. I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS ALSO RECEIVED UNACCOU NTED RENT OF RS. 24 000/- DURING THE RELEVANT PERIOD. SIMILAR LY THE ASSESSEE HAD ALSO STARTED HOTEL BUSINESS DURING YEA R. ACCORDINGLY TO BE FAIR AND REASONABLE I ESTIMATE NET INCOME OF RS. 60 000/- AS THE HOTEL WAS NEWLY START ED. 6. I HAVE CAREFULLY EXAMINED THE RECORDS OF THE ASSESS EE SHRI SUDESH GUPTA ALIAS FAJU SHAH WHO DIED ON 08.08.2009 AND AFTER ABOVE FACTS AND MATERIAL ON RECORDS. I HAVE R EASON TO BELIEVE THAT INCOME TO THE TUNE OF RS. 69 71 285/- (RS. 68 87 285 + 24 000 + 60 000) HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT 1961. SINCE NO RETURN OF INCOME WAS EVER FILED BY THE ASS ESSEE THE ABOVE INCOME OF RS. 69 71 285/- HAS ESCAPED ASSESSM ENT DUE 6 TO FAULT ON THE PART OF THE ASSESSEE AS HE FAILED T O DISCLOSE TRUE PARTICULARS OF ABOVE INVESTMENT TO THE REVENUE . THEREFORE NOTICE U/S 148 IS ISSUED TO THE ASSESSEE TO ASSESS THE ABOVE INCOME AND ALSO ANY OTHER INCOME WHICH CO MES TO THE NOTICE OF THE UNDERSIGNED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THIS CASE. 7. I THEREFORE PROPOSE TO ACCESS YOUR INCOME FOR THE ASSESSMENT YEAR 2006-07 AT RS. 69 71 285/- (RS. 68 87 285/- + 24 000 + 60 000) 3. THE ASSESSEE HOWEVER DID NOT FILE ANY RETURN OF INCOME. THE DETAILED QUESTIONNAIRE DATED 22/07/2011 ALONGWITH A STATUTORY NOTICE U/S 142(1) OF THE ACT WAS ISSUED AND HEARING WAS FIXED FOR 08.08.2011. THE REASONS WERE RECORDED FOR ISSUING NOTICE UNDER SECT ION 148 AND WERE COMMUNICATED BY THE AO WHEN THE ASSESSEE WAS REQUE STED TO FURNISH INFORMATION/DETAILS AS AVAILABLE AT PAGE 4 OF AOS ORDER. NO ONE ATTENDED THE OFFICE NOR ANY APPLICATION FOR ADJOURNMENT WAS RECE IVED ON THAT DATE. A FRESH NOTICE UNDER SECTION 142(1) WAS ISSUED ON 12.08.201 1FOR HEARING ON 26.08.2011 AND NONE ATTENDED. AGAIN A NOTICE U/S 14 2(1) WAS ISSUED ON 12.03.2011 FIXING THE CASE FOR 6.10.2011 WHEN THE N OTICE WAS SERVED UPON THE SON OF THE ASSESSEE ON 22.09.2011. FURTHER NOTI CES AND LETTERS WERE ISSUED AND A WRITTEN REPLY DATED 02.12.2011 WAS FILED AS M ENTIONED IN PARA 6 & 7 OF AOS ORDER. THEREAFTER THE AO AFTER CONSIDERING T HE REPLY OF THE ASSESSEE 7 CONCLUDED VIDE PARA 8 TO 14 WHICH FOR THE SAKE OF C ONVENIENCE IS REPRODUCED AS UNDER: 1. ON RECEIPT OF THE ABOVE REPLY AND ITS ANNEXURE THE CASE WAS AGAIN REFERRED VIDE THIS OFFICE LETTER NO. 1400 DATED: 02 .12.2011 TO THE DEPARTMENTAL VALUATION OFFICERS. AAYAKAR BHAWAN AM RITSAR FOR FURTHER CONSIDERATION AT HIS END. THIS WAS QUITE NE CESSARY IN ORDER TO MAKE CORRECT AND FAIR ASSESSMENTS IN THIS CASE. THE VALUATION OFFICER VIDE HIS OFFICE LETTER NO: VO/IT/ASR/2009/CC-09/140 DATED 23.12.2011 HAS REPOR TED THAT THE ASSESSED COST ALREADY CONVEYED TO THIS OFFICE VIDE EARLIER VALUATION REPORT IS CORRECT AND THAT THE NAME OF THE ASSESSEE MAY BE CONSIDERED AS SMT. PROMILA GUPTA. AS PER THE VALUATION REPORT RECEIVED FROM THE VALU ATION OFFICER VIDE HIS OFFICE NO: VO/IT/ASR/200/CC -09/150 DATED 18.11.2009 THE VALUER HAS VALUED THE TOTAL COST OF CONSTRUCTION AT RS. 83 28 100/-. AS PER PARA 2.3 OF THE VALUATION REPORT THE ASSESSEE HAS NOT SUPPLIED ANY DETAILS TO THE VALUATION OFFICER FOR THE PURPOSE OF VALUING THE COST OF CONSTRUCTION IN THE HOTEL BUILDING. AS PER HIS FORW ARDING LETTER NO: VO/IT/ASR/200/CC-09/150 DATED 18.12.2009 THE VALUA TION OFFICER HAS STATED THAT THE ASSESSEE HAS ONLY VERB ALLY TOLD PERIOD OF CONSTRUCTION FROM JUNE 2000 TO JUNE 2005 AND ACCO RDINGLY VALUATION REPORT HAS BEEN PREPARED. NO OTHER DETAILS/ DOCUMEN TS HAVE BEEN SUPPLIED BY ASSESSEE. THUS KEEPING IN VIEW THE VA LUATION REPORT THE RELEVANT ASSESSMENT YEAR IN WHICH INVESTMENT IN THE HOTEL BUILDING IS TO BE CONSIDERED IS THE ASSESSMENT YEAR 2006-07. THIS IS ALSO FOR THE REASON THAT NO YEAR-WISE BREAK-UP OF THE INVESTMENT MADE HAS BEEN GIVEN IN THE VALUATION REPORT AND HENCE I AM LEFT W ITH NO ALTERNATIVE BUT TO CONSIDER THE SAME IN THE ASSESSMENT YEAR 200 6-07. WHILE MAKING THE ASSESSMENT OF THE HOTEL MOTI MAHAL IN THE STATUS OF THE FIRM INFORMATION WAS CALLED FOR FROM THE BRANCH MANAGER SBI BATOTE REGARDING DETAILS OF THE LOAN OBTAINED FOR CONSTRUCTION OF THE HOTEL ETC. THIS INFORMATION HAD BEEN RECEIVED FROM THE BANK VIDE ITS LETTER DATED 09.10.2009 AND IS PLACED ON THE ASSESSMENT RECORDS OF HOTEL MOTI MAHAL (AVAILABLE O N THE ASSTT ORDER 8 FOR A.Y. 06-07 IN THAT CASE). AS PER THIS INFORMATI ON THE BANK HAS RELEASED VARIOUS INSTALLMENTS OF THE LOANS ON DIFFE RENT DATES. THE AGGREGATED OF THE LOAN INSTALLMENTS FOR CONSTRUCTIO N OF THE HOTEL BUILDING COMES TO RS. 14 40 815/-. BESIDES A FURTH ER LOAN OF RS. 40 000/- FOR PURCHASE OF GENERATOR SET WAS RELEASED BY THE BANK. THUS THE UNEXPLAINED INVESTMENT OF RS. 68 87 285 ( COST OF CONSTRUCTION DETERMINED BY THE VO RS. 83 28 100 MINUS BANK LOANS OF 14 40 815) IS BEING TAXED IN THE ASSESSMENT YEAR 2006-07 AS WA S DONE WHILE MAKING THE ASSESSMENTS OF THE HOTEL MOTI MAHAL IN T HE STATUS OF FIRM. BEFORE DOING SO AN OPPORTUNITY OF BEING HEARD WAS AFFORDED TO THE ASSESSEE VIDE THIS OFFICE LETTER NO. 1446 DATED 19.12.2011. THE CONTENTS OF THE SAID LETTER READ VERBATIM AS UNDER: - PLEASE REFER TO THE ASSESSMENT PROCEEDINGS IN YOUR CASE FOR THE ABOVE SAID ASSESSMENT YEARS AND ALSO YOUR CONS OLIDATED WRITTEN REPLY RECEIVED IN THIS OFFICE ON 02.12.2011 FILED FOR ALL THE FOUR ASSESSMENT YEARS WHEREIN YOU HAVE GIVEN THE YE AR-WISE BREAK-UP OF THE AMOUNT SPENT ON THE CONSTRUCTION OF THE HOTEL MOTI MAHAL. THIS IS TO INTIMATE YOU THAT ON RECEIPT OF YOUR REP LY IT WAS IMMEDIATELY FORWARDED TO THE VALUATION OFFICER ALON G WITH ITS ENCLOSURES OF HIS RECONSIDERATION. HOWEVER TILL DAT E NOTHING HAS BEEN HEARD FROM HIM. SINCE THE CASES FOR ALL THE YE ARS ARE GETTING BARRED BY LIMITATION 30.12.2001 THESE CANNOT BE KE PT PENDING ANY LONGER. I THEREFORE PROPOSE TO MAKE THE ASSES SMENTS FOR ALL THE YEARS KEEPING IN VIEW THE VALUATION ALREADY MAD E BY THE VALUATION OFFICER WHICH WAS FORWARDED TO THE UNDERS IGNED VIDE HIS OFFICE NO: VO/IT/ASR/200/CC-09/150 DATED 18.11. 2009 DATED 1811.2009 AND ALSO PROPOSE TO ASSESSEE THE ENTIRE U NEXPLAINED INVESTMENT OF RS. 68 87 285 (COST OF CONSTRUCTION D ETERMINED BY THE VO RS. 83 28 100 MINUS BANK LOANS OF RS. 14 40 815/-). THIS IS TO FURTHER INTIMATE YOU THAT YOUR CASE NOW STANDS FIXED FOR HEARING ON 26.12.2011 AT 4.00 P.M. IN MY OFFICE AT DHAR ROAD UDHAMPUR AND YOU ARE REQUESTED TO PLEASE GIVE YOUR OBJECTIONS IF ANY TO THE PROPOSED ACTION. IF YOU F AIL TO ATTEND THE OFFICE I WILL BE LEFT WITH NO ALTERNATIVE BUT TO C OMPLETE THE BEST 9 JUDGMENT ASSESSMENT AS ENVISAGED U/S 144 OF THE INC OME TAX ACT 1961 AND THE ENTIRE AMOUNT OF UNEXPLAINED INVE STMENT WILL BE ASSESSED IN THE ASSESSMENT YEAR 2006-07. ON 26.12.2011 NONE ATTENDED AS USUAL. IN THE FACT S AND CIRCUMSTANCES OF THE CASE I AM LEFT WITH NO ALTERN ATIVE BUT TO COMPLETE BEST JUDGMENT ASSESSMENT U/S 144 ON THE BA SIS OF MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE TOTAL INCOME OF THE ASSESSEE FOR THE CURRENT ASSESSMENT YEAR IS COMPUTED AS UNDER:- INCOME AS PER RETURN OF INCOME : RS. 50 000/- ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT AS DISCUSSED ABOVE : RS. 68 87 285 /- ADD: RENTAL INCOME AS DISCUSSED ABOVE : RS. 24 000/- TOTAL TAXABLE INCOME : RS. 69 61 28 5/- 4. NOT BEING SATISFIED WITH THE ORDER OF THE A.O. THE ASSESSEE CHALLENGED BEFORE THE LD. CIT(A) AND VARIOUS GROUNDS WERE RAIS ED AS AVAILABLE AT PAGE 1 & 2 OF CIT(A)S ORDER WHICH ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: 2.1. THAT HAVING REGARD TO THE FACTS AND CIRCUMST ANCES OF THE CASE THE ORDER PASSED BY THE LD. A.O. IS BAD IN LAW. 2.2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASES THE AO HAS ERRED IN LAW BY NOT ISSUING MANDATORY NOTICE U/S 143(2) OF THE I.T. ACT 1961. 2.3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASES THE LD. AO. HAS ERRED IN LAW AND FACTS BY MAKING AN ADDITION OF RS.68 87 285/- ON ACCOUNT OF UNEXPLAINED INVES TMENTS. 2.4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASES THE LD. A.O. HAS ERRED IN LAW AND FACTS BY MAKING AN ADDITION OF RS.68 87 285/- ON ACCOUNT OF UNEXPLAINED INVES TMENTS. 10 2.5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE THE LD. AO HAS NOT RECORDED THE REASONS ON HIS OW N HE JUST RELIED ON THE TAX EVASION PETITION RECEIVED ON 07 .04.2008 HE HIMSELF HAVE NO REASON TO BELIEVE THAT THE ASSESS EE HAS ESCAPED INCOME THE A.OS ORDER IS ILLEGAL UNLAWFUL AND VOID. 2.6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASES THE LD. A.O. HAS ERRED IN LAW AND FACTS THE LD. A.O. HAS MENTIONED THAT THE PERIOD OF CONSTRUCTION OF HOTE L IS FOR THE PERIOD FROM JUNE 2000 TO JUNE 2005 BUT WHILE MAKI NG ASSESSMENT THE LD. A.O. HAS FILED TO SPREAD OVE R THE ALLEGED UNEXPLAINED INVESTMENT ON THE CONSTRUCTION OF THE HOTEL BUILDING AND THE ENTIRE DIFFERENCE HAS BEEN ACCOU NTED FOR & CHARGED TO TAX IN THE YEAR UNDER CONSIDERATION W HICH IS AGAINST THE LAW & PRINCIPLES OF ACCOUNTANCY. 2.6.1. THAT HAVING REGARD TO THE FACTS AND CIRCUMS TANCES OF THE CASES THE LD. A.O. HAS ERRED IN LAW AND FACTS BY RELYI NG ON THE VALUATION REPORT OF THE VALUER WHICH IS NOT BASED ON THE FACTS & EVIDENCE AS THE INVESTMENT MADE BY ASSESSEE IN EACH YEAR NOT CARRIED BY THE VALUER WHICH IS AGAINST THE LAW. 2.6.2 THAT THE ADDITION MADE IS PURELY ON SURMISES CONJECTURES AND SUSPICION AND WITHOUT ANY DOCUMENTARY EVIDENCES. 2.7. THAT THE APPELLANT CARVES THE LEAVE TO ADD A MEND MODIFY DELETED ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PRE JUDICE TO EACH OTHER. 5. DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) DETAILED SUBMISSIONS WERE MADE BY THE ASSESSEE WHICH ARE RE PRODUCED BY THE LD. CIT(A) IN PARA 3 AT PAGES 2 TO 9 WHICH ARE NOT BEIN G REPRODUCED. BUT AT THE SAME TIME THE SAME HAVE BEEN NOTICED AND CONSIDERE D BY US WHICH IN SUM AND SUBSTANCE ADDRESSING TO THE VARIOUS PROVISIONS OF THE ACT DECISIONS OF VARIOUS COORDINATE BENCHES OF THE TRIBUNAL AND PRIN CIPLE OF LAW NOTICED BY VARIOUS COURTS OF LAW ON THE SUBJECT THAT ISSUANCE OF SERVICE OF NOTICE U/S 11 143(2) IS MANDATORY AND NOT PROCEDURAL WITHOUT WH ICH ASSUMPTION BY THE AO IS ILLEGAL AND VOID AB INITIO. 6. HAVING CONVINCED WITH THE SUBMISSIONS RAISED BY THE ASSESSEE THE LD. CIT(A) CALLED FOR THE RECORDS OF THE A.O. AND FOUND THAT THERE WAS AN ORDER SHEET ENTRY ACCORDING TO WHICH NOTICE U/S 143(2) W AS ISSUED ON 22/07/2011 AND THE SAID LETTER WAS USED WHICH REVEALED THAT NO TICE WAS NOT FOUND AND THE RELEVANT FINDINGS OF THE LD. CIT(A) IN PARA 4.1 AT PAGE 9 OF HIS ORDER ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MAD E BY THE APPELLANT THE ASSESSMENT ORDER AND RELEVANT CASE LAWS. ADMITTEDLY THE APPELLANT HAD FILED A RETURN PURSUANT TO THE N OTICE U/S 148 THOUGH BEYOND THE PERIOD MENTIONED IN THE SAID NOTICE AN D THIS WAS DONE BEFORE THE COMPLETION OF ASSESSMENT. RETURN PURSUA NT NO NOTICE U/S 148 WAS FILED BY THE APPELLANT ON 18.11.2012 AND A CCORDINGLY THE ASSESSMENT WAS COMPLETED ON 28.12.2011. THE A.O. H AS FAILED TO ISSUE NOTICE U/S 143(2) OF THE ACT BEFORE COMPLETI NG THE ASSESSMENT. I HAVE CALLED THE RECORDS OF THE PROCEEDINGS AND FOU ND THAT ON 22.07.2011 THERE WAS AN ORDER SHEET ENTRY THAT NOT ICE 142(1)/143(2) WAS ISSUED HOWEVER ON PERUSAL OF LETTER DATED 22. 07.2011 AND CASE RECORDS NO NOTICE U/S 143(2) WAS FOUND. 7. IT IS RELEVANT TO MENTION THAT THE ISSUANCE OF NOTICE WITH REFERENCE TO COMPUTATION OF INCOME UNDER SECTION 143(2) OF THE A CT IS MANDATORY FOR WHICH RELEVANT FINDINGS OF LD. CIT(A) AT PAGE 9 & 1 0 ARE REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: 6. THE A.O. HAVING SUCH RETURN FOR FINALIZING THE ASSESSMENT WAS DUTY BOUND TO COMPLY WITH THE REQUIREMENT OF THE A CT FOR ISSUING 12 NOTICES. ISSUE OF A NOTICE UNDER SECTION 143(2) WA S CONSIDERED MANDATORY IN RE-ASSESSMENT PROCEEDINGS U/S 148 BY MADRAS HIGH COURT IN THE CASE OF CIT VS. M CHELLAPPAN (2005) 1 98 CTR 490 & CIT VS C PALANIAPPAN (2006) 284 ITR 257 AND BY PUN JAB & HARYANA HIGH COURT IN THE CASE OF VIPIN KHANNA VS. CIT (20 02) 175 CTR 335. ISSUE OF A NOTICE UNDER SECTION 143(2) WAS CONSID ERED MANDATORY IN A BLOCK ASSESSMENT PROCEEDING AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF HOTEL BLUE MOON. NO DOUB T WHERE A RETURN IS FILED IN PURSUANCE OF A NOTICE UNDER SECTION 14 8(1) OF THE ACT IT CLEARLY SAYS THAT PROVISION OF THE WOULD APPLY SO FAR AS MAY BE TO IT AS THOUGH IT WAS A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 OF THE ACT. THE TERM SO FAR AS MAY BE HAS BEEN INT ERPRETED BY HON'BLE APEX COURT IN THE CASE OF HOTEL BLUE MOON THOUGH IN RELATION TO SECTION 158BC(B) OF THE ACT AS NO TO EXCLUDE THE REQUIREMENTS OF SECTION 143(2). PROVISION CONTAINED IN SECTION 143(2) IS MANDATO RY IN NATURE AND IT IS OBLIGATORY FOR THE A.O. TO APPLY HIS MIN DS TO THE CONTENTS OF THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 . NON ISSUE OF NOTICE U/S 143(2) AFTER FILING OF RETURN BY ASSESSEE VITI ATED THE REASSESSMENT PROCEEDINGS AS HELD IN CIT VS. RAJEEV SHARMA (2010 ) 232 CTR 303 (ALL). THE FACT OF THE PRESENT CASE IS SIMILAR TO THE FA CTS IN THE CASE OF INDO SWISS EXPORTS LTD. CHENNAI VS. DEPARTMENT OF INCOME TAX DECIDED BY THE HON'BLE I.T.A.T. CHENNAI IN THE FA VOUR OF ASSESSEE. IN THE SAID CASE A NOTICE U/S 148 OF THE ACT WAS ISS UED TO THE ASSESSEE ON 28.02.2007 PROPOSING A RE-ASSESSMENT. PURSUANT TO SUCH NOTICE ASSESSEE FILED A RETURN ON 19.12.2007. A.O. WAS OF THE OPINION THAT THE RETURN FILED PURSUANT TO NOTICE U/S 148 OF THE ACT WAS BELATED SINCE IT WAS BEYOND THE PERIOD MENTIONED IN THE SAID NOTICE . HE THEREFORE PROCEEDED TO COMPLETE THE ASSESSMENT ON BEST OF JU DGMENT BASIS U/S 144 OF THE ACT WITHOUT ISSUING A NOTICE U/S 143(2) OF THE ACT. THE RETURN WAS FILED BEFORE THE COMPLETION OF ASSESSME NT AND WAS CONSIDERED FOR THE PURPOSE OF ASSESSMENT. HON'BLE TRIBUNAL HELD THAT A.O. HAVING CONSIDERED SUCH RETURN FOR FINALIZING THE ASSESSMENT WAS DUTY BOUND TO COMPLY WITH THE REQUIREMENT OF THE A CT FOR ISSUING NOTICES. HON'BLE TRIBUNAL ALSO HELD THAT THE REQUI REMENT OF SECTION 13 143(3) OF THE ACT WOULD ALSO APPLY WHERE REASSESSM ENT PROCEEDINGS ARE INITIATED. NO DOUBT PROVISO TO SECTION 148(1) OF THE ACT DO MENTION CERTAIN SITUATIONS WHERE A NOTICE SERVED E VEN AFTER THE EXPIRY OF TWELVE MONTHS WOULD NOT BE CONSIDERED INVALID. HOWEVER THESE ARE CASES WHERE A NOTICE WAS SERVED THOUGH LATE. HERE ADMITTEDLY NO NOTICE WAS ISSUED U/S 143(2) OF THE ACT AT ALL. TH E HON'BLE TRIBUNAL THEREFORE QUASHED THE ORDER FOR NON-ISSUANCE OF N OTICE U/S 143(2) OF THE ACT. THE FIRST AND SECOND PROVISO TO SECTION 148 SPEC IALLY MENTIONS THE TIME FOR ISSUING NOTICE U/S 143(2) OF THE ACT. THUS I AM OF THE OPINION THAT THE REQUIREMENT OF SECTION 143(2) OF THE ACT WOULD APPLY EVEN WHERE RE-ASSESSMENT PROCEEDING ARE INITIATED. IN THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ASHOK CHA DDHA VS. ITO (2011) 337 ITR 399 IT IS HELD THAT THERE IS NO SP ECIFIC PROVISION IN THE ACT REQUIRING THE ISSUE OF NOTICE U/S 143(2) AND T HE WORDS SO FAR AS MAY BE CANNOT BE STRETCHED TO THE EXTENT OF MANDA TORY ISSUE OF NOTICE U/S 143(2). HOWEVER FIRST AND SECOND PROVISO TO S ECTION 148 SPECIFICALLY MENTIONS THAT IN CASE NOTICE IS NOT I SSUED WITHIN TIME PRESCRIBED U/S 153(2) IT MUST BE ISSUED BEFORE TH E EXPIRY OF TIME LIMIT FOR MAKING ASSESSMENT OR REASSESSMENT TO BE DEEMED AS VALID NOTICE. THUS IT IS CLEAR FROM THE SECTION ITSELF THAT THE ISSUE OF NOTICE U/S 143(2) IS MANDATORY IN THE CASE OF ASSESSMENT U/S 148 OF THE ACT. 9. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSE E VIDE PARA 4.3 & 4.4 AND THE RELEVANT FINDINGS ARE EXTRACTED HEREINBELOW : ON PERUSAL OF THE PROVISIONS OF SECTION 292BB IT IS OBSERVED THAT THE PROVISIONS OF SECTION COMES INTO PLAY WHEN A NOTIC E IS ISSUED BUT NOT SERVED SERVED LATE OR SERVED IN IMPROPER MANNER. HOWEVER IF A NOTICE IS NOT ISSUED THE PROVISIONS OF THE SECTION ARE N OT APPLICABLE. THE HON'BLE HIGH COURT OF DELHI IN WRIT PETITION (CIVIL) NO. 7632/2010 DECISION DATED 24 TH JANUARY 2012 IN THE CASE OF ALPINE ELECTRONICS ASIA PTE LTD. HAS CLARIFIED THE APPLIC ABILITY OF THE PROVISIONS OF SECTION 292BB OF THE ACT WHAT IS TH E EFFECT OF THE FAILURE TO ISSUE NOTICE UNDER SECTION 143(2) WITHI N THE PERIOD 14 STIPULATED IN THE PROVISO TO CLAUSE (II) AND EFFEC T OF SECTION 292BB OF THE ACT. AS PER HON'BLE HIGH COURT IT IS NOW WELL SETTLED THAT SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN T HE STATUTORY TIME LIMIT IS MANDATORY AND IS NOT A PROCEDURAL REQUIRE MENT WHICH IS INCONSEQUENTIAL. THE A.O. TREATED THE RETURN OF INCOME AS NONEST O NLY ON THE GROUND THAT RETURN WAS FIELD BY THE APPELLANT AFTE R THE TIME PRESCRIBED IN THE NOTICE U/S 148 OF THE ACT. ADMITTEDLY THE A.O. NEITHER POINTED OUT ANY DEFECT IN THE RETURN OF INCOME NOR PROVIDE D ANY OPPORTUNITY TO THE APPELLANT BEFORE TREATING THE RETURN AS NONEST AS PRESCRIBED U/S 139(9) OF THE ACT. I AM OF THE CONSIDERED OPINION THAT RETURN CANNOT BE TREATED NONEST ONLY ON THE PRETEXT OF LATE FILING OF RETURN. THE A.O. ON THE ONE HAND IS TREATING THE RETURN NONEST WHILE O N THE OTHER HAND INCORPORATING RETURNED INCOME AS BASIS FOR HIS ASS ESSMENT U/S 144. THE BELATED RETURN SHOULD NOT HAVE BEEN REJECTED WITHO UT GIVING PROPER OPPORTUNITY TO THE APPELLANT. THE OBSERVATION IS A LSO SUPPORTED BY THE PROVISIONS OF SECTION 234A(3) OF THE ACT WHICH CLE ARLY STATES THAT IF APPELLANTS FILES THE RETURN AFTER THE EXPIRY OF TH E TIME PRESCRIBED IS NOTICE U/S 148 OF THE ACT HE SHOULD BE PENALIZED BY CHARGING AN INTEREST TILL THE DATE OF FILLING OF RETURN. PROVISION OF SECTION 234A(3) IS REPRODUCED BELOW; WHERE THE RETURN OF INCOME FOR ANY ASSESSMENT YEAR REQUIRED BY A NOTICE UNDER SECTION 148 [OR SECTION 153A] ISSUED [AFTER THE DETERMINATION OF INCOME UNDER SUB-SECTION (1) OF S ECTION 143 OR ]AFTER THE COMPLETION OF AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR SECTION 144 OR SECTION 147 IS FURNISHED AFTER THE EXPIRY OF THE TIME ALLOWED UNDER SUCH NOTICE OR IS NOT FURNISHED TH E ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD C OMMENCING ON THE DAY IMMEDIATELY FOLLOWING THE EXPIRY OF THE TIME ALLOWED AS AFORESAID AND - (A) WHERE THE RETURN IS FURNISHED AFTER THE EXPIRY OF THE TIME AFORESAID ENDING ON THE DATE OF FURNISHED THE RETURN; OR (B) WHERE NO RETURN HAS BEEN FURNISHED ENDING ON THE D ATE OF COMPLETION OF THE REASSESSMENT OR RE-COMPUTATION UNDER SECTION 147 [OR REASSESSMENT UNDER SECTION 153A] 15 ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF SUCH REASSESSMENT OR RE-COMPUTATION EXCE EDS THE TAX ON THE TOTAL INCOME DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR] ON THE BASIS OF THE EARLIER ASSESSMENT AFORESAID. THE HON'BLE I.T.A.T. BANGALORE HAS ALSO CONSIDERE D THIS ISSUE OF BELATED RETURN IN PURSUANCE TO NOTICE U/S 148 OF T HE ACT IN THE CASE OF H GOUTHANCHAND VS. ADDITIONAL COMMISSIONER OF INCO ME TAX (2011) 8 ITR 269 IN WHICH THE HON'BLE TRIBUNAL HAS HELD THAT SECTION 234A(3) MENTIONS THAT INTEREST CAN BE CHARGED U/S 234A WHEN THE RETURN IS FURNISHED AFTER EXPIRY OF THE TIME PROVI DED IN THE NOTICE. IT WILL END ON THE DATE OF FURNISHING OF RETURN. THIS THEREFORE SQUARELY SUGGESTS THAT AN ASSESSEE CAN FILE A RETURN BEYOND THE TIME PRESCRIBED IN THE NOTICE ISSUED U/S 148 OF THE ACT. BASED ON THE PROVISIONS OF THE LAW AND SEVERAL JUD GMENTS I AM OF THE CONSIDERED OPINION THAT THE ASSESSMENT WAS MADE WI THOUT ASSUMING PROPER JURISDICTION WHICH IS VOID AB INITIO AND AS SESSMENT IS THUS QUASHED ON LEGAL ISSUE. THE MERIT OF ADDITION ON ACCOUNT OF UNEXPLAINED IN VESTMENT IS NO LONGER REQUIRED TO BE CONSIDERED IN VIEW OF THE AB OVE FINDINGS. IN THE RESULT THE APPEAL IS ALLOWED. 10. THE LD. DR MR. TARSEM LAL ARGUED THAT THE APPE AL HAS BEEN ALLOWED WRONGLY BY THE LD. CIT(A) VIDE HIS ORDER DATED14.0 1.2013 FOR THE REASONS THAT THE LD. CIT(A) HAS GONE WRONG IN ALLOWING THE APPEAL WITHOUT EVEN RECORDING THE FINDINGS THAT FIRSTLY WHETHER CHALLEN GE IS ASSUMPTION OF JURISDICTION/OR APPLICATION THEREOF SECONDLY EVEN BEFORE THIS BENCH THE SAID ASPECT REMAINED UNADDRESSED THIRDLY THERE BEING N ON SERVICE OF NOTICE DURING THE PROCEEDINGS HAS BEEN MADE FOR WHICH NOTI CE U/S 142 HAS BEEN 16 SERVED AND THE PRESENT APPEAL ARISES FOURTHLY FUR NISHING OF PARTIAL INFORMATION THEN WHAT IS THE FATE OF REASONS TO BEL IEVE AND WHICH MATERIAL FACT CONTAINING MATERIAL PARTICULARS IS AVAILABLE ON RECORD IN THE CASE PROCEEDINGS AND FIFTHLY THE INITIATION OF THE ASSE SSMENT IS NULLITY BECAUSE OF SUBSEQUENT DEFECT IN THE SERVICE OF NOTICE. 11. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY RELIE D UPON THE DECISION OF THE LD. CIT(A) AND MADE A PRAYER FOR UPHOLDING THE SAID ON THE PRINCIPLE OF LAW EXTRACTING THAT FURTHER PRAYER FOR DISMISSING THE DEPARTMENTAL APPEAL CONTENDING THAT THE SERVICE OF MANDATORY NOTICE UND ER SECTION 143(2) IS A DEFECT WHICH IS A PROCEDURAL LAPSE AND IS NOT CURAB LE AND THUS THE ORDER OF THE LD. CIT(A) IS SUSTAINABLE IN ACCORDANCE WITH LA W. HE RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW AS UNDER: I) CIT VS. CEBON INDIA LTD. (2012) 347 ITR 583 (P& H) DATED 7 TH JULY 2009. II) ALPINE ELECTRONICS ASIA PTE LTD. VS. DIRECTOR GENERAL OF INCOME TAX & OTHERS IN WRIT PETITION (CIVIL) NO. 7932/2010 DATED 24 TH JANUARY 2012.(DELHI) III) INDO SWISS EXPORTS LTD. CHENNAI VS. DEPARTMENT OF I NCOME TAX ITA NO.922/MDS/2011 DATED 21.06.2012. COPIES OF ALL THE DECISIONS WERE PLACED ON RECORD B Y THE LD. COUNSEL FOR THE ASSESSEE. 17 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND ERUSED THE FACTS OF THE CASE. AS REGARDS THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT REASSESSMENT IS NULLITY THAT THERE BEING A JURISDI CTIONAL DEFECT IN CONTINUATION OF PROCEEDINGS WE ARE OF THE VIEW THA T THE WORD JURISDICTION DOES NOT HAVE A FIXED MEANING AND IN ONE SENSE IT M EANS AN ENTITLEMENT TO ENTER UPON THE ENQUIRY IN QUESTION AND IN WIDER SEN SE IT IMPLIES RIGHT TO CONDUCT ENQUIRY INTO THE MATTER IN LAWFUL MANNER. 12.1 IN THE AFORESAID CONTEXT THERE IS NO ARGUMENT ON BEHALF OF THE ASSESSEE AS TO WHAT NATURE OF CHALLENGE IS BEING MADE TO THE PROCEEDINGS I.E. ON THE ASSUMPTION OF JURISDICTION/ OR APPLICATION THEREOF AND FURTHER TO STATE THAT NO PLEADINGS HAVE BEEN RAISED OF WHATSOEVER KIND WHICH ADDRESSES THE POINT THAT THE AO DO NOT HAVE ANY RIGHT TO CONDUCT ENQUIR Y. 12.2. THE ANOTHER ISSUE WHICH LEADS TO BE CONSIDERE D IS THE CHALLENGE TO THE JURISDICTION IS DETERMINABLE AT THE COMMENCEMENT A ND NOT AT THE CONCLUSION OF THE PROCEEDINGS AND THIS ASPECT HAS BEEN VERY CL EARLY NOTICED BY THE HONBLE SUPREME COURT IN THE CASE OF M.L. SETHI VS. R.P. KAPUR REPORTED IN (1972) 2 SCC 427 IN PARA 12 AT PAGES 434 & 435 WHIC H FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: THE 'JURISDICTION' IS A VERBAL COAT OF MANY COLOUR S JURISDICTION ORIGINALLY SEEMS TO HAVE HAD THE MEANING WHICH LOR D REID ASCRIBED TO IT IN ANISMINIC LTD. V. FOREIGN 18 COMPENSATIONOMMISSION NAMELY THE ENTITLEMENT 'TO ENTER UPON THE ENQUIRY IN QUESTION'. IF THERE WAS AN ENTITLEMENT TO ENTER UPON AN ENQUIRY INTO THE QUESTION BEEN ANY SUBSEQUENT ERR OR COULD ONLY BE REGARDED AS AN ERROR WITHIN THE JURISDICTION. THE BEST KNOWN FORMULATION OF THIS THEORY IS THAT MADE BY LORD DA RMAN IN R. V. BOLTON. HE SAID THAT THE QUESTION OF JURISDICTION IS DETERMINABLE AT THE COMMENCEMENT NOT AT THE CONCLUSION OF THE ENQUIRY. IN ANISMINIC LTD. CASE (SUPRA) LORD REID SAID: 'BUT THERE ARE MANY CASES WHERE ALTHOUGH THE TRIB UNAL HAD JURISDICTION TO ENTER ON THE ENQUIRY IT HAS DONE O R FAILED TO DO SOMETHING IN THE COURSE OF THE ENQUIRY WHICH IS OF SUCH A NATURE THAT ITS DECISION IS A NULLITY. IT MAY HAVE GIVEN ITS DECISION IN BAD FAITH. IT MAY HAVE MADE A DECISION WHICH IT HAD NO POWER TO MAKE. IT MAY HAVE FAILED IN THE COURSE OF THE ENQUIRY TO COMPLY WITH THE REQUIREMENTS OF NATURAL JUSTICE. IT MAY IN PERFECT GOOD FAITH HAVE MISCONSTRUED THE PROVISIONS GIVING IT POWER TO AC T SO THAT IT FAILED TO DEAL WITH THE QUESTION REMITTED TO IT AND DECIDED SOME QUESTION WHICH WAS NOT REMITTED TO IT. IT MAY HAVE REFUSED TO TAK E INTO ACCOUNT SOMETHING WHICH IT WAS REQUIRED TO TAKE INTO ACCOU NT. OR IT MAY HAVE BASED ITS DECISION ON SOME MATTER WHICH UND ER THE PROVISIONS SETTING IT UP IT HAD NO RIGHT TO TAKE INTO ACCOUN T. I DO NOT INTEND THIS LIST TO BE EXHAUSTIVE.' IN THE SAME CASE LORD PEARCE SAID 'LACK OF JURISDICTION MAY ARISE IN VARIOUS WAYS. T HERE MAY BE AN ABSENCE OF THOSE FORMALITIES OR. THINGS WHICH ARE CONDITIONS PRECEDENT TO THE TRIBUNAL HAVING ANY JURISDICTION TO EMBARK ON AN ENQUIRY. OR THE TRIBUNAL MAY AT THE END MAKE AN O RDER THAT IT HAS NO JURISDICTION TO MAKE. OR IN THE INTERVENING STAGE WHILE ENGAGED ON A PROPER ENQUIRY THE TRIBUNAL MAY DEPART FROM THE R ULES OF NATURAL JUSTICE; OR IT MAY ASK ITSELF THE WRONG QUESTIONS; OR IT MAY TAKE INTO ACCOUNT MATTERS WHICH IT WAS NOT DIRECTED TO TAKE INTO ACCOUNT. THEREBY IT WOULD STEP OUTSIDE ITS JURISD ICTION. IT WOULD TURN ITS INQUIRY INTO SOMETHING NOT DIRECTED BY PARLIA MENT AND FAIL TO MAKE THE INQUIRY WHICH THE PARLIAMENT DID DIRECT. ANY OF THESE THINGS WOULD CAUSE ITS PURPORTED DECISION TO BE A NULLITY .' 19 THE DICTA OF THE MAJORITY OF THE HOUSE OF LORDS IN THE ABOVE CASE WOULD SHOW THE EXTENT TO WHICH `LACK' AND 'EXCESS ' OF JURISDICTION HAVE BEEN ASSIMILATED OR IN OTHER WORDS THE EXT ENT TO WHICH WE HAVE MOVED AWAY FROM THE TRADITIONAL CONCEPT OF 'J URISDICTION'. THE EFFECT OF THE DICTA IN THAT CASE IS TO REDUCE THE DIFFERENCE 'BETWEEN JURISDICTIONAL ERROR AND ERROR OF LAW WIT HIN JURISDICTION ALMOST TO VANISHING POINT. THE PRACTICAL EFFECT OF THE DECISION IS THAT ANY ERROR OF LAW CAN BE RECKONED AS JURISDICTIONAL . THIS COMES PERILOUSLY CLOSE TO SAYING THAT THERE IS JURISDICT ION IT THE DECISION IS RIGHT IN LAW BUT NONE IF IT IS WRONG. ALMOST ANY MISCONSTRUCTION OF A STATUTE CAN BE REPRESENTED AS 'BASING THEIR DECI SION ON A MATTER WITH WHICH THEY HAVE NO RIGHT TO DEAL' 'IM POSING AN UNWARRANTED CONDITION' OR 'ADDRESSING THEMSELVES T O A WRONG QUESTION'. THE MAJORITY OPINION IN THE CASE LEAVE S A COURT OR TRIBUNAL WITH VIRTUALLY NO MARGIN OF LEGAL ERROR. WHETHER THERE IS EXCESS OF JURISDICTION OR MERELY ERROR WITHIN JURI SDICTION CAN BE DETERMINED ONLY BY CONSTRUING THE EMPOWERING STATU TE WHICH WILL GIVE LITTLE GUIDANCE. IT IS REALLY A QUESTION OF HOW MUCH LATITUDE THE COURT IS PREPARED TO ALLOW. IN THE END IT CAN ONLY BE A VALUE JUDGMENT (SEE H.W.R. WADE 'CONSTITUTIONAL AND ADM INISTRATIVE ASPECTS OF THE ANISMANIC CASE' LAW QUARTERLY REV IEW VOL. 85 1969 P. 198). WHY IS IT THAT A WRONG DECISION ON A QUESTION OF LIMITATION OR RES JUDICATA 'WAS TREATED AS A JURIS DICTIONAL ERROR AND LIABLE TO BE INTERFERED WITH IN REVISION ? IT IS A IT DIFFICULT TO UNDERSTAND HOW AN ERRONEOUS DECISION ON A QUESTION OF LIMITATION OR RES JUDICATA WOULD OUST THE JURISDICTION OF THE CO URT IN THE PRIMITIVE SENSE OF THE TERM AND RENDER THE DECISION OR A DE CREE EMBODYING THE DECISION A NULLITY LIABLE TO COLLATERAL ATTACK . THE REASON CAN ONLY BE THAT THE ERROR OF LAW WAS CONSIDERED AS VI TAL BY THE COURT. AND THERE IS NO YARDSTICK TO DETERMINE THE MAGNITUDE O F THE ERROR OTHER THAN THE OPINION OF THE COURT. 12.3. THE AFORESAID PRINCIPLE OF LAW WITH GREATEST RESPECT WE ARE BOUND TO FOLLOW. 12.4. EVEN AS PER RECORDS BEFORE US IT HAS BEEN NO TICED THAT THE ASSESSEE HAS BEEN DILIGENT IN PURSUING THE REMEDY AVAILABLE THR OUGH ATTENDING TO THE CASE 20 PROCEEDINGS BEFORE THE AO AND IT IS A SETTLED LAW T HAT OBJECTION REGARDING JURISDICTION BE RAISED AT THE EARLIER POSSIBLE OPPO RTUNITY. THUS THERE IS NO REASON FOR COMING FORWARD FOR THE ASSESSEE WAITING FOR SUCH LONG FOR RAISING SAID OBJECTION (LEGAL GROUND) AFTER COMPLETION OF R EASSESSMENT. ANOTHER ISSUE TO BE ADDRESSED IS THAT CHALLENGE IS NOT TO T HE CONTINUATION OF PROCEEDINGS BY THE A.O. WHEREAS THE PURPOSE OF ISSU ANCE NOTICE U/S 143(2) OF THE ACT CANNOT BE LOST SIGHT AND WE ARE SUPPORT ED BY THE PRINCIPLE OF LAW AS NOTICED IN THE CASE OF DHIRENDRA NATH GOARI ( IN CA NO.85 OF 1961) SUBAL CHANDRA NATH SAHA AND OTHERS ( IN CA NO.86 OF 1961) VS. SUDHIR CHANDRA GHOSH AND OTHERS (1964) 6 SCR 1001 : AIR 1964 SC 1300. IN PARA-7 WHERE THE DIFFERENCE BETWEEN A NULLITY AND AN IRREGULARITY HAS BEEN NOTICED WHICH HAS BEEN EXTRACTED HEREINBELOW: EVEN THEN THE QUESTION ARISES WHETHER AN ACT DONE IN BREACH OF THE MANDATORY PROVISION IS PER FORCE A NULLITY. IN AS HUTOSH SIKDAR V. BEHARI LAL KIRTANIA(1) MOOKERJEE J. AFTER REFE RRING TO MACNAMARA ON 'NULLITY AND IRREGULARI- TIES' OBSERVED : NO HARD AND FAST LINE CAN BE DRAWN BETWEEN A NULL ITY AND AN IRREGULARITY; BUT THIS MUCH IS CLEAR THAT AN IRR EGULARITY IS A DEVIATION FROM A RULE OF LAW WHICH DOES NOT TAKE AWAY THE FOUNDATION OR AUTHORITY FOR THE PROCEEDING OR APPLY TO ITS W HOLE OPERATION WHEREAS A NULLITY IS A PROCEEDING THAT IS TAKEN WI THOUT ANY FOUNDATION FOR IT OR IS SO ESSENTIALLY DEFECTIVE AS TO BE OF NO AVAIL OR EFFECT WHATEVER OR IS VOID AND INCAPABLE OF BEING VALID ATED.' WHETHER A PROVISION FALLS UNDER ONE CATEGORY OR TH E OTHER IS NOT EASY OF DISCERNMENT BUT IN THE ULTIMATE ANALYSIS IT D EPENDS UPON THE 21 NATURE SCOPE AND OBJECT OF A PARTICULAR PROVISIO N. A WORKABLE TEST HAS BEEN LAID DOWN BY JUSTICE COLERIDGE IN HOLMES V. RUSSELL(2) WHICH READS: 'IT IS DIFFICULT SOMETIMES TO DISTIN GUISH BETWEEN AN IRREGULARITY AND A NULLITY; BUT THE SAFEST RULE TO DETERMINE WHAT IS AN IRREGULARITY AND WHAT IS A NULLITY IS TO SEE WHETHER THE PARTY CAN WAIVE THE OBJECTION; IF HE CAN WAIVE IT IT AMOUN TS TO AN IRREGULARITY; IF HE CANNOT IT IS A NULLITY.' A W AIVER IS AN INTENTIONAL RELINQUISHMENT OF A KNOWN RIGHT BUT OB VIOUSLY AN OBJECTION TO JURISDICTION CANNOT BE WAIVED FOR CO NSENT CANNOT GIVE A COURT JURISDICTION WHERE THERE IS NONE. EVEN IF T HERE IS INHERENT JURISDICTION CERTAIN PROVISIONS CANNOT BE WAIVED . MAXWELL IN HIS BOOK 'ON THE (1) (1908) I.L.R. 35 CAL. 61 72. (2 ) [1841] 9 DOWL. 487. 1012. INTERPRETATION OF STATUTES' 11TH EDN. AT P. 375 DESCRIBES THE RULE THUS: 'ANOTHER MAXIM WHICH SANCTIONS THE NON- OBSERVANCE OF A STATUTORY PROVISION IS THAT CUILIBET LICET RENUNTIARE JURI PRO SE INTRODUCTO. EVERYONE HAS A RIGHT TO WAIVE AND TO AGREE TO WAI VE THE ADVANTAGE OF A LAW OR RULE MADE SOLELY FOR THE BENEFIT AND PROTECTION OF THE INDIVIDUAL IN HIS PRIVATE CAPACITY WHICH MAY BE D ISPENSED WITH WITHOUT INFRINGING ANY PUBLIC RIGHT OR PUBLIC POLI CY.' THE SAME RULE IS RESTATED IN 'CRAIES ON STATUTE LAW' 6TH EDN. AT P. 269 THUS : 'AS A GENERAL RULE THE CONDITIONS IMPOSED BY STAT UTES WHICH AUTHORISE LEGAL PROCEEDINGS ARE TREATED AS BEING INDISPENSA BLE TO GIVING THE COURT JURISDICTION. BUT IF IT APPEARS THAT THE ST ATUTORY CONDITIONS WERE INSERTED BY THE LEGISLATURE SIMPLY FOR THE S ECURITY OR BENEFIT OF THE PARTIES TO THE ACTION THEMSELVES AND THAT NO PUBLIC INTERESTS ARE INVOLVED SUCH CONDITIONS WILL NOT BE CONSIDER ED AS INDISPENSABLE AND EITHER PARTY MAY WAIVE THEM WIT HOUT AFFECTING THE JURISDICTION OF THE COURT.' 12.5 HAVING NOTICED MATERIAL FACTS WE CONSIDER IT APPROPRIATE WITH GREAT RESPECT IN ACCORDANCE WITH THE PRINCIPLE OF LAW THA T AT THE MOST THE PRESENT KIND OF GRIEVANCE IS MERELY AN ERROR WITHIN JURISD ICTION WHICH CAN BE 22 DETERMINED ONLY BY CONSTRUING THE EMPOWERING STATU TE WHICH WILL GIVE GUIDANCE ON THE SUBJECT AND IN THE PRESENT CASE. FU RTHER WE ARE SUPPORTED BY THE DECISION OF ACIT VS. HOTEL BLUE MOON DECIDED BY THE HONBLE SUPREME COURT REPORTED IN (2010) 321 ITR 362 DATED 2 ND FEB. 2010. THUS THE PURPOSE IS TO GIVE OPPORTUNITY TO THE ASSESSEE FOR BRINGING TO THE KNOWLEDGE THE PROCEEDINGS BEING UNDERTAKEN IN ACCORDANCE WITH LAW WHICH TOO HAS BEEN DONE BY THE A.O. THE RELEVANT PART OF THE DECI SION IN THE CASE OF ACIT & ANR. VS. HOTEL BLUE MOON REPORTED IN (2010) 321 I TR 362 (SC) IN PARA 15 IS REPRODUCED AS UNDER: BUT S. 143(2) ITSELF BECOMES NECESSARY ONLY WHERE I T BECOMES NECESSARY TO CHECK THE RETURN SO THAT WHE RE BLOCK RETURN CONFORMS TO THE UNDISCLOSED INCOME INFERRED BY THE AUTHORITIES THERE IS NO REASON W HY THE AUTHORITIES SHOULD ISSUE NOTICE UNDER S. 143(2 ). HOWEVER IF AN ASSESSMENT IS TO BE COMPLETED UNDER S. 143(3) R/W S. 158BC NOTICE UNDER S. 143(2) SHOULD BE ISSUED WITHIN ONE YEAR FROM THE DATE OF FILING OF BLOCK RETURN. OMISSION ON THE PART OF THE ASSESSIN G AUTHORITY TO ISSUE NOTICE UNDER S. 143(2) CANNOT B E A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABL E AND THEREFORE THE REQUIREMENT OF NOTICE UNDER S. 143(2) CANNOT BE DISPENSED WITH. THE OTHER IMPORTA NT FEATURE THAT REQUIRES TO BE NOTICED IS THAT THE S. 158BC(B) SPECIFICALLY REFERS TO SOME OF THE PROVIS IONS OF THE ACT WHICH REQUIRES TO BE FOLLOWED BY THE AO WHILE COMPLETING THE BLOCK ASSESSMENTS UNDER CHAPT ER XIV-B OF THE ACT. THIS LEGISLATION IS BY INCORPORATION. THIS SECTION EVEN SPEAKS OF SUB- SECTIONS WHICH ARE TO BE FOLLOWED BY THE AO. HAD T HE INTENTION OF THE LEGISLATURE WAS TO EXCLUDE THE PROVISIONS OF CHAPTER XIV OF THE ACT THE LEGISLAT URE WOULD HAVE OR COULD HAVE INDICATED THAT ALSO. A READING OF THE PROVISION WOULD CLEARLY INDICATE I N OUR OPINION IF THE AO IF FOR ANY REASON REPUDIA TES 23 THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NO TICE UNDER S. 158BC(A) THE AO MUST NECESSARILY ISSUE NOTICE UNDER S. 143(2) OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO S. 143(2) OF THE ACT. WHERE THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN PROVISIONS FROM THE AMBIT OF S. 158BC(B) IT HAS DO NE SO SPECIFICALLY. THUS WHEN S. 158BC(B) SPECIFICAL LY REFERS TO [SIC-S. 143(2)] APPLICABILITY OF THE PRO VISO THERETO CANNOT BE EXCLUDED. WE MAY ALSO NOTICE HER E ITSELF THAT THE CLARIFICATION GIVEN BY CBDT IN ITS CIRCULAR NO. 717. DT. 14TH AUG.. 1995 HAS A BINDI NG EFFECT ON THE DEPARTMENT BUT NOT ON THE COURT. TH IS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPE CT OF SERVICE OF NOTICE UNDER SUB-S. (2) OF S. 143 OF THE ACT. ACCORDINGLY WE CONCLUDE EVEN FOR THE PURPOSE OF CHAPTER XIV-B OF THE ACT. FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF S. 158BC. THE PROVISIONS OF S. 142 A ND SUB-SS. (2) AND (3) OF S. 143 ARC APPLICABLE AND N O ASSESSMENT COULD BE MADE WITHOUT ISSUING NOTICE UN DER S. 143(2) OF THE ACT. HOWEVER IT IS CONTENDED BY SRI SHEKHAR. LEARNED COUNSEL FOR THE DEPARTMENT THAT I N VIEW OF THE EXPRESSION 'SO FAR AS MAY BE' IN S. 153BC(B) THE ISSUE OF NOTICE IS NOT MANDATORY BUT OPTIONAL AND ARE TO BE APPLIED TO THE EXTENT PRACTICABLE. IN SUPPORT OF THAT CONTENTION THE LEARNED COUNSEL HAS RELIED ON THE OBSERVATION MADE BY THIS COURT IN DR. PARTAP SINGH'S CASE (SUPRA). IN THIS CASE THE COURT HAS OBSERVED THAT S. 37(2) PROVIDE S THAT 'THE PROVISIONS OF THE CODE RELATING TO SEARC HES SHALL SO FAR AS MAY BE APPLY TO SEARCHES DIRECTED UNDER S. 37(2). READING THE TWO SECTIONS TOGETHER IT MERELY MEANS THAT THE METHODOLOGY PRESCRIBED FOR CARRYING OUT THE SEARCH PROVIDED IN S. 165 HAS TO BE GENERALLY FOLLOWED. THE EXPRESSION 'SO FAR AS MAY BE' HAS ALWAYS BEEN CONSTRUED TO MEAN THAT THOSE PROVISIONS MAY BE GENERALLY FOLLOWED TO THE EXTENT POSSIBLE. THE LEARNED COUNSEL FOR THE RESPONDENT H AS BROUGHT TO OUR NOTICE THE OBSERVATIONS MADE BY THI S COURT IN THE CASE OF MAGANLAL V. JAISWAL INDUSTRIE S & ORS. [1989] 4 SCC 344 WHEREIN THIS COURT WHILE DEALING WITH THE SCOPE AND IMPORT OF THE EXPRESSIO N 'AS FAR AS PRACTICABLE' HAS STATED 'WITHOUT ANYTHI NG MORE THE EXPRESSION 'AS FAR AS POSSIBLE' WILL MEAN THAT THE MANNER PROVIDED IN THE CODE FOR ATTACHMEN T OR SALE OF PROPERTY IN EXECUTION OF A DECREE SHALL BE 24 APPLICABLE IN ITS ENTIRETY EXCEPT SUCH PROVISION THEREIN WHICH MAY NOT BE PRACTICABLE TO BE APPLIED .' 13. THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY R ELIED UPON THE DECISION IN THE CASE OF CIT VS. CEBON INDIA LTD. (2012) 34 7 ITR 583 INDO SWISS EXPORTS LTD; CHENNAI VS. DEPARTMENT OF INCOME TAX D ATED 21 ST JUNE 2012 (ITAT CHENNAI) DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF ALPINE ELECTRONICS ASIA PTE LTD. VS. DIRECTOR GENER AL OF INCOME TAX & OTHERS DATED 24 TH JANUARY 2012 IN WRITE PETITION (CIVIL) NO.7932/20 10 QUO PROPOSITION IN THE ABSENCE OF SERVICE OF NOTICE U/S 143(2) AND WITH GREAT RESPECT THE DECISION OF CIT VS. CEBON INDIA LTD. (S UPRA) WAS CONFIRMED FINDING OF FACT AS RECORDED. WE ARE IN AGREEMENT W ITH THE DECISION STATING THEREIN THAT MERELY GIVING OF DISPATCH NUMBER WILL NOT RENDER THE FINDING TO BE PERVERSE AND ABSENCE OF NOTICE CANNOT BE HELD T O BE CURABLE UNDER SECTION 292 BB OF THE ACT. 14. AS REGARDS THE DECISION IN THE CASE OF ALPINE E LECTRONICS ASIA PTE LTD. VS. DIRECTOR GENERAL OF INCOME TAX & OTHERS (S UPRA) THE HONBLE COURT REFERRED TO THE DECISION OF HOTEL BLUE MOON ( SUPRA) AND HAVING CONSIDERED THE PRINCIPLES INVOLVED THEREIN HELD TH AT THE FINAL ASSESSMENT ORDER HAS NOT BEEN PASSED WHEREAS ONLY A DRAFT ASS ESSMENT ORDER IS PASSED AND THE PRINCIPLE OF ESTOPPEL UNDER SECTION 292BB W ILL NOT APPLY AND IN THOSE CIRCUMSTANCES THE RELIANCE BY THE DEPARTMENT UPON THE PROVISIONS OF 25 SECTION 292BB CANNOT BE RELIED UPON AND THE CLAIM F OR NOTICE UNDER SECTION 143(2) ADMITTING TO HAVE BEEN SERVED WITHIN THE STI PULATED TIME WILL NOT APPLY WHEREIN QUESTION FALLING CONSIDERATION WAS IN CONSEQUENCE TO THE PRAYER FOR OBTAINING NO OBJECTION CERTIFICATE FRO M THE INCOME TAX DEPARTMENT IN TERMS OF MASTER CIRCULAR NO.2/2008-09 DATED 01.07.2008 FOR BEING SUBMITTED TO THE RESERVE BANK OF INDIA AND IN ACCORDANCE WITH THE FACT IN PARA 6 THERE WERE INITIATION OF REASSESSMENT PR OCEEDINGS. THUS IN CONSEQUENCE THE HONBLE COURTS ALLOWED THE PETITIO N QUASHING THE REASSESSMENT PROCEEDINGS WITH A DIRECTION IN THE WR IT OF MANDAMUS TO ISSUE THAT NO OBJECTION CERTIFICATE AS PRAYED FOR WHICH RELEVANT FINDINGS ARE EXTRACTED HEREINBELOW: ACCORDINGLY THE WRIT PETITION IS ALLOWED AND A WR IT CERTIORARI IS ISSUED QUASHING THE ASSESSMENT PROCEEDINGS PURSUAN T TO THE NOTICES UNDER SECTION 148 OF THE ACT. A WRIT OF MANDAMUS I S ISSUED TO THE RESPONDENTS TO ISSUE NO OBJECTION CERTIFICATE TO THE PETITIONER AS PER THE NEEDS AND REQUIREMENTS OF THE RESERVE BANK OF INDIA. THE NO OBJECTION CERTIFICATE WILL BE ISSUED WITHIN 6 WEEK S FROM TODAY. THERE WILL BE NO ORDER AS TO COSTS. 15. WE MAY REFER TO THE JUDGMENT OF HONBLE JURISDI CTIONAL HIGH COURT OF PUNJAB & HARYANA WHICH IS BINDING IN NATURE TITLED AS CIT VS RAM NARAIN BANSAL REPORTED IN ITA NO.814 OF 2010 DATED 13 TH JULY 213 REPORTED IN 202 TAXMAN 213 (PLACED ON RECORD) PERTAINING TO ASSESSM ENT YEAR 2002-03 26 WHEREIN THE QUESTION FALLING CONSIDERATION IS THE S AME AS RAISED BEFORE THIS BENCH IN THE PRESENT APPEAL WHICH IS EXTRACTED HER EINBELOW: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE TRIBUNAL WAS RIGHT IN LAW IN CONCURRI NG WITH THE FINDING OF CIT (A) IN HOLDING THE ASSESSMENT BAD IN LAW MADE PURSUANT TO THE ISSUE OF NOTICE U/S 148 WITHOU T APPRECIATING THAT NO PREJUDICE WAS CAUSED TO THE ASSESSEE BY NON-ISS UANCE OF NOTICE U/S 143(2) PARTICULARLY W HEN THE ASSESSEE WAS PARTICIPATING IN THE ASSESSMENT PROCEEDING WITHOUT OBJECTING TO THE ASSESSMENT PROCEEDIN GS ON THIS ACCOUNT AT THE ASSESSMENT STAGE? 16. THE HONBLE HIGH COURT NOTICING THE PROVISIONS OF LAW HAS ANSWERED THE QUESTION AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE WITH THE DIRECTION OF REMANDING THE MATTER TO THE TRIBUNAL F OR DECISION ON MERIT AFRESH IN ACCORDANCE WITH LAW. THE RELEVANT PORTION OF THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAM NARAIN BANSAL (SUPRA) IS REPRODUCED HEREINBELOW FOR THE S AKE OF CONVENIENCE AS UNDER: 9. LEARNED COUNSEL FOR THE REVENUE SUBMITTED T HAT NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE AS SESSEE WHICH WAS DULY SERVED. IN PURSUANCE TO THE SAID NOTICE THE ASSESSEE APPEARED BEFORE THE ASSESSING AUTHORITY AND PARTICIPATED IN THE RE-ASSESSMENT PROCEEDINGS ON 30.11.2007 6.12.2007 12.1 2.2007 13.12.2007 18.12.2007 24.12.2007 27.12.2007 28.12.200 7 AND 31.12.2007 AND ALSO CROSS-EXAMINED THE WITNESSES WHO WERE SUMMONED AND THEIR STATEMENTS WERE RECORDED. THE COUNSEL DRE W SUPPORT FROM A JUDGMENT OF THE KERALA HIGH COURT IN K.J. THOMA S VS. CIT (2008) 301 ITR 301 TO SUBMIT THAT NON-SERVICE OF NOTICE UNDER SECTION 143 27 (2) OF THE ACT WAS NOT FATAL TO RE -ASSESSMENT PROCEEDINGS. REFERENCE WAS MADE TO SECTION 292 OF THE ACT AND A CCORDING TO THE COUNSEL THE SAID PROVISIONS WERE A PPLICABLE TO ALL PENDING PROCEEDINGS. RELIANCE WAS ALSO PLACED ON A JUDGMENT OF THIS COURT IN COMMISSIONER OF INCOME TAX BATHINDA V. M/S PANCHVATI MOTORS (P) LTD. (ITA 292 OF 2008) DECID ED ON 3.5.2011. 10. WE FIND CONSIDERABLE FORCE I N THE SUBMISSION OF THE LEARNED COUNSEL. THE KERALA HIGH COURT IN K.J.THOMASS CASE (SUPRA) WHILE CONSIDERING SIMILAR ISSUE HAD HELD AS UNDER: THE PROCEDURE UNDER S. 143(2) OF THE ACT IS TO ENSURE THAT AN ADVERSE ORDER IS IS SUED ONLY AFTER PROPER OPPORTUNITY IS GIVEN TO THE ASSESSEE. IN T HIS CASE IT IS CONCEDED THAT THE ASSESSEE GOT OPPORT UNITY TO FILE REPLY AND DETAILED REPLY WAS IN FACT FILED AND REASSESSMENT NOTICE AND FINAL ORDER WERE ALSO ISS UED WITHIN THE TIME- LIMIT PRESCRIBED UNDER THE ACT. 11. FURTHER THIS COURT IN M/S PANCH WATI MOTOR (P) LTD.S CASE (SUPRA) WHILE EXAMINING THE SCOPE OF SECTION 292 BBOF THE ACT AND ITS APPLICABILITY HAD NOTED AS UNDER: SECTION 292BB OF THE ACT WAS INSERT ED BY FINANCE ACT 2008 W.E.F. 1.4.2008. IT READS THUS:- 292BB: WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO-OPERATED IN ANY I NQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THE ACT WHIC H IS REQUIRED TO BE SERVED UPON HIM HAS BEEN DULY SERVED U PON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT A ND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDING OR INQUIRY UNDER THIS ACT THAT THE NOTICE WA S A) NOT SERVED UPON HIM; OR B) NOT SERVED UPON HIM IN TI ME; OR C) SERVED UPON HIM IN AN IMP ROPER MANNER. 28 PROVIDED THAT NOTHING CONTAINE D IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. A PRESUMPTION HAS BEEN R AISED UNDER THE SAID PROVISION RELATING TO SERVICE OF NOTI CE UPON THE ASSESSEE IN RESPECT OF ASSESSMENT OR REASSES SMENT PROCEEDINGS. ACCORDING TO THIS PROVISION WHERE AN ASSESSEE APPEARS IN ANY PROCEEDINGS OR COOPERATES IN ANY ENQUIRY RELATING TO ASSESSMENT OR REASSESSMENT PROC EEDINGS IT SHALL BE PRESUMED THAT THE ASSESSEE HAS BEEN VALIDLY SERVED AND IT SHALL NOT BE OPEN TO THE ASSE SSEE TO OBJECT THAT THE NOTICE WAS NOT SERVED UPON HIM OR WA S NOT SERVED IN TIME OR WAS SERVED UPON HIM IN AN IMPROPER MANNER. HOWEVER AN EXCEPTION TO THE AFORESA ID PRESUMPTION HAS BEEN MADE IN A CASE WHERE SUCH OBJECTION HAS BEEN RAISED BEFORE COMPLETION OF ASSESSMENT OR REASSESSMENT. THE PROVISION HAS BEEN MADE EFFECTIVE FROM 1.4.2008 AND THEREFORE SHAL L APPLY TO ALL PENDING PROCEEDINGS. THE CENTRAL BOARD OF DIRECT TAXES ISSUED THE CIRCULAR NO.1 OF 2009 DATED 27 MARCH 2009 (2009) 310 ITR (ST.) 42 GIVING EXPLANATORY NOTES ON THE PROVISIONS RELATING TO DIRECT TAXES CONTAINED IN FINANCE ACT 2008. CLAUSE 42.7 (AT PAGE 86 OF THE REPO RT) IS RELEVANT WHICH RELATES TO APPLICABILITY OF THIS PRO VISION AND READS THUS: 42.7 APPLICABILITY THIS AMENDMENT HAS BEEN MADE APPLICABLE WI TH EFFECT FROM 1ST APRIL 2008. THIS MEANS THAT THE P ROVISION OF NEW-SECTION 292 SHALL APPLY IN ALL PROCEEDINGS WHICH ARE PENDING ON 1ST APRIL 2008. 29 12. IT IS NOT DISPUTED THAT THE ASSESSEE HAD APPEARED BEFORE THE ASSESSING OFFICER ON VARIOUS DATES AND P ARTICIPATED IN THE RE- ASSESSMENT PROCEEDINGS BEFORE THE FINALIZATIO N AND NO OBJECTION REGARDING ISSUANCE AND SERVICE OF NOTICE UNDER SEC TION 143(2) OF THE ACT WAS RAISED BEFORE THE ASSESSING OFFICER. THE CIT(A) AND THE TRIBUNAL WERE THUS IN ERROR IN NULLI FYING THE RE-ASSESSMENT PROCEEDINGS AND DECLARING THE RE-ASSESSMENT ORDER TO BE INVALID. 13. IN VIEW OF THE ABOVE THE SUBSTANTI AL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. CONSEQUENTLY THE MATTER IS REMANDED TO THE TRI BUNAL FOR DECISION AFRESH ON MERITS IN ACCORDANCE WITH LAW. 17. THUS UNDER THE AFORESAID FACTS AND CIRCUMSTANC ES AND THE DECISION OF THE HONBLE COURT RESTORED THE MATTER TO THE TRIBU NAL AND WE ARE BOUND TO FOLLOW THE DECISION OF THE JURISDICTIONAL HIGH COUR T OF PUNJAB & HARYANA WHICH IS DIRECTLY ON THE QUESTION INVOLVED IN THE P RESENT CASE AND THE DECISIONS AS RELIED UPON BY THE LD. COUNSEL WHICH A RE NOT DIRECTLY ON THE ISSUE DOES NOT SUPPORT THE CASE OF THE ASSESSEE AND LIKE WISE THE DECISION OF CHENNAI BENCH OF TRIBUNAL RELIED UPON BY THE LD. AR CANNOT PREVAIL ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAM NARAIN BANSAL (SUPRA). IN VIEW OF THE MATTER AND O UR FINDINGS HEREINABOVE THE MATTER IS SET ASIDE TO THE FILE OF THE A.O. WHO IS DIRECTED TO ISSUE NOTICE U/S 143(2) OF THE ACT TO THE ASSESSEE FOR A DECISIO N IN ACCORDANCE WITH LAW. THUS GROUNDS RAISED BY THE REVENUE ARE ALLOWED FO R STATISTICAL PURPOSES. 30 18. IN THE RESULT THE APPEAL FILED BY THE REVENUE IN ITA NO.184(ASR)/2013 IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 16TH JULY 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16TH JULY 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SMT. PROMILA GUPTA DISTT. RAMBAN ( J & K) 2. THE ITO UDHAMPUR. 3. THE CIT(A) JAMMU. 4. THE CIT JAMMU 5. THE SR DR ITAT AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.