RAJASTHAN TELEMATICS LIMITED, Kota v. ACIT, Kota

ITA 352/JPR/2011 | 2002-2003
Pronouncement Date: 04-11-2011 | Result: Dismissed

Appeal Details

RSA Number 35223114 RSA 2011
Bench Jaipur
Appeal Number ITA 352/JPR/2011
Duration Of Justice 6 month(s) 14 day(s)
Appellant RAJASTHAN TELEMATICS LIMITED, Kota
Respondent ACIT, Kota
Appeal Type Income Tax Appeal
Pronouncement Date 04-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-11-2011
Date Of Final Hearing 13-10-2011
Next Hearing Date 13-10-2011
Assessment Year 2002-2003
Appeal Filed On 20-04-2011
Judgment Text
1 ITA 352(2)-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 352 & 353/JP/2011 ASSTT. YEAR : 2002-03 & 04-05. RAJASTHAN TELEMATICS LTD. VS. THE ACIT CIRCLE- 1 G-247 ROAD NO. 5 INDRAPRASTHA KOTA. INDUSTRIAL AREA KOTA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARESH GUPTA RESPONDENT BY : SHRI D.K. MEENA DATE OF HEARING : 13.10.2011 DATE OF PRONOUNCEMENT : 04.11.2011 ORDER DATED : 04/11/2011. PER R.K. GUPTA J.M. THESE ARE TWO APPEALS BY THE ASSESSEE AGAINST THE ORDERS OF LD. CIT (A) RELATING TO ASSESSMENT YEARS 2002-03 AND 2. WE TAKE UP FIRST APPEAL FOR ASSESSMENT YEAR 2002 -03. EIGHT GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE ASSESSEE WHILE FILING THE AP PEAL HERE BEFORE THE TRIBUNAL. 3. THE LD. COUNSEL OF THE ASSESSEE STATED THAT GROU ND NOS. 6 7 AND 8 ARE GENERAL IN NATURE WHICH DO NOT REQUIRE ANY ADJUDICATION UPON. 4. GROUND NO. 1 IS AGAINST UPHOLDING REOPENING OF T HE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 BY THE AO. 2 5. BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOM E WAS FILED ON 31.10.2002 DECLARING TOTAL INCOME OF RS. 3 52 909/- UNDER SECTION 28 AND RS. 46 79 283/- UNDER SECTION 115 JB. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 14 3(1) ON 17.2.2003. THEREAFTER THE AO NOTICED THAT AS PER CERTIFICATE DATED 1.6.2002 I SSUED BY ASSESSEE COMPANY THE PAYMENT OF RS. 1 50 000/- WAS MADE ON 30.3.2002 TO M/S. PARAS RAM JHAMNANI MANAGING DIRECTOR AS PART PAYMENT OF HIS SALARY OF ASSESSMENT YEAR 2001-02 IN CASH. SINCE THE PAYMENT OF SALARY HAS BEEN MADE IN CASH E XCEEDING RS. 20 000/- THEREFORE 20% EXPENSES WERE DISALLOWABLE AS PER PROVISIONS OF SECTION 40A(3) OF THE IT ACT BUT ASSESSEE HAS NOT ADDED THIS AMOUNT OF DISALLOWANCE IN ITS COMPUTATION OF INCOME. ACCORDINGLY THE AO OBSERVED THAT INCOME HAS ESCAPE D ASSESSMENT THEREFORE HE RECORDED THE REASONS ON 6.12.2005 AND ACCORDINGLY A NOTICE UNDER SECTION 148 WAS ISSUED ON 6.12.2005. COPY OF REASONS RECORDED IS PLACED AT PAGE 19 AND COPY OF NOTICE UNDER SECTION 148 IS PLACED AT PAGE 20 OF THE PAPER BOOK. IN COMPLIANCE TO THIS NOTICE A LETTER WAS FILED BY ASSESSEE ON 10.2.2006 STATING THAT RET URN FILED EARLIER I.E. ON 31.10.2002 MAY BE TREATED AS RETURN IN COMPLIANCE TO NOTICE UNDER SECTION 148. THEREAFTER NOTICE UNDER SECTION 143(2) WAS ISSUED ON 24.2.2006 AND 8.3.2006 WHICH WERE DULY SERVED. THE LD. COUNSEL OF THE ASSESSEE ALONG WITH THE MANAGER ACCO UNTS OF THE ASSESSEE WERE PRESENT BEFORE AO FROM TIME TO TIME. EXPLANATION IN RESPEC T OF PAYMENT OF RS. 1 50 000/- MADE IN CASH ON 30.3.2002 WAS SOUGHT AND IT WAS SUBMITTE D THAT DURING THE YEAR S. 1 50 000/- WAS PAID TO MR. PAR ASRAM JHAMNANI MANAGING DIRECTOR OF THE COMPANY IN CASH AT VARIOUS DATES DURING THE YEAR THE ACCOUNT WHERE OF HAS BEEN SUBMITTED TO YOU. SO FAR AS THE CERTIFICATE S HOWN TO US DURING THE COURSE OF HEARING ISSUED BY US IS CONCER NED IS WAS A TYPING ERROR IN WHICH IT WAS MENTIONED THAT R S. 3 1 50 000/- WAS PAID ON 31.3.2002 INSTEAD OF MENTION ING UPTO 31.03.2002. WE REGRET FOR THE SAME. AS PER B OOKS OF A/C OF THE COMPANY THE PAYMENTS WERE MADE ON VARIOU S DATES UPTO 31.3.2002 TOTALING RS. 1 50 000/-. WE RE QUEST YOU TO CONSIDER THE LEDGER AS CORRECT. THE CONTENTION OF THE ASSESSEE WAS NOT FOUND SATISF ACTORY BY THE AO AS IN THE CERTIFICATE IT WAS MENTIONED - THIS IS TO CERTIFY THAT MR. PARAS RAM JHAMNANI WA S PAID RS. 1 50 000/- ON 30.3.02 AS PART PAYMENT OF HIS SA LARY OF YEAR 2001-02 IN CASH AND RS. 5 00 000/- ON 10.04.02 TOWARDS ADVANCE SALARY FOR THE YEAR 2002-03 IN CASH . THEREAFTER THE AO OBSERVED THAT AS PER BOOKS OF ACC OUNT PRODUCED THE PAYMENTS HAVE BEEN SHOWN ON VARIOUS DATES. BOOKS OF ACCOUNT HAVE BEEN MAINTAINED ON COMPUTER AND POSSIBILITY OF INTERPOLATION AND EXTRAPOLATION IN C OMPUTERIZED BOOKS CANNOT BE RULED OUT AND THEREFORE THE CERTIFICATE ISSUED BY COMPANY I TSELF CANNOT BE REJECTED AS SUCH. ACCORDINGLY HE MADE AN ADDITION OF RS. 30 000/- @ 2 0% OF SUCH CASH PAYMENT OF RS. 1 50 000/- UNDER SECTION 40A(3). 5.1. THE AO FURTHER FOUND THAT ASSESSEE HAS SHOWN V ARIOUS OUTSTANDING GOVERNMENT DUES AT THE END OF THE YEAR OUT OF WHICH EVIDENCE O F PAYMENTS BEFORE DUE DATE OF FILING THE RETURN WAS NOT PRODUCED IN RESPECT OF SALES-TA X DEDUCTED AT SOURCE OF RS. 14 618/- AND CST/RST AND SURCHARGE RS. 61 042. SINCE THESE GOVE RNMENT DUES OF RS. 75 660/- HAVE NOT BEEN PAID BEFORE DUE DATE THEREFORE THESE WER E ADDED IN THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF INCOME TAX ACT. 5.2. THE AO FURTHER NOTICED THAT ASSESSEE HAS CLAIM ED STAFF TRAINING EXPENSES OF RS. 12 63 805/- WHICH INCLUDES FOREIGN TRAVELING EXPENS ES OF RS. 11 71 264/-. THE AO 4 FURTHER MENTIONED IN HIS ORDER THAT A/R GAVE JUSTIF ICATION THAT COMPANY HAS INCURRED THESE EXPENSES ON THE STAFF OF THE COMPANY FOR THEIR IMPR OVEMENT OF SKILLS WHICH WAS TO USE FOR BETTERMENT OF THE COMPANY. ON PERUSAL OF THE DETAI LS AND VOUCHERS OF FOREIGN TRAVEL EXPENSES IT WAS FOUND THAT FOREIGN TRAVEL EXPENSES ARE MAINLY RELATED TO STUDY OF SON OF DIRECTOR IN FOREIGN UNIVERSITY AND FROM THE DETAILS IT EMERGES THAT INSTEAD OF TRAINING THE EXPENDITURE WAS FOR STUDY IN UNIVERSITY ABROAD. AC CORDINGLY IT WAS HELD THAT THESE EXPENSES ARE TREATED AS NON BUSINESS EXPENDITURE HE NCE THE AO DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 5.3. CERTAIN ADDITIONS WERE MADE I.E. ON ACCOUNT OF USER OF TELEPHONE EXPENSES ON ACCOUNT OF BUSINESS PROMOTION EXPENSES AND ON ACCOU NT OF PROVISION FOR GRATUITY. 6. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) BE FORE WHOM THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITION ON MERIT WERE CHALLE NGED. REOPENING OF THE ASSESSMENT WAS CHALLENGED BEFORE LD. CIT (A) BY FILING AN ADDI TIONAL GROUND. 7. IN THIS RESPECT DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT (A). RELIANCE WAS PLACED ON VARIOUS CASE LAWS MENTIONED IN THE ORDER OF LD. CIT (A) AT PAGE 5. HOWEVER THE DETAILED ARGUMENTS ADVANCED BY LD. A/R WERE FOU ND NOT ACCEPTABLE BY THE LD. CIT (A) AS IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. 291 ITR 500 (SC) WHEREIN IT IS H ELD THAT PRIMA FACIE ADJUSTMENT UNDER SECTION 143(1) IS NO ASSESSMENT AND IF ANY INCOME H AS ESCAPED THE AO WAS RIGHT IN REOPENING THE ASSESSMENT. DETAILED FINDINGS GIVEN BY HONBLE SUPREME COURT HAVE ALSO BEEN MENTIONED IN THE ORDER OF LD. CIT (A) AT PAGES 6 & 7. ACCORDINGLY THE LEGAL GROUND RAISED BEFORE LD. CIT (A) WAS REJECTED. 5 8. ON MERIT THE DISALLOWANCE OF RS. 30 000/- UNDER SECTION 40A(3) DISALLOWANCE OF RS. 75 660/- UNDER SECTION 43B AND DISALLOWANCE OF STAFF TRAINING EXPENSES AMOUNTING TO RS. 11 71 264/- WERE CONFIRMED BY LD. CIT (A) AFTER REJECTING THE DETAIL SUBMISSIONS FILED BEFORE HIM. HOWEVER OTHER ADDITIONS MADE BY AO WE RE DELETED BY LD. CIT (A). 9. NOW ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUN AL BY WHICH THE ASSESSEE HAS CHALLENGED THE UPHOLDING THE REOPENING OF THE ASSES SMENT AND HAS ALSO CHALLENGED THE ADDITION SUSTAINED BY LD. CIT (A). 10. IN RESPECT TO REOPENING OF THE ASSESSMENT THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE WAS NO FRESH MATERIAL FOUND BY THE AO FOR WHICH HE FORMED AN OPINION THAT ANY INCOME HAS ESCAPED. ALL THE RELEV ANT DETAILS IN RESPECT TO CASH PAYMENTS ETC. WERE FILED ALONG WITH RETURN OF INCOME. THEREF ORE THERE WAS NO REASON TO BELIEVE THAT ANY INCOME HAS ESCAPED. THE RETURN OF INCOME HAS BE EN PROCESSED UNDER SECTION 143(1). THEREFORE THE AO WAS NOT JUSTIFIED IN INITIATING P ROCEEDINGS UNDER SECTION 147/148 AND LD. CIT (A) WAS ALSO NOT JUSTIFIED IN CONFIRMING TH E ORDER OF AO ON THIS ISSUE. RELIANCE WAS PLACED ON DECISION REPORTED IN 213 CTR 193 (RAJ .). 11. ON THE OTHER HAND LD. D/R STRONGLY PLACED RELI ANCE ON THE ORDERS OF AUTHORITIES BELOW. 12. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD WE FIND THAT AO WAS CORRECT IN INITIATING PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. UNDISPUTED FACTS ARE THAT RETURN DECLARING INCOME W AS FILED AND THE SAME WAS PROCESSED UNDER SECTION 143(1). THEREAFTER ON EXAMINING THE ASSESSMENT RECORD THE AO NOTICED THAT THERE IS A CERTIFICATE ALONG WITH THE RETURN O F INCOME AND AS PER THAT CERTIFICATE THE PAYMENT OF RS. 1 50 000/- WAS MADE IN CASH ON 30.3. 2002 AND AS PER PROVISIONS OF 6 SECTION 40A(3) DISALLOWANCE @ 20% HAS TO BE MADE ON ACCOUNT OF ANY EXPENDITURE INCURRED IN CASH ABOVE RS. 20 000/- OTHERWISE BY WA Y OF AN ACCOUNT PAYEE CHEQUE. NOTICE UNDER SECTION 148 WAS ISSUED AFTER RECORDING REASON S AND THAT WAS ALSO ISSUED AFTER EXPIRY OF TIME LIMIT FOR ISSUING NOTICE UNDER SECTION 143( 2). 12.1. THE RETURN WAS FILED ON 31.10.2002 WHEREAS NO TICE UNDER SECTION 148 WAS ISSUED ON 6.12.2005. AMENDED PROVISIONS OF SECTION 147 AR E VERY CLEAR BY WHICH IT HAS BEEN PROVIDED THAT IF ANY INCOME HAS ESCAPED ASSESSMENT THE AO SHALL ISSUE NOTICE UNDER SECTION 148. IN VIEW OF THE AO THE INCOME HAS ESCA PED ASSESSMENT AND THEREFORE HE ISSUED NOTICE UNDER SECTION 148 AFTER RECORDING REA SONS. THE HONBLE SUPREME COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUP RA) HAS CLEARLY HELD THAT IF BY ANY REASON WHILE PROCESSING RETURN UNDER SECTION 143(1) AN INCOME HAS ESCAPED THEN THE AO WAS WITHIN HIS JURISDICTION TO ISSUE NOTICE UNDER S ECTION 148. SIMILAR FACTS ARE INVOLVED IN THE PRESENT CASE ALSO. THEREFORE WE HOLD THAT LD. AO WAS JUSTIFIED IN ISSUING NOTICE UNDER SECTION 148. 12.2. IN THE CASE OF BAJRANG LAL FOOL CHAND THE HO NBLE SUPREME COURT HAS HELD THAT IF THE AO WAS OF THE VIEW THAT ANY INCOME HAS ESCAP ED ASSESSMENT THEN HE IS WITHIN HIS JURISDICTION TO ISSUE NOTICE UNDER SECTION 148. IT HAS BEEN FURTHER OBSERVED IN THE JUDGMENT THAT IT IS ANOTHER CASE THAT INCOME FOUND ESCAPED ASSESSMENT MAY NOT BE ASSESSABLE THEN ON MERIT THAT PART OF INCOME MAY NO T BE ADDED BY AO CANNOT BE HELD FAULTED IN ISSUING NOTICE UNDER SECTION 148. 12.3. WE HAVE ALSO CONSIDERED THE DECISION RELIED U PON BY LD. A/R IN THE CASE OF CIT VS. MANOHAR LAL GUPTA 213 CTR 193 (RAJ.) AND WE FI ND THAT THE RATIO OF THIS DECISION IS NOT APPLICABLE FOR THE REASON THAT THIS DECISION RE LATES TO ASSESSMENT YEAR 1981-82. AFTER 7 THIS ASSESSMENT YEAR THE PROVISIONS OF SECTION 147 HAS BEEN AMENDED BY FINANCE ACT 1989. THEREFORE PROVISIONS OF SECTION 147 HAS BEEN ADDED WHEREBY IT HAS BEEN PROVIDED THAT IF ANY INCOME HAS ESCAPED ASSESSMENT THEN AO I S FREE TO ISSUE NOTICE UNDER SECTION 148 IF TIME LIMIT PERMITS. IN THE PRESENT CASE NO TICE UNDER SECTION 148 HAS BEEN ISSUED WITHIN THE TIME LIMIT PRESCRIBED UNDER THE LAW AND THERE IS NO DISPUTE IN THIS REGARD. THEREFORE WITH UTMOST RESPECT TO THE DECISION OF H ONBLE RAJASTHAN HIGH COURT (SUPRA) WE HOLD THAT THE DECISION OF HONBLE SUPREME COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) IS APPLICABLE AND THE AO WAS RIGHT IN INITIATING PROCEEDINGS UNDER SECTION 147/148. ACCORDINGLY WE CONFIRM THE FINDINGS OF LD. CIT (A) WHO HAS GIVEN THE FINDINGS AFTER CONSIDERING THE DECISION O F HONBLE APEX COURT IN CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA). 13. IN GROUND NO. 2 THE ASSESSEE HAS OBJECTED THAT LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMING THE ASSESSMENT UNDER SECTION 147/143(3) INSTEAD OF PASSING ASSESSMENT UNDER SECTION 147/144 IRRESPECTIVE OF THE FACT THAT ASSES SEE HAS NOT FILED THE RETURN OF INCOME WITHIN TIME IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. 14. IN THIS REGARD THE LD. COUNSEL OF THE ASSESSEE HAS ARGUED THAT NOTICE UNDER SECTION 148 WAS ISSUED ON 6.12.2005 AND IN COMPLIANCE TO TH IS NOTICE A LETTER WAS FILED ON 10.2.2006 STATING THAT RETURN FILED EARLIER I.E. 31 .10.2002 MAY BE TREATED AS RETURN IN COMPLIANCE TO NOTICE UNDER SECTION 148. IT WAS EXP LAINED THAT SINCE THE LETTER WAS FILED AFTER 30 DAYS OF THE NOTICE RECEIVED THEREFORE TH E RETURN IS NOT FILED IN VIEW OF PROVISIONS OF SECTION OF SECTION 139(1). ACCORDINGLY THE AO S HOULD HAVE PASSED ORDER UNDER SECTION 147/144 INSTEAD OF PASSING ASSESSMENT UNDER SECTION 147/143(3). 8 15. ON THE OTHER HAND THE LD. D/R HAS STATED THAT AO HAS PASSED ASSESSMENT IN VIEW OF PROVISIONS OF LAW. 16. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD FIRST WE WOULD LIKE TO MENTION HERE THAT NO SUCH GROUND WAS TAKEN BEFORE LD. CIT (A) AS BEFORE LD. CIT (A) AN ADDITIONAL GROUND WAS TAKEN THAT AO HAS GROSSLY ERRED IN CONSIDERING THE CASE OF ESCAPED INCOME INITIATING PROCEEDINGS UNDER SEC TION 147/148 OF THE ACT AND MAKING ASSESSMENT UNDER SECTION 147/143(3) OF THE ACT AND COMPLETING THE REASSESSMENT PROCEEDINGS. THEREFORE IT IS WRONG TO MENTION THA T LD. CIT (A) WAS WRONG IN CONFIRMING THE ASSESSMENT UNDER SECTION 147/143(3) INSTEAD OF UNDER SECTION 147/144. 16.1. HOWEVER WE NOTED THAT IN CASE OF PROCEEDINGS INITIATED UNDER SECTION 148 THE PROVISIONS OF SECTION 139 WILL BE APPLICABLE AND AS PER SECTION 139 THE RETURN CAN BE FILED WITHIN THE PRESCRIBED TIME LIMIT OR EVEN AFTER THE PRESCRIBED LIMIT UNDER SECTION 139(4). IF THE CONTENTION OF THE ASSESSEE IS TAKEN THAT LETTER DATED 10.2.2006 WAS FILED AFTER 30 DAYS TIME PRESCRIBED UNDER SECTION 148 THEN THIS RETURN IS NOT FILED UNDER SECTION 139(1) BUT THIS HAS TO BE TREATED AS FILED UNDER SECTION 139(4 ) OF THE ACT. THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE WAS THAT IN CASE OF RETURN FILED LATE NOTICE UNDER SECTION 142(1) SHOULD HAVE BEEN ISSUED AND IF THERE WAS NO RETURN THEN THE ASSESSMENT SHOULD HAVE BEEN COMPLETED UNDER SECTION 144 AND NOT UNDER SECTION 1 43(3). WE ARE NOT IN AGREEMENT WITH THE CONTENTION OF THE LD. A/R BECAUSE THE AO ISSUED NOTICE UNDER SECTION 143(2) TWICE I.E. ON 24.2.2006 AND THEN ON 8.3.2006 AND THEN LD. COUN SEL OF THE ASSESSEE ALONG WITH MANAGER ACCOUNTS WERE APPEARED BEFORE HIM AND FILED DETAILS AS REQUIRED BY THE AO. THEREFORE THIS IS NOT A CASE THAT NO OPPORTUNITY W AS GIVEN TO THE ASSESSEE BEFORE COMPLETING ASSESSMENT. THERE WAS NO NEED TO ISSUE NOTICE UNDER SECTION 142(1) AS 9 ASSESSEE HAD FILED LETTER DATED 10.2.2006 SAYING TH AT THE RETURN FILED ORIGINALLY MAY BE TREATED RETURN FILED IN RESPONSE TO NOTICE UNDER SE CTION 148. THEREFORE IN OUR CONSIDERED VIEW THE ARGUMENTS OF LD. COUNSEL OF THE ASSESSEE A RE WITHOUT ANY MERIT AND THEREFORE THEY ARE LIABLE TO BE REJECTED. PROPER OPPORTUNITY HAS ALREADY BEEN GIVEN BY THE AO BEFORE COMPLETING THE ASSESSMENT AND THE REQUIREMEN T OF LAW IS THAT THE ASSESSEE SHOULD BE ALLOWED PROPER OPPORTUNITY BEFORE COMPLETING THE ASSESSMENT. AS STATED ABOVE THE OPPORTUNITY HAS ALREADY BEEN GIVEN AND THEY HAVE BE EN AVAILED ALSO. THEREFORE IN OUR CONSIDERED VIEW THE AO HAS FRAMED ASSESSMENT IN AC CORDANCE WITH THE PROVISIONS OF LAW. ACCORDINGLY THIS GROUND OF THE ASSESSEE IS DIS MISSED. 17. GROUND NO. 3 RELATES TO CONFIRMING THE DISALLOW ANCE OF RS. 30 000/- BEING 20% OF RS. 1 50 000/-. 18. THE CONTENTION RAISED BEFORE AUTHORITIES BELOW WERE REITERATED HERE BEFORE THE TRIBUNAL. IT WAS ALSO SUBMITTED THAT COPY OF LEDGE R ACCOUNT WAS FILED BEFORE AO AND HAS BEEN MENTIONED IN THE ORDER OF AO. THEREFORE THE ADDITION MADE AND SUSTAINED IS NOT JUSTIFIED. IT WAS ALSO SUBMITTED THAT PAYMENT MADE TO THE MANAGING DIRECTOR IS IDENTIFIED PERSON AND THE PAYMENT MADE IS FROM THE DISCLOSED S OURCES. THEREFORE FOR THIS REASON ALSO NO ADDITION IS TO BE MADE. 19. ON THE OTHER HAND THE LD. D/R PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 20. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A) WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). A SPECIFIC QUERY WAS R AISED BY THE BENCH THAT WHERE IS THE COPY OF LEDGER ACCOUNT FILED BEFORE THE AO. THE LD . A/R CATEGORICALLY ADMITTED THAT HE IS 10 NOT HAVING ANY COPY OF LEDGER ACCOUNT. HOWEVER THI S FACT IS MENTIONED IN THE ORDER OF THE AO. 21. AFTER CONSIDERING THIS ASPECT WE FIND THAT AO HAS SPECIFICALLY MENTIONED IN HIS ORDER THAT COPY OF LEDGER ACCOUNT FILED WAS COMPUTE RIZED AND THERE IS A POSSIBILITY OF INTERPOLATION AND EXTRAPOLATION IN COMPUTERIZED BOO K WHICH CANNOT BE RULED OUT. THEREFORE ASSESSEE WAS ASKED TO EXPLAIN THAT WHY I N THE CERTIFICATE IT HAS BEEN MENTIONED THIS PAYMENT WAS MADE ON 30.3.2002 IN CASH. THIS Q UERY COULD NOT BE EXPLAINED EITHER BEFORE AO OR BEFORE LD. CIT (A) AND HERE BEFORE THE TRIBUNAL. EVEN THE LD. A/R WAS NOT ABLE TO FILE THE COPY OF LEDGER ACCOUNT WHICH WAS F ILED BEFORE THE AO. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE HOLD THAT THE AO WAS CO RRECT IN MAKING DISALLOWANCE @ 20% OF RS. 1 50 000/- AND THE LD. CIT (A) WAS ALSO JUST IFIED IN CONFIRMING THE SAME. THIS GROUND OF THE ASSESSEE IS ALSO DISMISSED. 22. GROUND NO. 4 IS RELATED TO CONFIRMING THE DISAL LOWANCE OF RS. 75 660/- UNDER SECTION 43B. 23. IN THIS REGARD THE LD. COUNSEL OF THE ASSESSEE HAS STATED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR EXPLAINING THE DISALLOWAN CE. IT WAS ALSO SUBMITTED THAT EVEN THIS FIGURE WAS NOT MENTIONED IN THE REASONING RECORDED THEREFORE THE AO EXCEEDED BEYOND THE RECORDING OF REASONS. IT WAS FURTHER SUBMITTED THAT IN VIEW OF THE DECISION IN THE CASE OF JAY BHARAT MARUTI LTD. 324 ITR 289 (DEL.) THE AO HAS TO RECORD THE REASONS IN RESPECT TO ANY OTHER ITEM WHICH HE WANTS TO ADD BEF ORE COMPLETING THE ASSESSMENT. AT THIS POINT OF TIME IT WAS BROUGHT TO THE KNOWLEDGE OF THE LD. A/R THAT EXPLANATION-3 HAS BEEN ADDED IN SECTION 147 AND AS PER THIS EXPLANATI ON WHICH IS RETROSPECTIVE IN EFFECT HAS BEEN CLEARLY MENTIONED THAT AFTER REOPENING OF THE ASSESSMENT ON A POINT OF ISSUE THE AO 11 CAN EXAMINE OTHER ISSUES ALSO IF IN HIS VIEW THAT P OINT OF ISSUE IS ALSO LIABLE TO BE ADDED. IN RESPECT TO THIS QUERY NO ARGUMENT WERE ADVANCED BY LD. A/R BUT HAS STATED THAT THE DECISION OF HONBLE HIGH COURT IS APPLICABLE. IT W AS ALSO MENTIONED THAT EVEN NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE BEFORE DRAWIN G ANY ADVERSE INFERENCE BY THE AO. IT WAS ALSO SUBMITTED THAT COPY OF QUESTIONNAIRE WA S PLACED AT PAGE 45 AND NO SUCH QUERY WAS RAISED BY THE AO. 24. ON THE OTHER HAND THE LD. D/R STATED THAT DURI NG THE ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ALLOWED OPPORTUNITY AND THE AO HAS CLE ARLY MENTIONED IN HIS ORDER THAT PAYMENT PROOF HAS NOT BEEN PRODUCED. IT CLEARLY IN DICATES THAT THE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT EVE N BEFORE LD. CIT (A) OR EVEN HERE BEFORE THE TRIBUNAL NO RECEIPT HAS BEEN FILED. THEREFORE THE ADDITION HAS BEEN MADE AND SUSTAINED AS PER PROVISIONS OF LAW. 25. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERI AL ON RECORD WE FIND THAT AO WAS WITHIN HIS JURISDICTION TO CONSIDER THIS ISSUE ALSO . EXPLANATION 3 ADDED TO SECTION 147 BY FINANCE ACT 2009 WHICH WAS ADDED WITH RETROSPECTIV E EFFECT FROM 1.4.1989 READ AS UNDER :- EXPLANATION-3 - FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION THE ASSESSING OFFICER MAY ASSES S OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SECTION (2) OF SECTION 148. 12 25.1. THEREFORE AS PER EXPLANATION ADDED WITH RETR OSPECTIVE EFFECT IT IS CLEAR THAT AO MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF AN ISSUE WHICH CAME TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THI S SECTION. REOPENING OF THE ASSESSMENT WAS MADE EARLIER AND DURING THE ASSESSME NT PROCEEDINGS THIS ISSUE CAME TO THE NOTICE OF THE AO THAT ASSESSEE HAS NOT PRODUCED ANY RECEIPT IN RESPECT OF GOVERNMENT PAYMENTS THEREFORE AS PER PROVISIONS OF LAW HE MA DE ADDITION. THE LD. COUNSEL OF THE ASSESSEE WAS ALLOWED OPPORTUNITY TO FILE THE PAYMEN T PROOF. HOWEVER HE HAS STATED THAT HE HAS NO PAYMENT PROOF. THEREFORE IT IS CLEAR THA T PAYMENT HAS NOT BEEN MADE WITHIN THE STIPULATED TIME I.E. BEFORE FILING THE RETURN. THER EFORE IN OUR CONSIDERED VIEW THE AO WAS RIGHT IN MAKING THIS DISALLOWANCE. 25.2. RELIANCE HAS BEEN PLACED BY LD. A/R ON THE DE CISION IN THE CASE OF JAY BHARAT MARUTI LTD. 324 ITR 289 (DEL.). WE HAVE GONE THRO UGH THE DECISION IN CASE OF JAY BHARAT MARUTI LTD. (SUPRA) AND FOUND THAT THE FACT THAT THE PROVISIONS OF SECTION 147 WERE AMENDED WITH RETROSPECTIVE EFFECT HAVE NOT BEEN CON SIDERED AS WAS NOT BROUGHT TO THE NOTICE OF HONBLE DELHI HIGH COURT. THEREFORE WE HOLD THAT THIS DECISION OF HONBLE DELHI HIGH COURT IS DISTINGUISHABLE ON FACT AND TH EREFORE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE FOR THE SIMPLE REASON THAT LAW HAS BEEN AMENDED WITH RETROSPECTIVE EFFECT AND AS PER AMENDED LAW THE AO HAS MADE THIS DISALLO WANCE. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CIT (A) ON THIS ISSUE ALSO. 26. REMAINING GROUND NO. 5 IS AGAINST CONFIRMING TH E ADDITION OF RS. 11 71 264/- MADE ON ACCOUNT OF DISALLOWANCE OF STAFF TRAINING E XPENSES. 27. SIMILAR CONTENTIONS WERE MADE BY LEARNED. A/R A S WERE MADE WHILE ARGUING GROUND NO. 4 I.E. IN RESPECT TO DISALLOWANCE UNDER SECTION 43B. IT HAS BEEN STATED THAT NO 13 OPPORTUNITY WAS GIVEN TO THE ASSESSEE BEFORE MAKING THIS DISALLOWANCE AND THE AO COULD NOT HAVE PASSED ASSESSMENT UNDER SECTION 147/143(3) . 27.1. THESE ARGUMENTS HAVE ALREADY BEEN DISPOSED OF F WHILE DISPOSING EARLIER GROUND AND FROM THE ORDER OF THE AO IT IS CLEAR THAT THE A SSESSEE WAS REQUIRED TO FILE THE DETAILS AND THE LD. A/R OF THE ASSESSEE GAVE JUSTIFICATION THAT THE COMPANY HAS INCURRED THESE EXPENSES ON THE STAFF OF THE COMPANY FOR THEIR IMPR OVEMENT OF SKILLS WHICH WAS TO USE FOR BETTERMENT OF THE COMPANY. THEREFORE IT CANNOT BE SAID THAT NO OPPORTUNITY GIVEN BY THE AO BEFORE MAKING THIS ADDITION. HENCE THIS CONTENTI ON OF THE LD. A/R IS REJECTED. 28. REGARDING THE CONTENTION THAT IN THE REASONS RE CORDED THIS ITEM WAS NOT MENTIONED. THIS ISSUE WE HAVE ALREADY DEALT WITH W HILE DISPOSING GROUND NO. 4 IN CONNECTION WITH DISALLOWANCE MADE UNDER SECTION 43B AND WE HAVE REJECTED THIS CONTENTION ALSO. FOR THE SAME REASONING THIS CONTE NTION OF THE ASSESSEE IS ALSO REJECTED. 29. REGARDING THE ADDITION ON MERIT WE FIND THAT U NDISPUTEDLY THE EXPENDITURES WERE INCURRED ON ACCOUNT OF STUDY OF THE SON OF THE DIRE CTOR. THE ARGUMENT OF THE LD. COUNSEL IS THAT SALARY PAID TO SON OF THE DIRECTOR HAS BEEN ALLOWED AND THEREFORE EXPENSES INCURRED ON HIGHER STUDY WHICH WAS FOR THE PURPOSE OF COMMERCIAL EXPEDIENCY ARE ALSO ALLOWABLE IN OUR VIEW THESE ARE PERSONAL EXPENSES OF THE DIRECTOR AND THEREFORE THEY WERE NOT ALLOWABLE AND LD. CIT (A) WAS JUSTIFIED IN CONFIRMING THE ACTION OF THE AO THAT EXPENDITURE INCURRED FOR DOING MBA IN LONDON WAS PE RSONAL EXPENDITURE AND WERE NOT FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE COMPANY . THE LD. COUNSEL OF THE ASSESSEE COULD NOT HIGHLIGHT THAT HOW THESE EXPENSES ARE ALL OWABLE. THEREFORE WITHOUT GOING INTO DETAIL FURTHER WE HOLD THAT LD. CIT (A) WAS JUSTIF IED IN CONFIRMING THIS DISALLOWANCE ALSO. 30. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMIS SED. 14 31. NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO. 353/JP/2011. 32. THE ASSESSEE THROUGH GROUND NO. 1 IS OBJECTING IN SUSTAINING VALIDITY OF ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT THOUGH THE A O HAD TIME TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT THE WHOLE ASSESSMENT BEI NG VITIATED ARE LIABLE TO BE QUASHED. 33. THE BRIEF FACTS IN THIS REGARD ARE THAT ASSESSE E FILED RETURN ON 1.11.2004 DECLARING LOSS OF RS. 14 64 320/- UNDER SECTION 28 AND RS. 8 38 000/- UNDER SECTION 115 JB. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) ON 30.3.2005. ON PERUSAL OF DEPRECIATION CHART FILED ALONG WITH THE AUDIT REPOR T AND RETURN IT WAS FOUND THAT ASSESSEE HAD CLAIMED 40% DEPRECIATION ON MOTOR VEHICLE RUNNI NG ON HIRE. ASSESSEE HAS NOT SHOWN ANY INCOME FROM MOTOR VEHICLE RUNNING ON HIRE. THU S ASSESSEE HAS WRONGLY CLAIMED DEPRECIATION @ 40% INSTEAD OF 20% ALLOWABLE AS PER I.T. ACT. ACCORDINGLY NOTICE UNDER SECTION 148 WAS ISSUED ON 22.9.2005. IN COMPLIANCE TO NOTICE UNDER SECTION 148 ASSESSEE VIDE LETTER DATED 10.2.2006 STATED THAT RETURN FILE D EARLIER MAY BE TREATED FILED IN RESPONSE TO NOTICE UNDER SECTION 148. NOTICE UNDER SECTION 1 43(2) WAS ISSUED ON 24.2.2006 AND 8.3.2006 WHICH WERE DULY SERVED. THEREAFTER THE AS SESSMENT WAS COMPLETED AND AO MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECI ATION TELEPHONE EXPENSES BUSINESS PROMOTION EXPENSES ETC. ETC. AT RS. 6 38 851/-. TH E COMPUTATION OF TOTAL INCOME UNDER SECTION 115 JB WERE ALSO RECOMPUTED BY THE AO ON TH E BASIS OF DISALLOWANCE MADE WHILE COMPUTING INCOME UNDER SECTION 28. ASSESSEE PREFER RED APPEAL BEFORE LD. CIT (A). VARIOUS ADDITIONS WERE CHALLENGED BEFORE HIM. THE L D. CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE IN PART. 34. NOW ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBU NAL. 15 35. REGARDING GROUND NO. 1 AS STATED ABOVE IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THOUGH THE RETURN OF INCOME WAS PROCE SSED UNDER SECTION 143(1) HOWEVER TIME FOR ISSUING NOTICE UNDER SECTION 143(2) WAS NO T OVER AND THEREFORE ISSUANCE OF NOTICE UNDER SECTION 148 BEFORE EXPIRY OF TIME LIMI T FOR ISSUING NOTICE UNDER SECTION 143(2) IS BAD IN LAW. THEREFORE THE ASSESSMENT CO MPLETED BY THE AO HAS TO BE TREATED AS VOID ABINITIO. RELIANCE WAS PLACED ON VARIOUS CASE LAWS I.E. IN CASE OF CIT VS. TCP LTD. 323 ITR 346 IN CASE OF CIT VS. QATALYS SOFTWARE TE CHNOLOGIES LTD. 308 ITR 249 (MAD.) IN CASE OF CESC LTD. 263 ITR 402 (CAL.) AN D IN CASE OF SUPPER SPINNING MILLS LTD. 129 TTJ 305 (TM). 36. ON THE OTHER HAND THE LD. D/R STATED THAT THIS GROUND WAS NOT TAKEN EITHER BEFORE AO OR BEFORE LD. CIT (A). THEREFORE SHOULD NOT BE ADMITTED. IT WAS FURTHER SUBMITTED THAT IT IS THE CHOICE OF THE AO FOR ISSUING NOTICE UNDER SECTION 143(2) OR UNDER SECTION 148. THOUGH THERE WAS TIME FOR ISSUING NOTICE UNDE R SECTION 143(2) HOWEVER ON EXAMINATION OF RECORD THE AO NOTICED THAT ASSESSEE HAS CLAIMED WRONG CLAIM ON ACCOUNT OF DEPRECIATION. THEREFORE HE ISSUED NOTICE UNDER SECTION 148. ACCORDINGLY NOTICE ISSUED UNDER SECTION 148 IS CORRECT AND THEREAFTER COMPLET ION OF ASSESSMENT ON THE BASIS OF NOTICE UNDER SECTION 148 IS ALSO CORRECT. IT WAS A LSO SUBMITTED THAT IN RESPONSE TO NOTICE UNDER SECTION 148 THE ASSESSEE FILED RETURN OF INCO ME AND AO HAS ISSUED NOTICE UNDER SECTION 143(2) FOR COMPLETION OF ASSESSMENT. THERE FORE ORDER OF AO DOES NOT SUFFER FROM ANY INFIRMITY. 37. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. WE HAVE ALSO PERUSED VARIOUS CASE LAWS ON WHICH RELIANCE HAS BEE N PLACED BY LD. A/R. AFTER 16 CONSIDERING ALL THE RELEVANT MATERIAL WE FIND THAT ASSESSEE DESERVES TO SUCCEED ON THE LEGAL GROUND RAISED. 37.1. WE NOTED THAT ON IDENTICAL FACTS IN CASE OF M /S. SUPPER SPINNING MILLS LTD. 129 TTJ 305 (TM) THE ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE. 37.2. THE BRIEF FACTS IN CASE OF M/S. SUPPER SPINNI NG MILLS LTD. (SUPRA) WERE THAT THE RETURN OF INCOME WAS FILED ON 30 TH OCTOBER 2002 AND SAME WAS PROCESSED UNDER SECTION 143(1) ON 19 TH DECEMBER 2003. THEREAFTER ASSESSEE FILED A REVIS ED RETURN OF INCOME ON 23 RD MARCH 2004. THIS RETURN WAS ALSO PROCESSED UNDER SECTION 143(1). THE AO SUBSEQUENTLY NOTED THAT THE ASSESSEE HAD CLAIMED DE DUCTION UNDER SECTION 80HHC AMOUNTING TO RS. 122.22 LAKHS AND WHILE WORKING OUT THE SAME SALES TAX AND EXCISE DUTY WERE NOT INCLUDED IN THE TOTAL TURNOVER. APART FROM THIS THE AO FURTHER NOTICED THAT AN AMOUNT OF RS. 6.40 CRORES REPRESENTING MACHINERY PU RCHASED AS REPLACEMENT WAS CLAIMED AS REVENUE EXPENDITURE WHEREAS HE WAS OF THE VIEW THAT THE EXPENDITURE WAS CAPITAL IN NATURE. THE AO NOTICED THAT ASSESSEE HAS MADE EXCE SS CLAIM THEREFORE HE INITIATED PROCEEDINGS UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 TO THE ASSESSEE ON 9 TH JULY 2004. THEREAFTER THE ASSESSMENT WAS COMPLETE D ON 15 TH MARCH 2006. ASSESSEE PREFERRED APPEAL AND APPEAL OF THE ASSESSE E WAS ALSO REJECTED. 37.3. THE LD. CIT (A) REJECTED THE LEGAL GROUND TAK EN BEFORE HIM THAT TIME FOR ISSUING NOTICE UNDER SECTION 143(2) WAS NOT EXPIRED THEREF ORE INITIATION OF PROCEEDINGS UNDER SECTION 147/148 WAS BAD IN LAW . AGAINST THE FIND INGS OF LD. CIT (A) THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. THERE WAS DI FFERENCE AMONG THE MEMBERS OF THE TRIBUNAL AS LD. JUDICIAL MEMBER WAS IN AGREEMENT WI TH THE FINDINGS OF LD. CIT (A) WHEREAS LD. ACCOUNTANT MEMBER WAS IN AGREEMENT WITH THE CONTENTION OF THE ASSESSEE 17 THAT SINCE PERIOD OF ISSUING NOTICE UNDER SECTION 143(2) WAS NOT EXPIRED AND THEREFORE ISSUANCE OF NOTICE UNDER SECTION 148 WAS BAD IN LAW . THE QUESTION OF LAW WAS REFERRED TO THE THIRD MEMBER BY THE HONBLE PRESIDENT OF THE TR IBUNAL. THEREAFTER AFTER DISCUSSING THE ISSUE AT GREAT LENGTH THE LD. THIRD MEMBER WAS IN AGREEMENT WITH THE LD. ACCOUNTANT MEMBER. THE LD. THIRD MEMBER AFTER DISCUSSING VAR IOUS CASE LAWS AND OTHER MATERIAL HAS HELD AS UNDER :- THE DEPARTMENT WANTS TO INTERPRET THE EXPRESSION NO ASSESSMENT HAS BEEN MADE IN CL. (B) OF EXPLN. 2 TO S. 147 TO MEAN THAT IT ALSO INCLUDES SITUATION WHERE ASSESSMENT UN DER S. 143(3) IS STILL POSSIBLE BUT NOT YET MADE. IF THIS INTERPRETA TION IS TO BE ACCEPTED IT WILL SET AT NAUGHT THE FUNDAMENTAL PRI NCIPLES UNDERLYING S. 147 AND WHICH PRINCIPLES HAVE BEEN FO LLOWED TILL DATE. THESE PRINCIPLES ARE APPLICABLE EVEN TO THE E XTENDED MEANING GIVEN TO THE TERM ESCAPED ASSESSMENT IN THE AMEND ED PROVISION. THE ABOVE CLAUSE IS INTENDED TO COVER THE FOLLOWING TWO SITUATIONS : (1) WHERE A RETURN IS FILED AND NON-ACTION IS TAK EN EITHER UNDER S. 143(1) OR UNDER S. 143(3) AND THE TIME-LIMIT FOR IS SUING NOTICE UNDER S. 143(2) HAS EXPIRED; (II) WHERE A RETURN IS FILED AND IS PROCESSED UNDER S. 143(1) AND THE TIME-LIMIT FOR IS SUING NOTICE UNDER S. 143(2) HAS EXPIRED. IT DOES NOT ENVISAGE A SITUATION WHERE A RETURN IS FILED AND THE TIME-LIMIT FOR ISSUE OF A NOTICE UNDER S. 143(2) HAS NOT EXPIRED. UNLESS THE RETURN FILED BY THE ASSESSEE IS SCRUTINIZED BY THE AO HE CANNOT COME TO THE CONCLU SION OF ANY ESCAPEMENT. IF THE AO ISSUES NOTICE UNDER S. 143(2) THEN QUITE OBVIOUSLY HE WOULD SCRUTINIZE THE RETURN AND FRAME THE ASSESSMENT UNDER S. 143(3). SUBSEQUENTLY HE MAY NOTICE ESCAPE MENT AND ISSUE NOTICE UNDER S. 148. BESIDES THIS IN THE ABOVE TWO SITUATIONS ALSO HE WILL HAVE TO LOOK INTO THE RETURN TO SEE WHETHER THERE IS ESCAPEMENT OR NOT. IF HE NOTICES ANY ESCAPEMENT I T CAN BE CALLED 18 AN ESCAPEMENT ONLY IF IT IS NOTICED AFTER THE PROCE EDINGS HAVE BEEN TERMINATED EITHER BY WAY OF SOME ASSESSMENT EITHER UNDER S. 143(1) OR WHEN THE TIME-LIMIT FOR ISSUE OF A NOTICE UNDER S. 143(2) HAS EXPIRED. BUT IF SUCH TIME-LIMIT HAS NOT EXPIRED IT CANNOT BE TERMED AS ESCAPEMENT AND HE CANNOT RESORT TO PROCEE DINGS UNDER S. 147. IN THAT EVENT HE WILL HAVE TO ISSUE NOTICE UND ER S. 143(2). IN NUTSHELL (A) THE PROCEEDINGS ARE SAID TO HAVE COMM ENCED ONCE THE RETURN IS FILED AND (B) THE PROCEEDINGS TERMINATE WHEN (I) THE RETURN IS PROCESSED UNDER S. 143(1) AND THE TIME TO ISSUE NOTICE UNDER S. 143(2) IS OVER (II) ASSESSMENT IS MADE UND ER S. 143(3) OR (III) THE ASSESSMENT IS NO LONGER POSSIBLE UNDER S. 143(3). PROCEEDINGS UNDER S. 147 CAN BE INITIATED ONLY AFTE R THE EARLIER PROCEEDINGS HAVE TERMINATED AS MENTIONED ABOVE. OR DER UNDER . 147 R/W S. 143(3) WAS THEREFORE LIABLE TO BE QUASHE D. WHILE HOLDING SO VARIOUS CASE LAWS REPORTED IN 308 ITR 249 (MAD.) 304 ITR 264 (MAD.) WERE FOLLOWED AND THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. 291 ITR 500 WAS FO UND DISTINGUISHABLE. 38. SIMILAR FACTS ARE INVOLVED IN THE PRESENT CASE ALSO AS THE TIME FOR ISSUING NOTICE UNDER SECTION 143(2) WAS NOT EXPIRED AND BEFORE EXP IRY OF TIME LIMIT FOR ISSUING NOTICE UNDER SECTION 143(2) THE AO INITIATED PROCEEDINGS UNDER SECTION 147/148 WHICH IN OUR CONSIDERED VIEW WERE BAD IN LAW. THE ASSESSEE FI LED RETURN ON 1.11.2004. TIME FOR ISSUING NOTICE UNDER SECTION 143(2) WAS AVAILABLE W ITH AO UPTO 1.12.2005 WHEREAS AO HAS ISSUED NOTICE UNDER SECTION 148 ON 22.9.2005. INSTEAD OF ISSUING NOTICE UNDER SECTION 143(2) THE AO ISSUED NOTICE UNDER SECTION 148 WHIC H WAS WITHOUT JURISDICTION AS HELD BY TRIBUNAL IN CASE OF M/S. SUPPER SPINNING MILLS LTD. (SUPRA) AND OTHER VARIOUS COURTS. 19 38.1. THE HONBLE MADRAS HIGH COURT IN CASES RELIED UPON BY ASSESSEE HAS HELD THAT WITHOUT EXPIRY OF TIME LIMIT FOR ISSUING NOTICE UND ER SECTION 143(2) NOTICE UNDER SECTION 148 CANNOT BE ISSUED AND ALL THESE DECISIONS HAVE BEEN TAKEN INTO CONSIDERATION BY THE BENCH IN CASE OF SUPPER SPINNING MILLS LTD. (SUPRA ). THEREFORE WITHOUT GOING FURTHER INTO DETAIL WE HOLD THAT THE AO WAS NOT WITHIN HIS JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 AS THE TIME FOR ISSUING NOTICE UNDER SE CTION 143(2) WAS AVAILABLE WITH HIM.. ACCORDINGLY WE HOLD THAT ASSESSMENT COMPLETED WAS B AD IN LAW. THEREFORE THE SAME IS SET ASIDE. 39. SINCE WE HAVE ALLOWED THE LEGAL GROUND OF THE A SSESSEE THEREFORE WE ARE NOT INCLINED TO DISPOSE OFF OTHER GROUNDS OF ASSESSEE R AISED IN ITS APPEAL. 40. IN THE RESULT APPEAL OF THE ASSESSEE FOR A.Y. 2002-203 IS DISMISSED AND APPEAL FOR A.Y. 2004-05 IS ALLOWED. 41. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04 .11.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR D/ COPY FORWARDED TO :- RAJASTHAN TELEMATICS LTD. KOTA. THE ACIT CIRCLE-1 KOTA. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 352(2)/JP/2011) BY ORDER AR ITAT JAIPUR. 20