TaxTMI 
TaxTMI 
2015 (3) TMI 562
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....blades LAM 15.4. It is also claim of the assessee that technology was used by the assessee during the previous year and assessee had manufactured LM 15.4 blades and sold them to one of its customers under Invoice LMGI 038/99-2000 dated 11.2.2000. According to the assessee, it was therefore entitled to claim depreciation on the capitalised value of technical know-how, as the technology has been acquired and used by the assessee during the previous year. The assessee earned interest income of Rs. 65,64,857 on deposits with banks. According to the assessee, the deposits were made out of sale proceeds of blades manufactured by it. It was the claim of the Assessee that it was entitled to claim deduction u/s. 80IA of the Act. The assessee had included the interest on deposits also as income or profits on which deduction u/s. 80IA of the Act has to be allowed. According to the assessee, the source of deposits was business and therefore interest income has to be considered as eligible profits for the purpose of deduction u/s. 80IA of the Act viz., business of manufacture of article of thing. As already stated the return of income of the Assessee was accepted u/s.143(1) of the Act and the c....
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....ore 562 114. The assessee also pointed out that in the course of assessment proceedings before the AO, the AR of the assessee orally submitted that no notice u/s. 148 of the Act was served on the assessee. It was also claimed that the AO informed the AR that it would have been served. On the basis of the aforesaid allegations made by the assessee before CIT(A), the ld. CIT(A) called for a remand report from the AO and after considering the same dealt with the issue of nonservice of notice u/s.148 of the Act and observed on the same as under:- "5.3. The A.O. Dr. K J Divya appeared personally and showed the assessment records. She argued that on 29-11-2000 the appellant had filed a covering letter along with the return of income of A.Y.2000-0l. The covering letter revealed the following addresses - L M Glassfiber (India) Limited, Off: 310, Raheja Arcade, 1/1, Koramangala Industrial Layout, Bangalore -560 095. Regd. Off/Fac: Plot No.61 & 62, KASABA Industrial Area, Hosakote -562 114 Tel: 98440 - 26413/26414 Telefax: 08111 - 71320 /71701 5.3.1. She pointed out that, in view of the above, there is nothing strange if the A.O. had issued the notice u/s.148 of I.T.Act in one of ....
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....ase (supra), it was held that in the absence of a proper service of notice u/s 148, the AO cannot make an assessment u/s 147 of the Act. It was further held that just because the assessee responds to notice issued u/s 142(1), it cannot be said that there is a response to notice u/s 148. Therefore, it was submitted that the non-service of notice on the assessee at the proper address is fatal to the order u/s 147 for the AY 2000-01. It was also submitted that the learned CIT (A) has held that the notice has been issued to the address given in the covering letter. The learned counsel drew our attention to the covering letter referred to in the CIT(A) order and submitted that perusal of the letter would show that it clearly contains the address of the registered office and factory and also the office address at Raheja Arcade. He queried as to why the AO chose only the office address at Raheja Arcade. The return filed by the Assessee shows the Hoskote Industrial area as the address of the Assessee. He pointed out that all other notices issued by the assessing officer were addressed to the Hoskote address. According to him therefore, it is a bit strange to find that only the notice u/s 1....
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....uments as the assessing officer may require cannot be deemed to be knowledge of the proceedings u/s 147 of the Act. It was his submission that the learned CIT(A) has completely failed to notice that the notices u/s 143(2), 142(1) are to be issued only after the valid service of notice u/s 148. If there is no valid service of notice u/s 148, the question of initiating assessment proceedings by issuing notice u/s 143(2), 142(1) does not arise at all. Such notices are null and void as held by the Hon'ble Tribunal in Hind Book House 274 ITR (AT) 61. Hence, it was submitted that the assessment made u/s. 147 is void and liable to be quashed. 9. It was further submitted that just because the authorized representative of the Assessee appeared before the assessing officer in response to notice u/s 143(2) of the Act, it cannot be said that it has acquiesced in the proceedings. It was submitted that S.292 BB of the Act is not applicable for the AY 2000-2001. Our attention was drawn to the decision of the Special Bench of Hon'ble ITAT in Kuber Tobacco Products Pvt Ltd DCIT 310 ITR (AT) 300 wherein it was held that provision of S.292BB would apply only w.e.f AY 2008-09 and not for the ....
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....he said address and has addressed the notice to '310, Raheja Arcade, 1/1, Koramangala Industrial Layout, Bangalore'. These circumstances throw suspicion on whether notice u/s. 148 was issued at all to the assessee. From the evidence available on the record, we are of the view that revenue has failed to establish the issue of notice u/s. 148 of the Act as well as its service on the assessee. 13. The Hon'ble Supreme Court in the case of R.K. Upadhyaya v. Shanabhai P. Patel, 166 163 (SC) had to deal with a case where notice u/s. 148 of the Act was issued within the period of limitation, but it was served on the assessee beyond that period. The validity of such proceedings was in challenge before the Hon'ble Apex Court. The Hon'ble Supreme Court held that once a notice is issued within the period of limitation, the AO gets power to proceed to reassess. It was further held that service of notice u/s. 148(1) is mandatory for making an order of assessment. Such service of notice u/s. 148 is not a condition precedent for assuming jurisdiction, but it is a condition only for making an order of assessment. Following were the observations of the Hon'ble Supreme Court:....
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....a prescribed time becomes the right of the assessee to receive that notice in time to validly commence the proceedings and validly completing the same. First and foremost rule of construction of interpretation is that in the absence of anything in the enactment to show that it is to have retrospective operation, the said enactment cannot be construed to have retrospective operation and when amendment relating to a procedural provision results into creating a new disability or obligation and which imposes new duty in respect of transactions already completed, then, the said procedural provision also cannot be applied retrospectively. Similar is the position where a statute which not only changes the procedure, but also creates new rights and liabilities which shall be construed to be prospective in operation unless otherwise provided either expressly or by necessary implication. Sec. 292BB has been made effective by the legislature from 1st April, 2008 and there is nothing in the enactment to show that s. 292BB has retrospective operation. If it is so, according to rule of interpretation, s. 292BB cannot be construed retrospectively. No doubt, issue and service of notice though may ....