TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 226
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.... mso-border-insideh:.5pt solid windowtext; mso-border-insidev:.5pt solid windowtext; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} SHRI N.V. VASUDEVAN AND SHRI ABRAHAM P. GEORGE, JJ. For The Revenue : Shri R. Ravichandran, CIT-III(DR) For The Assessee : Shri K. Sheshadri, C.A. ORDER Per N.V. Vasudevan, Judicial Member ITA No.1302/Bang/2012 is an appeal by the Revenue against the order dated 30.7.2012 of CIT(Appeals)-VI, Bangalore relating to assessment year 209-10. The assessee has filed a Cross Objection against the very same order of the CIT(Appeals). 2. The assessee is a company. It is engaged in the business of property development and real estate. For AY 2008-09, assessee filed a return of income on 30.9.2008 declaring a total income of Rs. 4,75,22,320. An intimation u/s. 143(1) of the Income-tax Act, 1961 ["the Act"] dated 29.9.09 was issued in respect of the return of income so filed by the assessee. 3. There was a search and seizure op....
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....fit before tax 12,17,43,218 14,48,33,912 4,73,09,901 9,75,24,011 5 Provision for current tax 4,26,10,126 Nil 1,65,58,465 (-) 1,65,58,465 A plain reading of the chart suggest that the assessee company has suppressed net profit to the tune of Rs. 9,75,24,011/- and the same is added to the total taxable income of the assessee." 4. Aggrieved by the order of the AO, assessee filed appeal before the CIT(Appeals). Amongst other grounds, assessee also challenged the validity of the proceedings completed u/s. 147 of the Act on the ground that no notice u/s. 143(2) had been issued to the assessee before completion of the assessment u/s. 147 of the Act. 5. The CIT(Appeals) deleted the addition of Rs. 9,75,24,011 made by the AO. Aggrieved by the impugned order, the Revenue has filed the appeal. 6. As far as ground of appeal raised by the assessee challenging the validity of order passed u/s. 147 for non-issue/service of notice u/s. 143(2) within the time required, the CIT(Appeals) called for a remand report from the AO. The AO in the remand report submitted as follows:- "Comments on Ground No.2: The order u/s 147 r. w.s. 143(3) of I.T. Act is a valid one in terms of provisio....
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....osed off accordingly." 8. Aggrieved by the aforesaid findings of the CIT(Appeals), the assessee has filed Cross Objection before the Tribunal. 9. We have heard the ld. counsel for the assessee and the ld. DR on the issue of non-issue/service of notice u/s. 143(2) within the time required under those provisions as raised by the Assessee in its cross-objection. The assessment records were called for with a view to ascertain the factual details. From a perusal of the said records, the facts that emerge are that; the date of filing of return of income in response to notice u/s. 148 of the Act was 23.8.2010. In terms of proviso to section 143(2)(ii), notice u/s.143(2) of the Act ought to be issued and served on the assessee within a period of six months from the end of the financial year in which the return is furnished. The end of financial year in which return of income is furnished in this case is 31.3.2011. In terms of proviso to section 143(2)(ii), the six months period from the end of financial year would end on 30.9.2011. A perusal of assessment records reveals that first notice u/s. 143(2)(ii) proviso, rather the only notice, was issued by the AO only on 13.10.2011, which is....
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....n the statutory time limit is mandatory and it is not a procedural requirement which is inconsequential. Reference may be made to the decision of the Hon'ble Delhi High Court in the case of Alpine Electronics Asia Pvt. Ltd. v. DGIT, 341 ITR 247 (Del), CIT v. Vardhana Estates Pvt. Ltd., 287 ITR 368 and ACIT v. Hotel Blumoon, 321 ITR 362 (SC). The contrary view expressed by the Hon'ble Madras High Court, in our view, cannot be followed as the decisions relied on by the ld. counsel for the assessee of Hon'ble Punjab & Haryana High Court and Allahabad High court also took the view that non-issuance of notice u/s. 143(2) of the Act renders assessment order invalid. Admittedly, notice u/s. 143(2) of the Act not having been served on the assessee within the period contemplated under law, the order of assessment has to be held to be invalid and annulled. 15. The ld. DR has, however, placed reliance on the provisions of sections 292B & 292BB of the Act. The aforesaid provisions read as follows:- "292B Return of income, etc., not to be invalid on certain grounds No return of income, assessment, notice, summons or other proceedings, furnished or made or issued or taken or purported to h....
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....edings. The question is as to, whether the said notice was issued and served within the time contemplated u/s. 143(2) of the Act. The provisions of Sec.292BB lay down presumption in a given case. It cannot be equated to a conclusive proof. The presumption if rebuttable. The provisions of section 292BB cannot extend to a case where the question of limitation is raised on admitted factual position in a given case. We therefore hold that the provisions of section 292BB of the Act will not be applicable to the present case. 17. In light of the discussion as aforesaid, we hold that the assessment proceedings are invalid for the reason that the notice u/s. 143(2) of the Act had not been issued and served within the time limit prescribed by those provisions. The order of assessment is accordingly annulled." (emphasis supplied) 12. The ld. counsel for the assessee also submitted before us that even before completing the proceedings u/s. 147, provisions of section 143(2) are applicable and in this regard placed reliance on the decision of this Tribunal in the case of C. Ramaiah Reddy v. DCIT, ITA No.121/Bang/2011 for AY 2005-06, order dated 27.1.2012 and H. Goutham Chand v. Addl. CIT,....
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....If compliance of the proviso is not made, the very purpose of creating the proviso is defeated, i.e. uncertainty of assessee with respect to assessment shall continue. It is again a settled principle of interpretation that no construction of a statute should be made in a manner, which leaves a statute redundant, On the contrary law requires a strict interpretation of the proviso. We may here clarify that provisions of limitation are to be strictly construed. An illuminating reference to this aspect can be found in the following observation of the Supreme Court in the case of K. M. Sharma vs. ITO (supra). "A fiscal statute more particularly a provision such as the present one regulating period of limitation must received strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigants for an indefinite period on future unforeseen events." If limitations are not followed strictly, chaotic situation would follow. 40. In the light of the analysis of the relevant provisions of law and judicial precedents, we are of the considered view that the return filed pursuant to notice under s.....
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....en served under clause (ii) of subsection (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in subsection (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation : For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section." The two provisos in sub-section (1) to section 148 has been inserted with retrospective effect from 1st October, 1991. The gist of the two provisos may suitably be stated thus- Where a return has been furnished daring the period commencing on 1st October, 1991 and ending on 30th September, 2005, in response to a notice of reassessment served under section 148, and subsequently a notice has been served under section 143(2) [or 143(2)(ii), as the case may be] after the expiry of twelve months as specified in the relevant p....