TaxTMI 
TaxTMI 
2015 (8) TMI 226
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....t 1.0pt; mso-border-alt:solid windowtext .5pt; mso-padding-alt:0in 5.4pt 0in 5.4pt; 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 ....
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.... Closing stock & WIP 114,13,13,652 116,44,04,346 31,81,18,837 84,62,85,509 3 Provision 4,66,92,189 40,82,082 1,76,65,756 (-) 1,30,83,695 4 Profit 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(Appea....
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....us discrepancies which the A.O. wanted to verify. In the light of the above, the assessee's contention that the assessment u/s 147 r.w.s. 143(3) is not valid in law, is not tenable and this ground is disposed 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 fr....
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....lso not in dispute that this is the only 143(2) notice issued by the AO. The order of assessment is very clear on this aspect. The law is by now well settled that issuance of a notice u/s. 143(2) of the Act within 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 r....
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....ase is not with regard to issue and service of notice u/s. 143(2) of the Act, as admittedly there was only one notice u/s. 143(2) dated 19.08.2010 issued and served on the assessee before completion of the assessment proceedings. 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....
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....r :- "39. It may be noted that no doubt, the foundation to assess or reassess is laid by issue of a valid notice under s. 148 but such jurisdiction is subject to further compliance was has been stipulated in the statute itself. 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....
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....se- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been 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 S....