2016 (9) TMI 1071

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....plicability of provisions of section 292BB from 01.04.2008. In view of judicial pronouncements provisions of section 292BB are applicable to the matter relevant to assessment year 2008-09 and onwards and thus, notices u/s. 143(2) was time barred and the assessment so framed is abinitio- void. Ground no.2 relates to maintaining the addition of Rs. 13,50,000/- by treating unsecured loans taken from farmers who have accepted granting such loans to the assessee. Ground no.3 relates to maintaining disallowance made u/s.40A(3) of Rs. 1,08,554/- Ground no.4 relates to agriculture income of Rs. 1,25,498/- included in total income, which does not form part of total income. 3. The fact apropos to ground no.1 are that the return of income was filed on 24.07.2007 declaring total income of Rs. 1,25,498/-. The notice u/s. 143(2) was issued on 26.09.2008 and served on 30.09.2008 fixing date of hearing for 06.10.2008. Due to change of incumbent, again a notice u/s. 142(1) was issued on 19.02.2009 fixing the case for hearing on 03.04.2009. in compliance to this Shri Anil Garg CA, attended and requested for adjournment for 06.05.2009. During the course of appeal proceeding , it ....

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.... assessee having participated in the assessment proceedings. The ld. A.R. has contended that in view of substantial compliance of procedural requirement and in view of the assessee`s participation in the assessment proceedings, no invalidity to the assessment order should be attached. 6. We have considered the rival submissions and carefully gone through the material available on record. In this case the assessee has filed the return of income, which was selected for scrutiny and assessment was completed u/s.143(3)(ii) of the Act. The undisputed fact in this case is that though the notice u/s.143(2) was issued on 26.09.2008 to the assessee, which is beyond the prescribed statutory time limit prescribed. Now the law is well settled that it is mandatory on the A.O. to issue the notice u/s.143(2) and served the same on the assessee within 12 months from the end of the month in which the assessee has filed the return of income. The ld. A.R. for the assessee has placed reliance on catena of decisions as cited above. The reliance is placed in the case of Kuber Tobacco Products (P) Ltd. (120 TTJ 557) (117 ITD2) (SB-Del) wherein the Hon'ble Special Bench of the Tribunal has consider....

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....o challenge the validity of the same on the ground of valid issuance/service of notice required to be given by the statute in a case where assessee has appeared in such proceedings or co- operated in the inquiry relating to assessment or reassessment. Therefore, applying the above principles of interpretation and keeping in view above discussion it has to be held that s. 292BB cannot be construed to have retrospective operation and it has to be applied prospectively. 42. Having arrived at the conclusion that s. 292BB has no retrospective effect and is to be construed prospectively, it has to be held that prior to 1st April, 2008, i.e., upto 31st March, 2008, as per s. 292BB, the assessee is not precluded from taking any objection (hereinafter referred to as 'such objection') regarding invalidity of assessment/reassessment on the ground of improper/invalid issuance/service of a notice. 43.The second aspect which requires to be considered is that when assessee can be said to be precluded from taking such objection s. 292BB has been made applicable w.e.f. 1st April, 2008 by the Finance Act, 2008. As per well established law as explained by Hon'ble Supreme....

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....ite the fact that the proviso had come into force from 5th May, 1946 and it was held that the proviso is not retrospective and it was held that the Court cannot import into its construction matters which are 'ad extra legis' and thereby alter its true effect. It will be relevant to reproduce the observations of their lordships from the said decision : "It is well-settled that the IT Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. In Scindia Steam Navigation Co. Ltd. vs. CIT, a Division Bench of the Bombay High Court consisting of Chagla, C.J. and Tendolkar J., has considered the question as to the effect of an amendment which came into force after the commencement of the financial year. The facts in that case were these. The assessee's ship was lost as a result of enemy action. The Government paid the assessee in 1944 a certain amount as compensation which exceeded the original co....