TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 596
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....rovisions of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short). Admittedly, there were no scrutiny assessment proceedings against the said return of income. Subsequently, the Assessing Officer issued a notice under section 148 of the Act on March 29, 2012, requiring the assessee-company to file the return of income. In response to this notice, the assessee-company submitted that the original return of income filed under section 139(1) on September 25, 2009, may be treated as the return in response to the notice under section 148 of the Act. In the same letter, the assessee-company also requested the Assessing Officer to furnish reasons recorded for issuance of notice under section 148 of the Act. Subsequently, the Assessing Officer issued a notice under section 143(2) on March 29, 2012, and, finally, the assessment was completed under section 143(3) read with section 147 on October 31, 2012, treating the agricultural income as business income computed at Rs. 6,15,66,724 after setting off brought forward loss as claimed by the assessee of Rs. 6,15,66,724, tax was computed at nil. However, tax liability under the provisions of section 115JB was computed treati....
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....read with section 147 dated October 31, 2010, without valid jurisdiction, consequently the assessment order is annulled. 3.11 Since the assessment order itself is considered invalid and set aside, it is therefore, deemed not necessary to adjudicate, other grounds of appeal, therefore, those grounds are not entertained and liable to be dismissed. 4. Being aggrieved, the Revenue is before us in the present appeal. The grounds of appeal raised by the Revenue are as under : 1. The order of the learned Commissioner of Income-tax (Appeals) is opposed to law and the facts and circumstances of the case. 2. The learned Commissioner of Income-tax (Appeals) erred in holding the reassessment proceedings as invalid for non-issue of notice under section 143(2) without considering that the assessee has participated in the assessment proceedings without raising any objection before the Assessing Officer and hence as per the provisions of section 292BB inserted by the Finance Act, 2008, with effect from April 1, 2008, the assessee is precluded to raise such objection in any other proceedings. 3. The learned Commissioner of Income-tax (Appeals) erred in holding the reassessment proceedings ....
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....ue Moon [2010] 321 ITR 362 (SC). (ii) L. N. Hota and Co. v. CIT [2008] 301 ITR 184 (SC). (iii) CIT v. M. Chellappan [2006] 281 ITR 444 (Mad). (iv) Deputy CIT v. Maxima Systems Ltd. [2012] 344 ITR 204 (Guj); (2010) 236 CTR 443. (v) Sant Baba Mohan Singh v. CIT [1973] 90 ITR 197 (All). (vi) Rajmani Devi v. CIT [1937] 5 ITR 631 (All). (vii) Mrs. C. Malathy v. ITO [2004] 88 ITD 37, 42, (Chennai); [2004] 89 TTJ 938 (Chennai). (viii) ITO v. Smt. Sukhini P. Modi [2007] 295 ITR (AT) 169 (Ahd); [2008] 112 ITD 1, 21 (Ahd); [2008] 113 TTJ 63. (ix) Smt. Bandana Gogoi v. CIT [2007] 289 ITR 28, 36 (Gauhati). (x) Peerless General Finance and Investment Co. Ltd. v. CIT [2010] 320 ITR 622, 635 (Cal) The learned counsel for the assessee submitted that the provisions of section 292BB are applicable only in respect of service of notice and does not cover the case of issue of notice. In support of this proposition, he relied on the decision of the hon'ble Delhi High Court in the case of Principal CIT v. Silver Line [2016] 383 ITR 455 (Delhi); [2016] 283 CTR (Delhi) 148 and the decision of the hon'ble Allahabad High Court in the case of Nawal Kishore and Sons Jewellers v. CIT [2012] 79....
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....ssessment proceedings does not arise. Moreover, when the Assessing Officer had given a categorical finding that notice under section 143(2) was issued on March 29, 2012, the onus lies on the assessee to prove that no notice was issued. Even rule 10 of the Income-tax (Appellate Tribunal) Rules, 1963, specifically lays down that where a fact contrary to the record is alleged, it shall be stated clearly and concisely and supported by duly sworn affidavit. There is nothing discernible from the order of the Commissioner of Income-tax (Appeals) to say that the assessee-company had filed an affidavit alleging that the finding contrary to the fact as regards the issue of notice under section 143(2) was recorded by the Assessing Officer in the assessment order. The Commissioner of Income-tax (Appeals) ought not to have come to such conclusion that no notice under section 143(2) was issued by the Assessing Officer even though there was failure by the assessee-company to discharge the burden of proving the allegation that no notice under section 143(2) was issued. Thus, there is perversity in the finding of the Commissioner of Income-tax (Appeals) to conclude that no notice under section 143(....
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....cted below (page 497 of 359 ITR) : "We are of the opinion that the expressions 'serve' and 'issue' are interchangeable, as has been noticed in section 27 of the General Clauses Act, 1897, and also in a judgment of the hon'ble Supreme Court reported as Banarsi Debi v. ITO [1964] 53 ITR 100 (SC); AIR 1964 SC 1742. In the aforesaid case, an argument was raised that section 4 of the Amending Act (Act No. 1 of 1959) only saves a notice issued after the prescribed time, but does not apply to a situation where notice is issued within but served out of time. The court observed as under (page 106) : 'Section 4 of the Amending Act was enacted for saving the validity of notices issued under section 34(1) of the Act. When that section used a word interpreted by courts in the context of such notices, it would be reasonable to assume that the expression was designedly used in the same sense. That apart, the expressions "issued" and "served" are used as interchangeable terms both in dictionaries and in other statutes. The dictionary meaning of the word "issue" is "the act of sending out, put into circulation, deliver with authority or delivery". Section 27 of the Gener....
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....filing an appeal or revision under certain statutory provisions had come up for consideration in a number of cases. We may state that the ratio of the decisions uniformly is that in the case of a person aggrieved filing the appeal or revision, it shall mean the date of communication of the decision or order appealed against. However, we may note a few leading cases on this aspect. . . . 11. The ratio of these judgments was applied in interpreting section 33A(2) of the Indian Income-tax Act, 1922, in O. A. O. A. M. Muthiah Chettiar v. CIT [1951] 19 ITR 402 (Mad); [1951] ILR Mad 815 with reference to a right of revision provided to an aggrieved assessee. Section 33A(1) of the Act on the other hand authorised the Commissioner to suo motu call for the records of any proceedings under the Act in which an order has been passed by any authority subordinate to him and pass such order thereon as he thinks fit. The proviso, however, stated that the Commissioner shall not revise any order under that sub-section "if the order (sought to be revised) has been made more than one year previously". Construing this provision the High Court in O. A. O. A. M. Muthiah Chettiar's case held that th....
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....passing of the order and what it contains. The knowledge of the party affected by such a decision, either actual or constructive is thus an essential element which must be satisfied before the decision can be said to have been concluded and binding on him. Otherwise the party affected by it will have no means of obeying the order or acting in conformity with it or of appealing against it or otherwise having it set aside. This is based upon, as observed by Rajamannar C. J. in O. A. O. A. M. Muthiah Chettiar v. CIT (supra) 'a salutary and just principle'. The application of this rule so far as the aggrieved party is concerned is not dependent on the provisions of the particular statute, but is so under the general law. . . 18. Thus if the intention or design of the statutory provision was to protect the interest of the person adversely affected, by providing a remedy against the order or decision any period of limitation prescribed with reference to invoking such remedy shall be read as commencing from the date of communication of the order. But if it is a limitation for a competent authority, to make an order the date of exercise of that power and in the case of exercise o....
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.... position to change its mind and modify it if it thought fit. But once such an order is sent out, it goes out of the control of such an authority, and therefore, there would be no chance whatsoever of its changing its mind or modifying it. In our view, once an order is issued and it is sent out to the concerned Government servant, it must be held to have been communicated to him, no matter when he actually received it. We find it difficult to persuade ourselves to accept the view that it is only from the date of the actual receipt by him that the order becomes effective. If that be the true meaning of communication, it would be possible for a Government servant to effectively thwart an order by avoiding receipt of it by one method or the other till after the date of his retirement even though such an order is passed and despatched to him before such date. An officer against whom action is sought to be taken, thus, may go away from the address given by him for service of such orders or may deliberately give a wrong address and thus prevent or delay its receipt and be able to defeat its service on him. Such a meaning of the word "communication" ought not to be given unless the provis....
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....ding recorded that such service was non est in the eye of the law. In a given case, if the assessee knows about the proceedings and there is some irregularity in the service of notice, the direction for continuing proceedings cannot be faulted. It would depend upon the nature of irregularity and its effect and the question of prejudice which are to be adjudicated in each case on the basis of surrounding facts. If, however, the service of notice is treated as non est in the eye of the law, it would not be permissible to direct de novo assessment without considering the question of limitation. There also the question of prejudice has to be considered. . . The emerging principles are (page 106 of 130 STC) : (i) Non-issue of notice or mistake in the issue of notice or defective service of notice does not affect the jurisdiction of the Assessing Officer, if otherwise reasonable opportunity of being heard has been given. (ii) Issue of notice as prescribed in the rules constitutes a part of reasonable opportunity of being heard. (iii) If prejudice has been caused by non-issue or invalid service of notice the proceeding would be vitiated. But irregular service of notice would not r....
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.... view of the legal position narrated above, the same legal position is to be applied even for issuance of notice under section 143(2). Accordingly, we hold that there is a valid issue of notice and service under section 143(2) as well as service of notice on the assessee-company. 10. In the result, the appeal filed by the Revenue is allowed. Cross-objections 11. The cross-objections are filed by the assessee-company. The assessee- company raised the following cross-objections : "1. The orders of the lower authorities in so far as they are against the respondent/cross-objector is opposed to law, equity and weight of evidence, probabilities, facts and circumstance of the case. 2. The learned Commissioner of Income-tax (Appeals) erred in holding that the other grounds of appeal are not entertained and liable to be dismissed, without adjudicating the various grounds of appeal raised by the respondent/cross-objector on the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross objector that the order of assessment is bad in law and void ab initio for want of requisite jurisdiction especial....
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....r is not justified in denying the exemption under section 10(1) of the Act being agricultural income of Rs. 8,36,50,750 on the facts and in the circumstances of the case. 10. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that without prejudice the learned Assessing Officer ought to have considered only the income derived out of the alleged cultivation through agreement as business income and not the income derived out of the own cultivation by the respondent/cross-objector on the lands belonging to the respondent/cross-objector and the lands taken by the respondent/cross-objector on lease he ought to have treated the same as agricultural income under the facts and in the circumstances of the case. 11. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the ground of the respondent/cross-objector that the learned Assessing Officer is not justified in law in not granting the proportionate value of agricultural inputs out of the income constituting from business under the facts and in the circumstances of the case. 12. The learned Commissioner of Income-tax (Appeals) failed to adjudicate the gr....
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....we shall deal with the very maintainability of the present cross-objections. From the grounds of cross-objections, it is clear that the assessee-company assailed the order of the Commissioner Income-tax (Appeals) for not adjudicating the grounds of appeal on the merits as well as on the validity of the reassessment proceedings for non-furnishing of the reasons recorded despite grounds raised by the assessee-company. The provisions governing filing of cross-objections are found at sub-section (4) of section 253 of the Act which read as under : "253.(4) Appeals to the Appellate Tribunal.-The Assessing Officer or the assessee, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) or the Assessing Officer in pursuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, ag....