TaxTMI 
TaxTMI 
2018 (6) TMI 898
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 28.03.2014 u/s. 143(3) read with 147 of the Act determining the income at Rs..1,90,85,290/-by making addition of Rs..1,90,04,592/- as unexplained expenditure u/s. 69C of the Act with respect to certain purchases made by the assessee treating them as non-genuine. Assessee preferred appeal before the Ld.CIT(A) and by way of additional ground assessee questioned the validity of assessment contending that no notice u/s. 143(2) was issued and served on the assessee though it is mandatory requirement for completion of assessment u/s. 143(3) of the Act. However, the Ld.CIT(A) rejected this ground of appeal observing that the assessee has complied and participated in the Assessment Proceedings till the end and no objection was raised before completion of assessment and therefore in view of the provisions of section 292BB, if assessee appears in any proceedings or cooperates in any inquiry relating to assessment or re-assessment it shall be deemed that any notice under the provisions of the Act which is required to be served upon the assessee has been duly served upon assessee in time in accordance with the provisions of section 292BB of the Act. With this observation the Ld.CIT(A) rejec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 are concerned, in both these appeals, the ITAT has held that the issuance of notice after reopening of the case was mandatory and this order is under challenge. It is contended that the said order is contrary to the provisions of Sections 292BB which was introduced by the Finance Act 2008 w.e.f. 01.04.2008, in which it is stated that in a case where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of the said Act which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of the said Act. Perusal of the order of the ITAT reveals that this aspect was not canvassed before the ITAT. 5. Apart from that, it is an admitted position that no notice under Section 143(2) had been issued while making assessment under Section 143(3) read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been served on him, if he has participated in the proceedings. However, the said section does not in any manner grant any privilege to the Assessing Officer in dispensing with the issuance of a notice under section 143(2) of the Act. Since the jurisdiction under section 143 is founded on the issuance of a notice under section 143(2), the Assessing Officer could have assumed jurisdiction only after issuing a notice under section 143(2). Even the participation of the assessee would not provide the benefit under section 292BB to the revenue. The requirement that a notice be issued is mandatory and the Assessing Officer has no other option but to issue the notice before commencing the jurisdiction." 8. We also find that the Coordinate Bench of the Tribunal in the case of M/s. Tiny Girl Clothing Company Private Limited in ITA.No. 3599/Mum/2016 dated 20.12.2017 considering the judgement of the Hon'ble Allahabad High Court in the case of CIT v. M/s. Salarpur Cold Storage (Pvt.) Ltd. [50 taxman.com 105] and the decision of the Hon'ble Madras High Court in the case of CIT v. Gitsons Engineering Co. [370 ITR 87] and the effect of provisions of section 292BB held as under: - ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ix months from the end of the financial year in which the return is furnished. Service on the assessee of a notice within the period prescribed by the proviso presupposes the issuance of a notice for, it is only when a notice is issued, that it can be served. Thereafter, the provisions of sub-section (3) of Section 143 of the Act stipulate that on the date specified in the notice issued under clause (ii) of sub-section (2) of Section 143 of the Act, the Assessing Officer shall, after hearing the evidence as the assessee may produce and considering such other evidence as he may require and upon taking into account all relevant material, by an order in writing make an assessment of the total income or loss of the assessee. The jurisdiction of the Assessing Officer to make an assessment under Section 143(3)(ii) of the Act is premised on the issuance of a notice under clause (ii) of Section 143(2) of the Act. The proviso to clause (ii) of sub-section (2) of Section 143 of the Act stipulates that a notice must be served on the assessee no later than the expiry of six months from the end of the financial year in which the return has been furnished. If a notice is not even issued within t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to Section 292 BB of the Act, however, carves out an exception to the effect that the Section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292 BB of the Act cannot obviate the requirement of complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under Section 143 (3) of the Act, it is necessary to issue a notice under Section 143 (2) of the Act and in the absence of a notice under Section 143(2) of the Act, the assumption of jurisdiction itself would be invalid. This principle is no longer in doubt having due regard to the law laid down by the Supreme Court in the decision in Assistant Commissioner of Income Tax & Another Vs. M/S Hotel Blue Moon. While construing the provisions of Chapter XIV-B of the Act in relation to block assessments, the Supreme Court in that decision considered the effect of Section 143 ....