TaxTMI 
TaxTMI 
2015 (9) TMI 1624
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....sessment order passed by the AO u/s 143(3), observed that the said order was erroneous, in so far as it was prejudicial to the interest of revenue for the following reasons: "On perusal, it is noticed that the assessee has started new business and opening capital of Rs. 2251672.32 has been reflected in Capital A/c, the source of which should have been got explained, however, the A.O. neither put any query in this regard nor further scrutinized the issue. II. Further, the assessee has purchased land measuring 1 kanals 13.6 marla on 27.03.2001 at Rs. 1,24,000/- and during the financial year under consideration sold various shops for RS.31 ,98,000/- constructed on 381.04 sq. yard portion of this land. The assessee has declared long term ca....
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....th the order of ld. CIT, the assessee is in appeal before us and has taken following grounds of appeal: "That the order of the Ld. CIT setting aside the Assessment order u/s 263(1) by considering it as erroneous in so far as it is prejudicial to the interest of revenue is against law & facts for the alleged reason that :- (i) The sale of plot out of the land in which money was invested to acquired & held as a capital assets as a Trading activity and directing to assess the income there from as business income in view of judgment of P&H High Court passed on different facts by ignoring later judgments of the same high court and of other courts. (ii) To verify the short term capital loss of Rs. 35002/- duly proved on sale of shops. (ii....
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.... of the ground at the time of or before hearing of appeal." 5. At the outset ld. counsel for the assessee referred to ground no. 3 noted above and pointed out that since the original assessment order passed by AO was bad in law, therefore, the said order could not be revised u/s 263 of the Act. He submitted that original return for AY 2007-08 was filed on 31-7-2007 and the notice u/s 143(2), which should have been issued before 31-7-2008 was admittedly issued on 5-9-2008 fixing the case for hearing on 17-9-2008. 6. Ld. counsel submitted that the law as applicable on the date of filing of return will be applicable and accordingly the notice u/s 143(2) should have been issued within 12 months from the end of the month in which the return wa....
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....earlier order. The Tribunal came to the conclusion that such a contention had been raised by the assessee and it decided that contention in favour of the assessee. The decision of the Tribunal, therefore, was that the assessment was barred by time, but, at the same time, on merits, the Tribunal had decided in favour of the Department. Against the aforesaid order passed under section 254(2) of the Act, the Department filed a reference application under section 256(1), but the said application was dismissed. The assessee then moved a second miscellaneous application being No. 14 of 1986 in which it prayed that the Tribunal should recall its order passed in the main appeal being ITA No. 1325 of 1983. The Tribunal observed, vide its order dat....
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....omatically remain." 10. With reference to above decisions, ld. counsel submitted that the objection regarding assessment order being bad in law can be taken at any stage of proceedings and since the assessment order was bad in law, therefore, any decision on merit is of no consequence. 11. Ld. counsel further submitted that the protection given u/s 292BB is also not available for the present assessment order as the said section has been held to be prospective. In this regard he relied on the decision of Amritsar Bench of the ITAT in theca e of DCIT Vs. Mangat Ram 154 TTJ (Asr)(UO) 24. 12. Ld. DR submitted that the plea regarding invalidity of the assessment order, on the basis of issuance of notice u/s 143(2), beyond one year, cannot be ....
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....Hon'ble Jurisdictional High Court in the case of Gee Vee Enterprises (supra), because AO had not carried out any inquiry We have considered the rival submissions and have perused the record of the case. Before we come to the merits of the case the preliminary objection, raised by assessee vide ground no. 3, needs to be addressed. 16. Admittedly the notice u/s 143(2) was issued beyond time and, therefore, the assessment order was bad in law. Ld. CIT(DR)'s submission is that assessee has not challenged the assessment order. However, since the assessee was not aggrieved with the assessment order, therefore, he did not challenge. However, nothing turns on this when we consider the issue in the backdrop of proceedings initiated u/s 263 by ld. C....