TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 2073
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....as not given an opportunity to be heard by the Ld. Pr. CIT during the proceedings under section 263 of the Act wherein the impugned order was passed; And so according to the assessee, which is an LLP is that since the impugned order was passed by Ld. Pr. CIT without affording an opportunity of hearing was, therefore, bad in law for violation of natural justice. In order to buttress this legal challenge it was pointed out that the show cause notice was issued by Ld. Pr. CIT to the erstwhile assessee company's address which was before May 17, 2010 after which it has changed to address at Princep Street and continued in the same address after the assessee company got converted to an LLP on 19.01.2011. According to the assessee, after conversion to an LLP it's address was at Princep Street address and since has not received any notice about the proceedings u/s. 263 of the Act because of which it was not aware of the revisional proceeding itself so, it did not get an opportunity of hearing before the Ld. Pr. CIT before passing the impugned order. So the assessee in the first round of appeal before the Tribunal had raised a ground against the impugned order of Pr. CIT u/s. 263 st....
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....ch 28, 2013, the relevant company was dissolved upon its assets and liabilities being taken over as a going concern by the appellant herein as a limited liability partnership. There can be no doubt that upon the assets and liabilities of a business entity being taken over by another as a going concern, the previous liabilities of the original entity fasten on to the subsequent entity. It can also not be disputed that if a particular assessing officer and a relevant commissioner had jurisdiction over the original entity, such authorities would continue to have jurisdiction to reopen the matter pertaining to previous assessment years when the entity was in existence. The objections raised on such grounds do not appear to be worthy of any further consideration. However, what is of importance is that even though a previous notice under Section 263 of the Act is not a sine qua non for the jurisdiction to be exercised thereunder by the commissioner, the provision mandates an opportunity of hearing to be afforded to the assessee. In the present case, upon the assessee company being dissolved, such opportunity of hearing ought to have been given to the present appellant, particularly, si....
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.... the appellant herein as the successor-in-interest of Brolly Dealcom Pvt. Ltd. had notice of the hearing under Section 263 of the Act. If there is sufficient material that the original assessee and the present appellant carried on business at the same premises and notice was served at such premises, it will not do for the appellant to feign ignorance by merely stating that the noticee was erroneously addressed to a defunct entity. ITA No. 25 of 2018 and GA No.450 of 2017 are disposed of by setting aside the order impugned dated August 10, 2015 in so far as it concerns Brolly Dealcom Pvt. Ltd. for the appellate tribunal to apply its mind to the limited issue indicated hereinabove and pass a fresh reasoned order. There will be no order as to costs." 4. The Hon'ble High Court by the aforesaid order has remanded to us a limited question as to whether there is violation of the principles of natural justice qua the LLP which is the Successor-in-Interest of the M/s. Brolly Dealcom Pvt. Ltd. before the Ld. Pr. CIT passed the order u/s. 263 of the Act. In other words, whether the LLP was served with a notice of sec. 263 proceedings or made aware of the said proceedings or is it feign....
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....s file that the show cause notice (first notice) was sent on 18.03.2013 to the Principal Officer of M/s. Brolly Dealcom Pvt. Ltd., 16, G. C. Avenue, Kolkata-700 013 as well as to 9/1, R. B. C. Road, Kolkata-700 028 directing the assessee to be present on 25.03.2013. Thereafter, the reminder was sent on 25/26.03.2013 directing the assessee to appear on 28.03.2013 which was also sent to M/s. Brolly Dealcom Pvt. Ltd., 16, G. C. Avenue, Kolkata-700 013 and 9/1, R. B. C. Road, Kolkata-700 028 and we note that the AO in the original assessment order dated 30.04.2010 and the Ld. CIT has passed the 263 order on 26.03.2013 in the address given of M/s. Brolly Dealcom Pvt. Ltd., 16, G. C. Avenue, Kolkata-700013 and further we note that the original assessment order dated 30.04.2010 and in the Show Cause Notice issued by Ld. Pr. CIT before passing the impugned order has addressed it to another address also i.e. 9/1, R. B. C. Road, Kolkata-700028. 7. However, the Ld. CIT, DR justifying the action of ld CIT, and contending that assessee was served with the notice, drew our attention to the Show Cause Notice of Ld. Pr. CIT and contended that it was delivered to M/s. Brolly Dealcom Pvt. Ltd. on 2....
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....ved company has endorsed as receiving the impugned order and affixed the seal of the company which is non-est in the eyes of law in no manner can be construed as service of notice to the successor-in-interest LLP which is a different entity functioning at P-103, Princep Street, 3rd floor, room No. 24, Kolkata-72. And the Ld. AR drew our attention to the impugned order of the Ld. Pr. CIT passed u/s. 263 dated 28.03.2013, wherein it was pointed out that the Ld. Pr. CIT has specifically noted in the cause title in column No. 9 that none appeared and has recorded that no submission has been filed by the assessee and thus it was brought to our notice that the Ld. Pr. CIT has not said anything about any submission made by the AR/assessee in the order passed u/s. 263 of the Act. 8. We on a perusal of the "tear off acknowledgment slip" (wherein date of 20.03.2013 which we term it as 'First tear off acknowledgement') shown by the Ld. CIT, DR, we note that though it was a "tear off Acknowledgment slip" there is neither any [g.i.r] number, name nor address of Assessee (no name of private ltd company or LLP) is written on it; further, there is neither any information as to who receive....
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....Company had duly informed the AO i.e. ITO, Ward-5(4) on 16.04.2012 (supra) about the change in address and change in status and also referred in the letter, the earlier PAN as well as the present PAN and there is a seal of the ITO, Ward- 5(4) endorsing having received the same on 16.04.2012 and the return of income for AY 2011-12 was filed by the LLP reflecting the new PAN as well as Princep Street address filed on 24.09.2011. And according to the file of Ld. Pr CIT the first notice was issued on 18.03.2013 to two addressees at G. C. Avenue and to R B. C Road and not the Princep Street address of LLP. 11. We also note that in the department's file, two copies of the Show Cause Notice issued by Pr. CIT dated March 25/26, 2013 of which one we note is the office copy and other is a photo copy. In the original office copy and photocopy we note it is addressed to the Private Limited Company at G. C. Avenue as well as R.B.C. Road. We note that the Princep Street address is not mentioned below the name/caption of the company. However, a careful perusal of the photocopy of the Show Cause Notice, at the bottom of the Show Cause Notice, we note a scribbling which is illegible hand writt....
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.... 3rd Floor, P-l03, Princep Street, Kolkata-700072. The Ld. AR pointed out that since the partner of LLP is familiar with the employees hand writing and signature he would be able to easily identify the signature and the hand writing of his staff but since it was not of his employees, he asserted this fact. It is further asserted in the affidavit by the partner of LLP that neither the notice dated March 18, 2013 nor the notice dated March 25/26, 2013 was served on any person connected or employed with the LLP and, therefore, the order passed by Ld. Pr. CIT u/s. 263 dated March 28, 2013 was passed without affording any opportunity to the LLP. Moreover, it was brought to our notice that Shri Sushanta Kumar Parida, ex- Director of the dissolved/defunct Private Limited Company has also stated in the affidavit that the author of the aforesaid acknowledgement could not be identified by him. It was brought to our knowledge that several attempts were made to dial the mobile phone number mentioned in the endorsement, but the voice message they got every time was that the phone is switched off. Shri Sushanta Kumar Parida, Ex-Director has stated that neither the notice dated March 18, 2013 nor....
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....me of company is all in capital letter (which is different from the seal on the first acknowledgment tear off dated 20.03.2013 wherein all letters are not capital) of the company and is signed by Shri Sushanta Kumar Parida on March 31, 2013 as Director [ herein after referred as second tear off acknowledgement slip]. The question before us is as to whether any notice of hearing was served before the impugned order was passed on 28.03.2013 and not about service of the order. The company had its registered office at G.C. Avenue till October 8, 2009. From October 9, 2009 the registered office was at 9/1, R.B.C. Road thereafter from 17.05.2010 it shifted its office to Room No. 24, 3rd floor, P-103, Princep Street, Kolkata-700072. After converting as an LLP its registered office continued at Room No. 24, 3rd Floor, P-103, Princep Street, Kolkata-700072 which is the registered office reflected in the Certificate of Registration of LLP. Shri Sushanta Kumar Parida in his affidavit has stated that after shifting, no person at the old address was authorised to receive any communication addressed to the company. Explaining how the erstwhile director of company has collected the impugned order....
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....g that the impugned order was passed against the Private Limited Company insisted that Power of Attorney from company with company's seal affixed on it to C.A be given, then only they would be permitted to pursue on the queries in respect of the impugned order ex-parte passed against M/s. Brolly Dealcom Private Limited. We note that in the order dated March 28, 2013 passed by the Commissioner under section 263 it is expressly recorded that none appeared and that there was no compliance from the part of assessee and so the order was being passed ex parte. It is thus clear to us that the Power of Attorney was not filed in course of the proceedings under section 263 and the stand of the ex-director of company and which was corroborated by the CA in the sworn affidavits that it was executed after receipt of the order under section 263 for the purpose of making enquiries in the office of the Commissioner is necessarily is to be drawn as correct in the facts and circumstances analysed supra and the department has failed to controvert this facts discussed above. 15. Having regard to the aforesaid facts, there is nothing to show that the communication dated March 25/26, 2013 was sent ....
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....n any person having the control or management of the partnership business at Room No. 24, 3rd Floor, P-103, Princep Street, Kolkata-700072. In the facts and circumstances of the instant case, it cannot at all be said that any notice was served in the manner as provided under the Code of Civil Procedure. 17. It is clear that there has been violation of the principles of natural justice because no opportunity whatsoever was afforded to the appellant before the order under section 263 was passed. Care was not taken to find out from the records that the company since has converted into a limited liability partnership on January 9, 2011 was thus not in existence and so notice of hearing should have been given to Room No. 24, 3rd floor, P-103, Princep Street, which was the address of the LLP. Care was also not taken to even ascertain the last known address of the company which were available in the records. The notices to the company were not sent to or served at the last known address of the company viz. Room No. 24 , 3rd Floor, P-103, Princep Street, Kolkata-700072, from where the LLP was also functioning from January 9, 2011. Thus, we find that the appellant had no notice of the proc....
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....ure and further, as per order V, rule 20 of 1908 Code, ITO could have ordered paper publication if address of assessee was not known, in said circumstances, it could be said that no proper notice had been served on assessee and there was denial of principle of natural justice to assessee as he was not able to effectively participate in assessment proceedings and put forth his objection - Held, yes - Whether, therefore, impugned proceedings of ITO were liable to be quashed - Held, yes" (iv) Hon'ble High Court of Allahabad in the case of CIT vs Dr. Ajay Prakash in 226 Taxman 71 "Section 292BB, read with sections 148 and 282 of the Income-tax Act, 1961 - Notice - Deemed to be valid in certain circumstances (conditions precedent) - Assessment year 1998-99 - Assessing Officer issued notice to assessee under section 148 - Assessee did not appear in proceedings - Assessing Officer considered service to be sufficient are thereafter made various additions - Tribunal noted that no ice was sent on wrong address and person alleged to be a employee of assessee was not authorized to receive notice - Tribunal thus opined that presumption of service of notice under section 292BB would not be....
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....g it abundantly clear that he has not received the notice under s. 148- Therefore, there was no valid service of notice unders.148" (vii) The Cuttack Bench of Tribunal in the case of Prahalad Moharana vs ACIT in [2018] 69 taxmann.com 354 "Section Assessment143 of the Income-tax Act, 1961 - Assessment - Issue of notice (notice under section 143(2) - Assessment year 2009-10 - Where service of notice was made on a wrong person, who was not related to assessee, service of notice was not valid and assessment so made to be quashed [In favour of assessee]" (viii) The Delhi Bench of Tribunal in the case of Shri Chetan Gupta vs ACIT in 144 ITD 344 "Reassessment-Notice-Non-service of notice u/s 148-For valid assumption of jurisdiction to frame a reassessment, a proper and valid service of notice u/s 148 on assessee is mandatory requirement; violation thereof will result in quashing of the reassessment proceedings-Assessee had demonstrated that notice was issued sent at an address different than one mentioned in his return of income-Department also admits that notice was served not on assessee but on one V who according to AO was a responsible person working for group entities of assessee....
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....ted Liability partnership in the name and style of M/s. Brolly Dealcom LLP. After the conversion on 19.01.2019, the Private Limited Company is no longer existing in the eyes of law and is non est in the eyes of law as a corporate entity from 19.01.2011. This fact has been brought to the notice of the ITO, Ward-5(4) who was the AO of the erstwhile Private Limited Company (M/s Brolly Dealcom Pvt. Ltd.) (PAN: AADCB1699Q) by letter dated 16.04.2012 which has been received by the said AO on 16.04.2011[supra]. The first show cause notice of Pr. CIT is dated 18.03.2013 which is addressed to the private Limited Company in the address 16, G. C. Avenue, Kolkata-700 013 as well as 9/1, R. B. C. Road, Kolkata-700 028 and the reminder is sent after seven days on 25/26.03.2013 and the impugned order of Ld. CIT u/s. 263 was passed on 28.03.2013 not in the address of the present LLP. The scribbling on the Photostat with the incomplete address, wherein the Room No. 24, 3rd floor was not mentioned in the address of Princep Street and the fact that there was no tear off acknowledgment slip for the delivery if any of the notice at Princep address cumulatively goes on to show that no notice was deliver....