ITA No.1306/D/2011
AY: 2006-07
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES `A' NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT
AND
SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER
ITA NO.1306/DEL/2011
Asstt.Year: 2006-07
Dy.Commissioner of Income Tax, vs Shri Vijay Kumar Aggarwal,
Central Circle-12, New Delhi. J-83, Extension, Guru Ramdas Nagar,
Laxmi Nagar, Delhi.
(Appellant) (Respondent)
Appellant by: Smt. A. Mishra, CIT DR
Respondent by: Shri Rajiv Saxena, Adv.
O R D E R
PER CHANDRAMOHAN GARG, J.M.
This appeal has been preferred by the revenue against the order of the
CIT(A)-I, New Delhi dated 14.12.2010 in Appeal No. 347/07-08 for AY 2006-
07.
2. The grounds raised by the revenue read as under:-
"1. The order of the Ld. CIT (A) is not correct in law
and facts.
2. In the facts and circumstances of the case, Ld. CIT (A) has
erred in law and on facts in holding the assessment order void
ab initio for failure to issue notice under section 143(2) of
Income Tax Act, 1961 within stipulated time whereas it was
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AY: 2006-07
beyond control of the AO to issue such notice within such time
when case was centralized and transferred to him.
3. In the facts and circumstances of the case, Ld. CIT (A) has
erred in law and on facts in holding the assessment order void
ab initio for failure to issue notice under section 143(2) of
Income Tax Act, 1961 within stipulated time whereas the
assessee did not object to the assessment proceedings and did
not raise this ground before Learned CIT (A) until 11.02.2010
and therefore, such defect is curable by invoking provisions of
section 292 BB of Income Tax Act, 1961.
4. In the facts and circumstances of the case, Ld. CIT (A)
has erred in law and on facts in holding the assessment order
void ab initio on account of procedural irregularity of not
issuing notice under section 143(2) within stipulated time
whereas such irregularity was removed once the case was
remanded by Ld. CIT (A) to the AO.
5. In the facts and circumstances of the case, Ld. CIT (A)
has erred in law and on facts in holding the assessment order
void ab initio in the AO required the assessee and allowed
opportunity to produce or cause to be produced evidence in
support of particulars shown in return of income within the
meaning of section 143(2) during Assessment proceedings and
such procedural deficiency being curable under section 292
BB of Income Tax Act, 1961. "
3. We have heard arguments of both the sides and carefully perused the
relevant material placed on record before us. Ld. DR submitted that in the facts
and circumstances of the case, the first appellate authority has grossly erred in
holding that the assessment order is void ab initio for failure to issue notice u/s
143(2) of the Income Tax Act within stipulated time whereas it was beyond
control of the AO to issue notice within such time when all the relevant cases
were centralised and transferred to him for further proceedings. Ld. DR further
contended that the CIT(A) grossly erred in holding that the assessment order is
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AY: 2006-07
void ab initio as notice under section 143(2) of the Act was not issued within
stipulated prescribed limits whereas the assessee did not object during the
assessment proceedings and did not raise this ground before the CIT(A) until
10.02.2010 and, therefore, such defect was curable by invoking provisions of
section 292BB of the Act.
4. Ld. DR further contended that the CIT (A) also erred in law and on facts
in holding the assessment order void ab initio on account of procedural
irregularity which was removed once and the case was remanded by ld. CIT (A)
to the AO. Ld. DR vehemently contended that since the AO allowed the
opportunity to produce or cause to be produced evidence in support of
particulars shown in the return of income within the meaning of section 143(2)
of the Act during assessment proceedings and such procedural deficiency was
very well curable u/s 292BB of the Act. Ld. DR finally prayed that the
impugned order may be set aside by restoring that of the AO.
5. Replying to the above, ld. Counsel of the assessee has drawn our attention
towards operative para at page 13 of the impugned order and submitted that as
per decision of Hon'ble Supreme Court in the case of ACIT vs Hotel Blue
Moon (2010) 321 ITR 362 (SC), if an assessment has to be completed u/s
143(3) r/w section 158BC of the Act, then notice u/s 143(2) should be issued
within one year from the date of filing of the block return. Ld. Counsel further
submitted that omission on the part of the assessing authority to issue notice u/s
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AY: 2006-07
143(2) of the Act cannot be a procedural irregularity and is not curable,
therefore, the requirement of section 143(2) cannot be dispensed with.
Supporting the impugned order, ld. Counsel of the assessee also contended that
omission on the part of AO to issue notice u/s 143(2) of the Act within
prescribed time cannot be held as procedural irregularity which is not curable
u/s 292BB of the Act.
6. On careful consideration of above submissions, we note that the CIT(A)
allowed relief for the assessee with following observations, findings and
conclusion:-
" In regards to the service of notice beyond the time allowed
under proviso to section 143(2) the appellant had relied on the
judgment of Hon'ble Supreme Court in the case of ACIT Vs
Hotel Blue Moon 321 ITR 362 (2010). In the said judgment the
Hon'ble Supreme Court observed that omission on the part of
the assessing authority to issue notice u/s 143(2) cannot be
procedural irregularity and the same is not curable and
therefore the requirement of notice under section 143(2)
cannot be dispensed with. The court further observed "even for
purposes of chapter XIVB of the Act for determination of
undisclosed income for a block period under the provisions of
section 158BC, the provision of section 142 and sub section 2
and 3 of section 143 are applicable and no assessment could
be made without issuing notice u/s 143(2) of the Act. In view of
the above judgment of the Hon'ble Supreme Court the
contention of the AO in the remand report that the non issue of
notice u/s 143(2) in time is only procedural defect which is
curable is not tenable as per law. From the facts of the case it
is undisputed that the notices u/s 143(2) should have been
issued and served on or before 30.6.2007 as the return of
income for the relevant AY 2006-07 was filed on 15.6.2006 but
the same was issued only on 12.11.2007 and served on
14.11.2007 which is clearly beyond the time allowed as per the
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proviso of section 143(2). In view of the above facts and law I
have no alternative but to allow the appeal of the appellant on
this issue that the assessment made without the notice u/s
143(2) in time was ab initio".
7. At the outset, we respectfully take notice of the decision of Hon'ble Apex
Court in the case of ACIT vs Hotel Blue Moon (supra) wherein it was held that
omission on the part of AO to issue notice u/s 143(2) of the Act cannot be a
procedural irregularity and the same is not curable and hence, the requirement
of notice u/s 143(2) of the Act cannot be dispensed with. However, ld. Counsel
of the assessee has pointed out that section 292BB has been inserted by Finance
Act, 2008 and the same is effective from 1.4.2008 only, therefore, the said
section is not applicable in the case of assessee for AY 2006-07 the assessment
of which was completed on 28.12.2007. Ld. DR has not disputed this fact on
the legal proposition that section 292BB was inserted by Finance Act 2008
w.e.f. 1.4.2008. Thus, we are of the considered opinion that the said section is
not applicable to the present case pertaining to AY 2006-07 wherein assessment
was completed on 28.12.2007.
8. Turning to the facts and circumstances of the present case, we note that
undisputedly, notice u/s 143(2) of the Act should have been issued and served
on or before 30.6.2007 as the return of income for the relevant AY 2006-07 was
filed on 15.6.2006 but the same was issued on 12.11.2007 and served on
14.11.2007 and the same was issued and served beyond the prescribed time
limit as per proviso to section 143(2) of the Act. In this situation, we reach to a
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logical conclusion that the CIT(A) was right in holding that section 292BB of
the Act is not applicable to the present case and omission on the part of AO to
issue notice u/s 143(2) of the Act within prescribed time limit is not a
procedural irregularity and the same is not curable, therefore, the CIT(A) was
justified in holding that the assessment made without notice u/s 143(2) of the
Act within prescribed limit was void ab initio. Consequently, we uphold the
findings and conclusion of the CIT(A) and, therefore, factual and legal grounds
no. 2 to 5 of the revenue being devoid of merits are dismissed.
9. In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 30.1.2015.
Sd/- Sd/-
(G.D. AGRAWAL) (CHANDRAMOHAN GARG)
VICE PRESIDENT JUDICIAL MEMBER
DT. 30th January, 2015
`GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. C.I.T.(A)
4. C.I.T. 5. DR
By Order
Asstt. Registrar
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