|CORAM:||George George K (JM), T. S. Kapoor (AM)|
|SECTION(S):||143(2), 147, 292BB|
|CATCH WORDS:||Additional Ground, Cross-Objection, Non-issue of s. 143(2) notice, Reopening, Void|
|COUNSEL:||Raj Kumar Gupta|
|DATE:||September 26, 2014 (Date of pronouncement)|
|DATE:||October 4, 2014 (Date of publication)|
|AY:||2008-09, 2005-06, 2006-07, 2007-08|
|FILE:||Click here to download the file in pdf format|
|Non-issue of s. 143(2) notice renders s. 147 assessment void. S. 292BB does not apply. If there is a conflict of judicial opinion, the view in favour of the assessee must be taken. Respondent can raise an additional ground in a Cross-Objection|
(i) Now, the moot question for consideration is: Whether the non-issuance of a notice u/s 143(2) of the Act as alleged by the assessee-firm had vitiated the conclusion of the assessments u/s 147 read with s. 143(3) of the Act? On receipt of information from the DIT (Inv), Jaipur that there were alleged bogus purchases resorted to by the assessee firm, the AO had re-opened the assessments of the assessee for the assessment years under dispute by issuance of notices u/s 148 of the Act. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued to the assessee. In the reassessment proceedings, after having considered
the asssessee’s submissions, the AO had concluded the re-assessments making certain additions. While doing so, however, no notices u/s 143(2) of the Act were issued to the assessee, even though notice u/s 142(1) of the Act was ordered to be issued on 14.11.2011.
(ii) It is, therefore, explicit that there is always a requirement of issuing of a notice u/s 143(2) of the Act in a case of an assessment u/s 147 of the Act. Relaxation has been given for issuance of such a notice where a notice u/s 148 was issued between 1.10.1991 to 30.9.2005. In other words, notice issued u/s 148 of the Act on or after 1.10.2005; a notice u/s 143(2) has to be issued within the time stipulated in 143(2) of the Act.
(iii) Further, the provisions of s. 292BB of the Act are not applicable in the case of non-issuance of a notice u/s 143(2) of the Act. For this proposition, we refer to the (i) judgment of the Hon’ble Gujarat High Court in the case of CIT v. K.M.Ravji [Tax Appeal No.771/2010 dated 18.7.2011 wherein the Hon’ble High Court has held that “Section 292 BB does not save non-issuance of Notice before the expiry of limitation period. In our view, section 292 BB can cure only a defect in service, service within time, or improper service of notice. It is not aimed at curing the defect of non-issuance of notice within the statutory period.”
(iv) Further, we notice that there is a judgment of Hon’ble jurisdictional High Court in favour of the revenue, namely, CIT v. Madhya Bharat Energy Corporation Ltd reported in (2011) 337 ITR 389 (Del) which states that the non issuance of notice u/s 143(2) does not vitiate the assessment. However, there are also two subsequent judgments of Hon’ble jurisdictional High Court directly in favour of the assessee, as regards the service of notice u/s 143(2). The Hon’ble H.C. held that service of notice u/s 143(2) is mandatory.
(v) The Hon’ble Guwahati High Court in CIT v. Purbanchal Parbahan Gosthi (1998) 234 ITR 663 (Gau) has stated that there is no distinction between an appeal and a cross objection except for the time limit for filing the appeal being 120 days and that of CO being 30 days. Therefore, the learned DR’s objection that even a pure question of law cannot be taken up in a cross objection is without any merit.