Raisuddun, New Delhi vs Assessee

Revenue by : Shri Vikram Sahay, Sr.DR. Assessee by : Shri Ashwani Taneja and Shri Tarun Kumar, Advocates.

Date of hearing : 08.04.2015 Date of pronouncement : 06.05.2015

ORDER

PER G.C. GUPTA, GUPTA, VP :

The appeal by the Revenue and the cross-objection by the assessee for the assessment year 2008-09 are directed against the

2 ITA-3622/Del/2013 & C.O.27/Del/2014

order of learned CIT(A), Ghaziabad dated 14th March, 2013. These are being disposed of by this consolidated order.

Assessee's Cross-

Cross-Objection No.27/Del/2014 :-

:-

2. The grounds raised by the assessee in his cross-objection are as under:-

"1. That having regard to the facts and circumstances of the case, ld.CIT(A) has erred in law and on facts in not quashing the impugned assessment order which was framed by ld.AO without issuing/serving the mandatory notice u/s 143(2) within the stipulated time as per law.

2. That in any case and in any view of the matter, impugned order passed by ld.AO u/s 147 is bad in law and against the facts and circumstances of the case."

3. The learned counsel for the assessee submitted that in this case, the mandatory notice under Section 143(2) of the Income-tax Act, 1961 was not issued within the stipulated time as per law and, therefore, the impugned assessment order is bad in law and the same is liable to be cancelled. He referred to page 58 of the learned CIT(A)'s order wherein this legal ground has been taken by the assessee and the learned CIT(A) has summarily rejected the same by referring to the provisions of Section 292BB of the Act. He submitted that the provision of Section 292BB takes care of certain defects in the notice issued to the assessee and could not cure the defect where no notice under Section 143(2) was issued to the assessee and the assessment was completed on the basis of notice issued under Section 148 of the Act. He relied on the decision of Delhi Tribunal in the case of Rimmels International Pvt.Ltd. Vs. ITO in ITA No.2596/Del/2013 dated 4th March, 2015 in support of his case.

3 ITA-3622/Del/2013 & C.O.27/Del/2014

4. Learned DR has opposed the submissions of the learned counsel for the assessee. He submitted that the CIT(A) has passed a well- reasoned speaking order on this issue. The notice under Section 147 was duly issued to the assessee and served on him. Moreover, the newly introduced provision of Section 292BB provides that the entire assessment could not be said to be nullity when the assessee has appeared during assessment proceedings and his submissions have been considered. He referred to the relevant portion of the CIT(A)'s order on this issue.

5. We have considered the rival submissions and have perused the order of the Assessing Officer and the learned CIT(A). We find that the Revenue could not demonstrate that any notice under Section 143(2) of the Act was issued to the assessee. The issuance of notice under Section 143(2) of the Act is mandatory in nature and has to be issued within the stipulated time as per law. In the absence of any issuance of notice under Section 143(2), the impugned assessment framed in this case could not be sustained as per law. The provision of Section 292BB inserted with effect from 1.4.2008 would not help the case of the Revenue as the issue of non-issuance of notice under Section 143(2) goes to the root of the jurisdiction being assumed by the Assessing Officer for completing the assessment and would not cure the defect of non-issuance of mandatory notice under Section 143(2) of the Act before the assessment is completed. In the absence of any material brought on record to suggest that the department has issued/served notice under Section 143(2) within the stipulated time as per law before the completion of the assessment, we are unable to sustain the impugned assessment order and the same is cancelled.

4 ITA-3622/Del/2013 & C.O.27/Del/2014

Accordingly, the grounds of the cross-objection of the assessee are allowed.

ITA No.3622/Del/2013 - (Revenue's appeal) :- :-

6. The grounds of appeal of the Revenue are as under:-

"1. That the ld.CIT(A) has erred in law and on facts and circumstances of the case, by deleting the addition of Rs.38,90,000/- without appreciating the evidences elaborately discussed by the AO.

2. That the ld.CIT(A) has erred in law and on facts, in not appreciating that the Tahsildar (Revenue Authority of the State Government) has categorically mentioned in his report that the value of the property is approx. Rs.1.20 crore, and the proceeding of under valuation of stamp duty have also been initiated.

3. That the ld.CIT(A) has erred in law and on facts and circumstances of the case, in ignoring the statement of the Bank Manager recorded during assessment proceedings.

4. Circumstantial evidences prove that the payment was made by the assessee. The witness of purchase deed Shri Gulzar and Shri Gaffar in their statement have said that the purchasers have made payment of Rs.1,00,00,000/- to seller Shri Intezar Ali (Rs.7,00,000/- by DD and Rs.93,00,000/- in cash) at the time of registry. Bank pay in slip dated 12/13.11.2007 shows late hour deposit of Rs.90,00,000/- Hon'ble ITAT in its decision in the case of seller Shri Intezar Ali in ITA No.1657/Del/2012 dated 08.03.2013 has mentioned the above facts. Hence order of the ld.CIT(A) deserves to be reversed/set aside and the order of the AO may be restored.

5. That the ld.CIT(A) has erred in law and on facts and circumstances of the case, by deleting the addition of Rs.10,00,000/- on account of unexplained loan taken from Shri Chaman Lal."

5 ITA-3622/Del/2013 & C.O.27/Del/2014

7. In view of our allowing the cross-objection filed by the assessee for the relevant assessment year 2008-09 while disposing of the cross- objection of the assessee No.27/Del/2014 in the foregoing paragraphs of this order and holding that the assessment was not legal since framed without issuance of notice under Section 143(2) of the Act and in view of the fact that the assessment itself has been cancelled, we hold that the grounds of appeal of the Revenue could not be sustained and are accordingly dismissed.

8. In the result, the cross-objection of the assessee is allowed and the appeal of the Revenue is dismissed.

Decision pronounced in the open Court on 6th May, 2015.

Sd/- Sd/- (INTURI RAMA RAO) RAO) (G.C. (G.C. GUPTA) GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT

VK.

Copy forwarded to: -

1. Appellant : Income Tax Officer, Ward- Ward-2(2), Ghaziabad.

2. Respondent : Shri Raisuddin, S/o Shri Imamuddin, Village- Village-Piplera, Post-

Post-Mussorie, District Ghaziabad.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar