I-T - Tribunal can call for assessment record in absence of date in assessment order on which notices u/s 143(2) were issued and served on assessee: ITAT
By TIOL News Service
NEW DELHI, APRIL 14, 2018: THE ISSUE IS - Whether the Tribunal can call for the assessment record in absence of the date in the assessment order on which notices u/s 143(2) were issued by the AO and served upon the assessee. YES IS THE ANSWER.
Facts of the case:
The Assessee-company, engaged in the business of project advisory services. The Assessee had filed its return for the relevant AY within the time limit allowed for filing the return u/s 139(1). The Assessee had declared total and book loss. Subsequently, the Assessee's return was revised where there was no change in the book loss but, the loss as per the normal computation of income was revised. In the assessment proceeding, the AO noted that no manpower or technical consultant was deputed by the service provider under an agreement. Therefore, the AO believed that there was no delivery of the services to the Assessee and hence, the AO made additions on account of manpower cost for project advisory services. Further, the AO also made disallowance on account of professional fees pertaining to AY 2006-07 which was disallowed in that particular year for non-deduction of the tax and claimed by the Assessee as deduction in the current year on payment of TDS. However, the Assessee could not submit the proof of deposit of TDS the AO disallowed it. Consequently, the assessment was made at Assessee's total income where disallowance of various expenditure was made to the returned loss. On appeal, the CIT(A) dismissed the Assessee's appeal.
the Tribunal held that,
++ the AY in dispute is 2007-08. For that AY, the Assessee has filed return of income on 30/10/2007. Notice u/s 143(2) should have been served on the Assessee within 6 months from the end of the AY. Therefore, it should have been served on or before 30/9/2008. Admittedly, if this is the first notice served on the Assessee u/s 143(2), then naturally it has been issued beyond the time prescribed under the provisions of the Act. However, it is neither stated by the Counsel that this is the only notice issued by the AO u/s 143(2) and it has also been controverted by the Counsel for the Revenue that this may not be the first notice issued by the AO. This confusion has been further compounded by the fact that the AO has mentioned in the assessment order that notice u/s 143(2) has been issued by the AO and served on the Assessee;
++ however, there is no reference of any date in the assessment order that on which date such notices are issued by the AO and served on the Assessee. It is also an accepted fact that production of the assessment record by the Revenue for this appeal, which is pending since 2011, would be a cumbersome task. It is also the fact that despite repeated requests made by the Counsel for inspection of the records and even applying under The Right to Information Act 2005, his request has not been acceded to. Hence, this Tribunal is not inclined to call for the assessment record;
++ for the reason that this appeal was originally filed before the Mumbai benches and subsequently on 21/10/2016 it has been transferred to Delhi benches as per the order of the President dated 30/9/2016. Further, this appeal has been adjourned 23 times, mostly at the request of the Assessee. Admittedly, the Assessee has not raised this issue before the lower authorities. The Assessee neither raised this ground before the AO but has participated in the assessment proceedings and not before the CIT(A) in the appellate proceedings but has been raised before this Tribunal for the first time. As it has been held by the Supreme Court in case of Hotel Blue Moon that issuance of notice u/s 143(2) within the statutory time limit is a mandatory requirement and cannot be a procedural irregularity and is not a curable defect. It is further held by the P&H High Court in the case of Cebon India Ltd wherein it has been held that that absence of notice cannot be held to be a curable defect u/s 292BB. Therefore, this Tribunal set aside the additional ground raised by the Assessee to the file of the CIT (A) to decide whether notice u/s 143(2) has been issued to the assessee within the time prescribed as per the income tax act or not. The CIT(A) may also call for the remand report, if he finds it convenient, from the AO. He may also examine assessment record, if he deems fit. After such examination, he may decide the issue in accordance with the law after giving Assessee an opportunity of hearing.
(See 2018-TIOL-553-ITAT-DEL)
