M/S Josh Builders & Developers Pvt. Ltd v. The Principle Commissioner Of Income Tax-I,Chandigarh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : I. T. A. No. 119 of 2016Reserved On : September 01, 2016Pronounced On : September 09, 2016 M/s Josh Builders & Developers Pvt. Ltd. ....Appellant vs. The Principle Commissioner of Income Tax-I,Chandigarh ....Respondent CORAM : HON'BLE MR. JUSTICE S. J. VAZIFDAR, CHIEF JUSTICE.HON'BLE MR. JUSTICE DEEPAK SIBAL. * * * Present :Mr. Sanjay Bansal, Senior Advocate with Mr. Brij Mohan Monga, Advocatefor the appellant. Ms. Urvashi Dugga, Advocatefor the respondent. * * * DEEPAK SIBAL, J. : The present appeal filed under Section 260-A of the IncomeTax Act, 1961 (for short – the Act) is at the instance of the assessee andimpugns therein the order passed by the Income Tax Appellate Tribunal,Chandigarh (for short – the Tribunal). Act was issued and served upon the assessee. Though four substantial questions of law were sought to beraised in the body of the present appeal, the following two were pressed atthe time of hearing :- “(i).Whether the Hon'ble Tribunal actedillegally and perversely by misdirectingitself in law as well as on facts byreversing the order of the CIT (A) andrestoring that of the Assessing Officer whenneither notice under Section 143(2) of theAct was issued nor served, during thecourse of assessment proceedings ?(ii).Whether the Hon'ble Tribunal on the factsand in the circumstances of the case wasright in law in applying the provisions ofSection 292-BB of the Act in the case of theassessee when the notice though notproved to be issued by the Assessing Officerwas also not served on the assessee -company ?” We are of the opinion that in the order impugned before us, theTribunal has essentially decided questions of fact and that this appeal raisesno substantial questions of law for adjudication on our part. The assessee is a private limited Company and is in thebusiness of Real Estate. On 09.09.2010, a survey operation under Section133-A of the Act was carried out at the business premises of theassessee's group, during the course of which, an amount of ` 1,50,00,000/- was voluntarily surrendered by the group. Out of the aforesaid amount,` 1,00,00,000/- was surrendered by the assessee as income from business.The assessee filed its return on 30.03.2013, in which the surrenderedamount of ` 1,00,00,000/- was declared under the head 'Closing Stock' inthe credit side of its profit and loss account. However, its impact wasnullified by setting off the same against business loss of the current year. Inthe final assessment dated 31.01.2014, the Assessing Officer, being of theview that the assessee had deliberately tried to set off its undisclosedincome with intent to escape liability of paying the due taxes, added thevoluntarily surrendered amount of ` 1,00,00,000/- to its income for therelevant Assessment Year. The assessee challenged the assessment before theCommissioner of Income Tax (Appeals)-2, Chandigarh (for short – theCommissioner). It was submitted by the assessee that the assessment wasrequired to be annulled for want of any valid notice under Section 143(2) ofthe Act, issued and served on the assessee preceding such assessment. Aftertraversing the record, the Commissioner was of the view that a notice dated28.09.2012 under Section 143(2) of the Act, which had been issued to theassessee was invalid, as the same had been issued prior to the filing of thereturn. Another notice dated 27.11.2013, which had been issued to theassessee being beyond the time prescribed under proviso to Section 143(2)(ii) of the Act, was also held to be invalid. The Commissioner further foundthat another notice dated 20.08.2013 under Section 143 (2) of the Act hadMonika2016.09.09 15:35I attest to the accuracy andauthenticity of this document been issued to the assessee by the Assessing Officer, but on the ground thatthere was no evidence of service of this notice upon the assessee, as alsofinding no reference of the same in the assessment order, allowed theassessee's appeal and ordered the annulment of the assessment impugnedbefore him. The Revenue, being aggrieved by the aforesaid order by theCommissioner, laid a challenge to the same by way of an appeal before theTribunal, where the Revenue not only produced a copy of the notice dated20.08.2013 issued under Section 143(2) of the Act, but also produced recordin the shape of Speed Post entries and the Dispatch Register of theDepartment to prove service of the above-said notice upon the assessee. Itwas further submitted that the assessee had, at no point of time during theassessment proceedings, raised any objection with regard to non-service ofnotice, and therefore, in view of the provisions of Section 292-BB of theAct, the assessee could not raise the issue of non-service of notice dated20.08.2013 upon him and on the basis thereof, seek annulment of theassessment proceedings. The Tribunal, while agreeing with the Commissioner that thenotices dated 28.09.2012 and 27.11.2013 were invalid, after accepting theabove-referred submissions raised on behalf of the Revenue and relyingupon the provisions of Section 292-BB of the Act, reversed the findings ofthe Commissioner with regard to annulment of the proceedings, afterholding that the notice dated 20.08.2013 was valid. Since the CommissionerMonika2016.09.09 15:35I attest to the accuracy andauthenticity of this document had decided the appeal of the assessee only on this issue, the matter wasremanded to the Commissioner to adjudicate upon the appeal on merits. It can thus be seen that the notice dated 20.08.2013 wasdeclared by the Tribunal to be a valid notice by recording findingsessentially based on facts produced before it, which included Speed Postentries, copies of the Dispatch Register of the Department and the actualnotice dated 20.08.2013 issued under Section 143 (2) of the Act. Theassessee, having not raised any objection with regard to issuance andservice of a valid notice during the assessment proceedings and rather,without any objection, having voluntarily taken part in such proceedings,were facts, which were also considered and held against the assessee. It wasfurther observed that even the Commissioner had recorded that the noticedated 20.08.2013 duly existed in the assessment records and qua thisfinding of the Commissioner, the assessee had not filed any appeal or cross-objection. After arriving at a conclusion that the aforesaid notice had beenissued, reliance was placed upon the provisions of Section 292-BB of theAct to ultimately reject the case set up by the assessee. Section 292-BB of the Act reads as under :- "292BB. Notice deemed to be valid in certain—circumstances.Where an assessee hasappeared in any proceeding or cooperated in anyinquiry relating to an assessment or reassessment,it shall be deemed that any notice under anyprovision of this Act, which is required to beserved upon him, has been duly served upon him in time in accordance with the provisions of thisAct and such assessee shall be precluded fromtaking any objection in any proceeding or inquiryunder this Act that the notice was — (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised suchobjection before the completion of suchassessment or reassessment." Learned senior counsel appearing on behalf of the assessee in time in accordance with the provisions of thisAct and such assessee shall be precluded fromtaking any objection in any proceeding or inquiryunder this Act that the notice was — (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised suchobjection before the completion of suchassessment or reassessment." Learned senior counsel appearing on behalf of the assessee drew our attention to the Dispatch Register to show that in the same, entryNo. 6018 had been allotted to notices under Section 143 (2) and 142 (1) ofthe Act, both of which were dated 20/22.08.2013. It was submitted that thesame number could not have been allotted to two different notices issuedunder two different provisions. It was further submitted that only the noticeunder Section 142 (1) of the Act bearing Sr. No. 6018 had been received bythe assessee and not the notice under Section 143 (2) of the Act, as soughtto be projected by the Revenue. It was thus submitted that the notice dated20.08.2013 issued under Section 143 (2) of the Act, which was relied uponby the Revenue, had been fabricated only to validate the assessmentproceedings. It is true that the same number in the Dispatch Register hasbeen allotted to both the notices, but that cannot lead to a conclusiveMonika2016.09.09 15:35determination that two notices, under different provisions of the Act, to theI attest to the accuracy andauthenticity of this document same assessee cannot be dispatched under the same number, especiallywhen the Tribunal, after going through the Dispatch Register, has factuallydetermined the issue against the assessee. Learned senior counsel for the assessee further submitted thatthe findings recorded by the Tribunal that no objection had been taken bythe assessee before the Assessing Officer with regard to issuance of aninvalid notice is wrong as such objection had specifically been taken in thereply submitted by the assessee during the assessment proceedings. We have gone through the reply submitted by the assesseebefore the Assessing Officer. The relevant portion of the same reads asunder :- “...Further this is to inform your good self that theassessee has filed the return on 30.03.2013therefore the notice issued u/s 143(2) before30.03.2013 is invalid.”assessee has filed the return on 30.03.2013therefore the notice issued u/s 143(2) before30.03.2013 is invalid.” A perusal of the afore-quoted response only shows that theobjection so raised by the assessee before the Assessing Officer was that thenotice issued under Section 143(2) of the Act before 30.03.2013 wasinvalid. Thus, such objection was taken only with regard to the earlierrefused notice dated 28.09.2012 and cannot be taken to be an objection toany notice issued after the filing of the return by the assessee including thenotice dated 20.08.2013. From the above, it is abundantly clear that the Tribunal hasessentially determined questions of fact. The conclusion being a possible view cannot be termed as perverse. Therefore, we are disinclined tointerfere in the present appeal and resultantly, order dismissal of the same. Whether speaking/reasoned ? Whether reportable ? Yes/No. Yes/No. ( S. J. VAZIFDAR ) CHIEF JUSTICE September 09, 2016monika ( DEEPAK SIBAL )JUDGE