The Commissioner Of Income Tax – 7, Mumbai v. Virendra Kumar Agarwal

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2429 OF 2009 The Commissioner of Income Tax – 7, Mumbai ......Appellant.VersusVirendra Kumar Agarwal............Respondent. Ms.Suchitra Kamble for the appellant. Mr.Vipul B. Joshi with Mr.Sameer G. Dalal for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 7[th] January, 2010. P.C. : 1.The following questions of law have been framed in the appeal filed by the revenue against the judgment of the Income Tax Appellate Tribunal dated 16[th] September 2008. i)Whether on the facts and circumstances of the case and in law, the ITAT was correct in holding the assessment u/s.143(3) of the Income Tax Act, 1961 completed on 31-3-2003 to be invalid, illegal, null and void and bad in law being a jurisdictional defect because the notice u/s.143(2) was issued on 31-10-2001 but was served on the assessee on 6-11-2001 i.e. beyond the period of twelve months from the end of the month in which the return was filed and thus the notice u/s.143(2) was time barred ? ii)Whether on the facts and circumstances of the case and in law, the ITAT was correct in canceling the assignment ignoring the fact that a new section 292BB was inserted by the Finance Act, 2008 w.e.f. 1-4-2008 according to which any notice will deemed to be served upon the person concerned and within the stipulated time period unless the assessee takes objection before completion of assessment or reassessment and being procedural amendment, it is applicable in respect of all proceeding including those before other authorities ? 2.The assessee filed a return of income on 20[th] October 2000 for assessment year 2000-2001. At the relevant time, the proviso to sub-section (2) of Section 143 of the Income Tax Act, 1961 stipulated that a notice as prescribed shall be served on the assessee before the expiry of twelve months from the end of the month, in which the return of income is furnished. Admittedly in the present case the notice was issued on 31[st] October 2001 which was within time. However, it was servedon the assessee on 6[th] November 2001, beyond the period of twelve months after the filing of the return by the assessee. In the circumstances, the Tribunal was correct in coming to the conclusion that since the notice was not served within the period prescribed by law, the assumption of jurisdiction by the Assessing Officer was invalid. In the circumstances, the first question would have to be answered against the revenue. 3.On the second question, the revenue has relied upon the provisions of Section 292BB in order to contend that where an assessee has appeared in any proceeding or has co-operated in any inquiry relating to an assessment or re-assessment, it shall be deemed that any notice under any provision of the Act, which is required to be served upon him has been duly served. In such a case the assessee is precluded from taking an objection that the notice was not served upon him in time. The provisions of Section 292BB were inserted by Finance Act of 2008, with effect from 1[st] April 2008. In the circumstances, the provisions of Section 292BB will have no application to the assessment year in question viz. 2000-2001. In these circumstances, there is no merit in the second submission in the facts of this case. 4.The Appeal does not raise any substantial question of law and is accordingly dismissed. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)