HIGH COURT OF DELHI
Commissioner of Income-tax V/s. Vision Inc.
IT Appeal NOS. 1142 of 2009 AND 64 of 2010
MAY 25, 2012
JUDGMENT
R.V. EASWAR, J.
These are two appeals filed by the Revenue under Section 260A of the Income Tax Act, 1961 (‘Act’, for short) for the assessment year 2003-04. The reason why there are two appeals by the Revenue for the same assessment year is this. In the appeal filed against the assessment order, the assessee questioned the validity of the assessment order as also the additions made therein on merits. The CIT (Appeals) upheld the validity of the assessment order, but allowed substantial relief to the assessee on merits. Against the order of the CIT (Appeals) the Revenue preferred an appeal on merits to the Income Tax Appellate Tribunal (‘Tribunal’, for short) in ITA No. 3339/Del/2007. Against the decision of the CIT (Appeals) on the validity of the assessment order, the assessee preferred CO No. 115/Del/2008 before the Tribunal. The Tribunal took up the cross objections filed by the assessee first since it went to the root of the matter and decided the validity of the assessment order in favour of the assessee, thus allowing the cross objections. In view of this decision, the Tribunal thought it unnecessary to adjudicate upon the appeal filed by the Revenue which was formally dismissed. A common order was passed by the Tribunal on 13.02.2009. The Revenue has preferred two appeals under Section 260A before us for this reason, namely, that the assessment has been held to be invalid as also because its appeal on merits has been dismissed by the Tribunal as a consequence. Though two appeals have been filed, the fundamental question arises in ITA No. 1142/2009 which has been filed against the decision of the Tribunal in CO No.115/Del/2008.
2. On 16.05.2012, the following substantial question of law was framed by us.
“Whether the Income Tax Appellate Tribunal was right in quashing the assessment proceedings on the ground that the respondent-assessee was not served with any notice under Section 143(2) of the Income Tax Act, 1961, within the statutory period prescribed by the proviso to the said Section?”
3. The brief facts giving rise to the aforesaid substantial question of law are these. The assessee is a partnership firm consisting of two partners namely Manoj Gupta and his wife Shallu Gupta. It filed a return of income on 02.12.2003 for the assessment year 2003-04 for which the previous year ended on 31.03.2003. The income declared in the return was Rs. 7,83,554/-. The return was processed on 01.03.2004 under Section 143(1)(a) of the Act. Subsequently it was taken up for scrutiny and accordingly a notice under Section 143(2) was issued on 30.12.2004. Since the dispute centres around the service of this notice upon the assessee, we shall for the present keep aside the question whether it was served upon the assessee. Suffice to note that pursuant to notice issued on 12.09.2005 under Section 142(1) and several notices issued thereafter, the assessee actively participated in the assessment proceedings and partly furnished the details, documents and information called for by the Assessing Officer. The relevant dates of hearing and the remarks, datewise, as to what happened on those hearings have been re-produced in the assessment order. The Assessing Officer observed therefrom that the case was posted for hearing seventeen times and only on seven times details were furnished, that too partly and on the rest of the occasions nobody attended the hearing or filed any details.
4. The assessment proceedings ultimately resulted in an assessment order passed under Section 143(3) read with Section 144 of the Act on 31.03.2006. The total income assessed was Rs. 8,51,12,030/-. This consisted of the following items: –
