Case Law Details
Alok Mittal Vs. Dy. CIT (ITAT Kolkata)
Provisions of section 292BB are applicable where there is a failure to serve the notice and not where there is a failure to issue the notice under section 143(2). He has contended that the issuance of notice under section 143(2) before completing the assessment is a statutory requirement as held by the Hon’ble Supreme Court in the case of Asstt. CIT v. Hotel Blue Moon (2010) 321 ITR 362 and the failure to issue notice under section 143(2) in compliance with such statutory requirement is not covered under section 292BB. In support of this contention, he has relied on the decision of the Hon’ble Allahabad High Court in the case of Asstt. CIT v. Greater Noida Industrial Development Authority (IT Appeal No. 142 (All.) of 2015, dt. 4-8-2015), wherein it was held that the deeming fiction under section 292BB of the Act is with regard to “service of notice” and since the initial requirement of “issuance of notice” was not met by the assessing officer, the deeming fiction under section 292BB is not applicable. It was held that there was a defect on the part of the assessing officer in failing to issue notice under section 143(2) within the specified period and since the said defect was not curable under section 292BB, the order of assessment passed by the assessing officer was bad in law. The learned Counsel for the assessee has also relied on the decision of the Hon’ble Delhi High Court in the case of Pr. CIT v. Shri Jay Shiv Shankar Traders (P.) Ltd. (2016) 383 ITR 448 wherein it was held that the provision of section 292BB would apply in so far as failure of “service” of notice is concerned and not with regard to failure to “issue” notice. It was held that the failure of the assessing officer to issue notice under section 143(2) prior to finalizing the reassessment order, therefore, cannot be condoned by referring to section 292BB of the Act” and such failure is fatal to the order of reassessment. The learned Counsel for the assessee has also placed reliance on the decision of the Honorable Kerala High Court in the case of Travancore Diagnostic (P.) Ltd. v. Dy. CIT (2017) 390 ITR 167, wherein it was held that if a notice under section 143(2) has not been issued, the assessing officer cannot claim the benefit under section 292BB of the Act and in the absence of notice under section 143(2), proceedings of assessment initiated, conducted and completed for the assessment year 2009-10 will have to fail.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal filed by the assessee is directed against the order of learned Commissioner (Appeals), Durgapur dated 20-1-2017.
2. The assessee in the present case is an individual, who is carrying on the business as share sub-broker. He also derives income from commission as Insurance Agent and rental income from commercial properties. The return of income for the year under consideration was filed by him on 26-9-2008 declaring total income of Rs. 14,84,171. In the assessment originally completed under section 143(3) vide order dated 19-11-2010, the total income of the assessee was determined by the assessing officer at Rs. 15,78,000. On the basis of AIR information, the said assessment was subsequently reopened by the assessing officer and a notice under section 148 was issued by him to the assessee after recording the reasons. In pursuance of the said notice, assessment under section 143(3)/147 was completed by the assessing officer vide an order dated 29-2-2016 determining the total income of the assessee at Rs. 35,93,080 after making the addition of Rs. 20,15,083 on account of undisclosed income. Against the order passed by the assessing officer under section 143(3)/147, an appeal was preferred by the assessee before the learned Commissioner (Appeals) and since the submissions made by the assessee in support of his case on the issues raised in the said appeal were not found acceptable by him, the learned Commissioner (Appeals) upheld the order of the assessing officer passed under section 143(3)/147 and dismissed the appeal of the assessee.
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