Income Tax Appellate Tribunal - Lucknow
Mohd. Khaliq, Lucknow vs Department Of Income Tax on 26 May, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH 'A' : LUCKNOW
BEFORE SHRI H. L. KARWA, HON'BLE VICE PRESIDENT
AND SHRI N. K. SAINI, ACCOUNTANT MEMBER
I.T.A. No.520/Lkw/10
Assessment Year: 07-08
Income Tax Officer-3(2), Vs. Mr. Mohd. Khaliq,
Lucknow. 529-Ka-205,
Old Khurram Nagar,
Lucknow.
PAN:AGZPK4947P
(Appellant) (Respondent)
C.O. No.40/Lkw/10
(in I.T.A. No.520/Lkw/10)
Assessment Year: 07-08
Mr. Mohd. Khaliq, Vs. Income Tax Officer-3(2),
Lucknow. Lucknow.
(Objector) (Respondent)
Revenue by : Shri Anadi Verma, D. R.
Assessee by: Shri Amit Shukla, Advocate
ORDER
PER N. K. SAINI:
The appeal by the Department and the Cross Objection by the assessee are arising out of the order dated 26/05/2010 of the CIT(A)-I, Kanpur relating to assessment year 2007-2008. In the Departmental appeal in I.T.A. No.520/Lkw/10, following grounds have been raised:2
"1. The Ld. CTT(A) has erred in law and facts in deleting the addition of `4,75,456/- on account of unexplained investment in construction of building. The source of investment submitted before Ld. CIT(A) were never furnished before the A.O. The Ld. CIT(A) erred in admitting additional evidence without recording reasons in writing for its admission in contravention to the provisions of Rule 46A of I.T. Rules.
2. The Ld. CIT(A) has erred in law and facts in deleting additions of `6,57,493/- and `80,000/- by treating them as agriculture income against the business income treated by A.O. The Ld. CIT(A) failed to appreciate the (Khasara) report of Lekhpal wherein growing of potato, cucumber, watermelon and melon was denied.
3. The Ld. CIT(A) has erred in law and facts in deleting the amount of `6,77,600/- on account of unexplained advances received by holding that transactions are genuine and routed through bank A/c. Ld. CIT(A) failed to appreciate that identity and genuineness of transactions remained unexplained before the A.O.
4. Any other ground that may arise or becomes incidental during the pendency of appeal."
2. In assessee's C.O. No.40/Lkw/10, following grounds have been raised:
"1.1 BECAUSE the CIT(A) has erred in law and on facts in confirming the addition of sums aggregating `3,95,000/- out of `5,87,000/- appearing as liability in the balance sheet towards advance received from various persons for purchase of plots as non-genuine, without appreciating the facts and material on record.
1.2 BECAUSE it is undisputed fact that the assessee was a commission agent, facilitating various persons for the purchase of plots from the land owners and the advance received from such purchasers were through account payee 3 cheques drawn on their respective bank account could not have been treated as non-genuine and the onus that lay upon the appellant, was fully discharged and no adverse inference could have been drawn by the authorities below simply because these persons were not found on the address given by the assessee.
2.1 BECAUSE the Grounds of Appeal No.1 as taken by the Revenue (Assessing Officer) in memo of appeal, with regard to addition of `4,75,456/- on account of unexplained investments in the construction of building, that CIT(A) has erred in admitting the additional evidence in violation of Rule 46A of I.T. Rules, is wholly erroneous as no such additional evidence on this issue was furnished before the CIT(A), but it was only explained to him the source of investment from the entries appearing in the books of account produced before the Assessing Officer.
2.2 BECAUSE the power of the CIT(A) are co-terminus with that of the Assessing Officer and in exercise of such power, he has himself verified the sources of investments in the construction of the building from the books of account and other relevant record that were produced before the Assessing Officer and after appreciating the explanation and the material on record, he has rightly given the relief of `4,75,456 and the ground taken by the department that there is violation of Rule 46A is wholly erroneous in law and on facts.
3. BECAUSE the Ld. CIT(A) has erred in law and on facts in confirming the addition of `12,800/- on account of purchase of water pump without appreciating that the appellant has sufficient cash balance and the source to prove such purchase.
4. BECAUSE the Ld. CIT (A) has erred in law in holding that the validity of service of notice under section 143(2) could not be challenged before him without appreciating that the appellate stage is continuation of the assessment proceedings and same can be raised at appellate stage."4
3. First we will deal with the assessee's Cross Objection. Both the parties argued the ground No. 4 at the first instance which is on legal issue and relates to the validity of service of notice u/s 143(2) of the I.T. Act.
4. The facts related to this issue, in brief, are that the assessee filed his return of income declaring an income of `1,30,240/- and agricultural income of `9,19,972/-. The case was selected for scrutiny and the notice u/s 143(2) dated 29/09/2008 was issued and sent by Speed Post receipt No. EU9480130871N to the assessee. the Assessing Officer framed the assessment at an income of `26,62,724/- by making the various additions.
5. The assessee carried the matter to learned CIT(A) and challenged the validity of the assessment order on the ground of non service of notice u/s 143(2) of the I.T. Act within a period of 12 months as required under the proviso to section 143(2)(ii) of the I.T. Act and submitted to the learned CIT (A) that the case of the assessee was selected for scrutiny vide notice dated 29/09/2008 u/s 143(2) of the I.T. Act which was sent through Speed Post on the address "Shri Mohd. Khalik, 9/13, Vikas Nagar, Lucknow" which is incorrect as this address pertains to M/s K.K. Palace, which is a different entity altogether. It was further submitted that as per the information on record and also the address mentioned in the Income Tax return the correct address was "Mohd. Khaleeque, 529Ka/205, Old Khurram Nagar, Lucknow", from where the assessee had been carrying out his business activities and was assessed to tax from last several years. It was 5 claimed that after verification of records it was found that no compliance was made to this notice as the same was not served upon the assessee. Thus, the mandatory requirement of issuance and service of proper notice u/s 143(2) of the I.T. Act within the period of 12 months from the end of the month in which return has been filed has not been complied with, which rendered the entire assessment proceedings as null and void.
5.1 The Learned CIT(A), after considering the submissions of the assessee, observed that the notice u/s 143(2) of the I.T. Act has been issued on 29/09/2008 which is after 01/04/2008 and the newly inserted section 292BB by the Finance Act, 2008 provides with effect from 01/04/2008 that if the assessee has not raised any objection before the completion of such assessment or reassessment in relation to the proceedings commenced after 01/04/2008, the assessee is precluded from raising any objection that the notice has not been served upon him within the statutory time or the service of notice was not proper. The learned CIT (A) pointed out that the notice u/s 143(2) of the I.T. Act has been issued after 01/04/2008 i.e. on 29/09/2008, hence, the objection raised by the assessee was not tenable as per the provisions of section 292BB of the I.T. Act. He accordingly did not find merit in the submissions of the assessee. Now the assessee is in appeal.
6. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee challenged 6 the validity of service of notice before the learned CIT (A) who without appreciating the facts in right perspective dismissed the ground raised by the assessee. It was further submitted that the last date of service of notice in the present case was 30/09/2008 but the notice dated 29/09/2008 was issued at 7.17 P.M. on 30/09/2008 by Speed Post, so there was no question of serving the notice on the same date to the assessee. It was pointed out that the assessee sought the information under the Right to Information Act, 2005 from the Assessing Officer, who, vide letter dated 15/02/2011, informed that the notice was sent by Speed Post on 30/09/2008 at 7.17 P.M. In support of the above contention, reference was made to Page No. 2 of the assessee's compilation, which is the copy of the information supplied by the Income Tax Officer-III(2), Lucknow. It was contended that the notice u/s 143(2) of the I.T. Act was not served within the stipulated time, therefore, the assessment framed without service of valid notice was void ab initio. The reliance was placed on the following case laws:
(i) CIT vs. AVI-Oil India Ltd. [2010] 323 ITR 242 (P&H)
(ii) Nulon India Ltd. vs. Income Tax Officer [2010] 323 ITR 681 (Del)
(iii) ITAT Lucknow 'B' Bench order dated 19/03/2010 in I.T.A. No.495/Luc/09 for the assessment year 2002-2003 in the case of Shri Sanjeev Agarwal vs. ACIT
(iv) ITAT Lucknow 'B' Bench order dated 07/03/2011 in I.T.A. No.565/Luc/10 for the assessment year 2002-2003 in the case of Rajeev Agarwal vs. ACIT
(v) Andhra Pradesh Cement Co. Ltd. vs. CIT [1998] 232 ITR 364
(vi) Karimtaruvi vs. State of Karnataka [1966] 60 ITR 62
(vii) Kanpur Plastipack Ltd. vs CIT in I.T.A. No. 28 of 2007 (Alld) order dated 30/03/2007 7
(viii) CIT vs. Eqbal Singh Sindhana [2010] 304 ITR 177 (Del)
(ix) Virendra Dev Dixit vs. ACIT [2010] 41 DTR (All) 43
(x) CIT vs. CEBON India Ltd. [2010] 229 CTR 188 (P&H)
(xi) Hotel Blue Boon [2010] 321 ITR 362 (SC)
(xii) CIT vs. Rajeev Sharma [2010] 40 DTR (All) 129
(xiii) Kuber Tobacco Products Pvt. Ltd. vs. Dy. CIT [2009] 310 ITR (AT) 300 (Delhi) (SB)
7. The learned D. R. in his rival submissions strongly supported the orders of the authorities below and further submitted that the assessee participated in the assessment proceedings, therefore, the assessment was rightly framed even if the notice was not served upon the assessee in view of the provisions contained in section 292BB of the I.T. Act which is applicable with effect from 01/04/2008 and as per the deeming provisions contained in the aforesaid section 292BB of the I.T. Act, where an assessee has appeared in any proceedings or co-operated in any enquiry relating to an assessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served. It was contended that if a notice, which is required to be served on or after 01/04/2008 and if not so served, then notice can be considered as deemed to have been served u/s 292BB of the I.T. Act if the assessee has attended the assessment proceedings in response to the notice served on him. It was contended that in the present case as the assessee participated in the assessment proceedings, it is to be presumed that the notice u/s 143(2) has been served upon the assessee. He, therefore, submitted that the ground raised by the assessee in the Cross Objection, deserves to be dismissed. The reliance was placed on the following case laws: 8
(i) Hindustan Transport Co. vs. Inspecting Assistant Commissioner (All) 189 ITR 326
8. In his rejoinder, the learned counsel for the assessee submitted that the provisions contained in section 292BB of the I.T. Act relate to the jurisdiction of the Assessing Officer but cannot validate the assessment which has been framed without serving the notice u/s 143(2) of the I.T. Act. It was further submitted that the case of the assessee relates to the assessment year 2007- 2008 and the provisions of section 292BB of the I.T. Act are applicable for the assessment year 2008-2009 onwards. He further submitted that in the present case, there was no valid service of notice u/s 143(2) of the I.T. Act which is a mandatory requirement for framing the assessment u/s 143(3) of the Act, therefore, the assessment order in question deserves to be quashed.
9. We have considered the rival submissions and carefully gone through the material available on the record. In the present case, the assessee has challenged the validity of the assessment on the basis that the statutory notice u/s 143(2) has not been served upon the assessee within the stipulated period of 12 months from the date of filing of the return. In the present case the assessee filed the return of income on 08/11/2007 and the Assessing Officer issued the notice dated 29/09/2008 u/s 143(2) of the I.T. Act, 1961 (in short, the I.T. Act), which was sent through Speed Post on following address: 9
Shri Mohd. Khalik, 9/13, Vikas Nagar, Lucknow.
9.1 The copy of the said notice is available at page No. 3 of the assessee's compilation. The said notice was sent by Speed Post vide No.EU9480130871N at 7.17 P.M. on 30/09/2008. The address of the assessee as mentioned in the assessment order, in the impugned order of the CIT (A) and Form No. 36A filed by the assessee and also by the Department is as under:
Mohd. Khaliq, 529-Ka/205, Old Khurram Nagar, Lucknow.
9.2 The above address is definitely different from the address on which the notice was sent by the Assessing Officer. The claim of the assessee is that the said notice was not received by him. The Department has also not brought on record any material to substantiate that the aforesaid notice was served upon the assessee on the address given in the income tax return by the assessee.
9.3 To resolve this controversy, we have to discuss the relevant provisions contained in section 143(2) of the Act (before the amendment applicable w.e.f.
01/04/2008) which read as under:
"(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,--
(i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is 10 inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim:
[Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003;]
(ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return:
[Provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of themonth in which the return is furnished."
9.4 From the proviso to clause (ii) of sub section 2 of section 143 of the I.T. Act, it is clear that no notice shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. The use of word 'shall' makes it mandatory that the notice must be served on the assessee. in the instant case, nothing has been brought on record that the notice u/s 143(2) was served on the assessee. In our opinion, there is no place for the presumption when the provisions of the Act are very clear and there is no ambiguity as regards to the service of notice which must be before the stipulated period. As regards to the service of notice is concerned, the provisions are contained in section 282 of the Act which read as under:11
"282. (1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named,--
(a) by post or by such courier services as may be approved by the Board; or
(b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or
(c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000);
(d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-
section (1) may be delivered or transmitted to the person therein named.
Explanation.--For the purposes of this section, the expressions "electronic mail" and "electronic mail message"
shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 2000).]"
9.5 From the above provisions it is clear that the notice is to be served on the person named therein i.e. the assessee, either by post or as if it were a summon issued by a court in such a manner as provided under the CPC. The provisions contained in order (v) Rule 12 of the CPC 1908 provides that wherever it is practical, service shall be made on the 12 defendant in person when practicable or on his agent. The said provisions read as under:
"Service to be on defendant in person when practicable or on his agent whenever it is practicable, service shall be made on the defendant in person, unless he has an agent empowered to accept service, in such case, service on such agent shall be sufficient."
9.6 In the present case, as we have already noted in the former part of this order that the notice has neither been served on the assessee or any other person authorized by the assessee on the address given by the assessee to the Department.
9.7 In that view of the matter, we are of the considered view that in the instant case the notice u/s 143(2) before completing the assessment u/s 143(3) has not been served upon the assessee. Therefore, the assessment framed u/s 143(3) was invalid. On a similar issue the Hon'ble Delhi High Court in the case of CIT vs. Iqbal Singh [2007] 162 Taxman 107 has held has under:
"So, from the entire material available on record, we have no hesitation in holding that no notice u/s 143(2) of the Act had been served upon the assessee within the prescribed period and, therefore, the assessment made by the Assessing Officer, is invalid."13
9.8 Similarly in the case of Vipin Khanna vs. CIT [2002] 255 ITR 220 (P&H), their Lordships, after taking notice of circular No. 549 of 1989 observed and held as under:
"Therefore, in a case where a return is filed and is processed under section 143(1) (a) of the Act and no notice under sub- section(2) of section 143 of the Act thereafter served on the assessee within the stipulated period of 12 months the assessment proceedings under section 143 come to an end and the matter becomes final. Thus, although technically no assessment is framed in such a case, yet the proceedings for assessment stand terminated. The Central Board of Direct Taxes vide its Circular No.549, dated October 31, 1989 [1990] 182 ITR(St.) 1, has explained the new procedure of assessment in paras 5.12 and 5.13 as under (page 24):
"5.12 Since, under the provisions of sub-section (1) of the new section 143, an assessment is not to be made now, the provisions of subsections (2) and (3) have also been recast and are entirely different from the old provisions. A notice under sub-section (2) which will be issued only in cases picked up for scrutiny, is now issued only to ensure that the assessee has not understated his income or has not computed excessive loss or has not underpaid the tax in any manner while furnishing his return of income. This means that, under the new provisions, in an assessment order passed under section 143(3) in a scrutiny case, neither the income can be assessed at a figure lower than the returned income, nor loss can be assessed at a figure higher than the returned loss, nor a further refund can be given except what was due on the basis of the returned income, and which would have already been allowed under the provisions of section 143(1)(a)(ii).
5.13 A proviso to sub-section (2) provides that a notice under the subsection can be served on the assessee 14 only during the financial year in which the return is furnished or within six months from the end of the month in which the return is furnished, whichever is later. This means that the Department must serve the said notice on the assessee within this period, if a case is picked up for scrutiny. It follows that if an assessee, after furnishing the return of income does not receive a notice under section 143(2) from the Department within the aforesaid period, he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return." (emphasis supplied).
Thus, it is evident that the Board itself concedes that if the assessee after furnishing the return of income does not receive a notice under section 143(2) of the Act within the stipulated period he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. Here it needs to be clarified that in the Board's circular (see [1990] 182 ITR(St.) I) the stipulated period has been referred to as six months as it was the period specified originally when the new provision was introduced with effect from April 1, 1989. However, vide amendment made by the Finance (No.2) Act, 1991, this period was enhanced to twelve months with effect from October 1, 1991. In the present case it is an admitted position that no notice under section 143(2) of the Act had been served to the petitioner within the stipulated period and as such his return had become final."
9.9 The ratio laid down in the aforesaid case has been followed by Hon'ble Madras High Court in the case of CIT vs. M. Chellappan and Another [2006] 281 ITR 444 (Mad).
159.10 On a similar issue, the Hon'ble Jurisdictional High Court in the case of Mohan Dairy vs. UOI [2006] UPTC 461 (Allahabad) has held as under:
"7. Having heard learned Counsel for the parties, in my view, order of Tribunal is not sustainable. There is no dispute that before passing the assessment order under Section 143(3) of the Act, issuance of notice under Section 143(2) of the Act within the specified time, is mandatory and in case if it is not issued, assessment order passed stand illegal. Thus, in my opinion, ground, which has been raised and sought to be added in the grounds of appeal, is a legal ground which goes to the root of the matter, and thus, the Tribunal ought to have allowed the application and the ground sought to be added be permitted to be added in the grounds of appeal. In the case of National Thermal Power Company Ltd. v. Commissioner of Income Tax (supra), the Apex Court held as follows:
"The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income Tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., Commissioner of Income Tax v. Anand Prasad (1981) 128 I.T.R. 388(Delhi); Commissioner of Income Tax v. Karamchand Premchand P Ltd., (1969) 74 ITR 254 (Guj) and Commissioner of Income Tax v. Cellulose Products of India Ltd., (1985) 151 ITR 499 (Guj)(FB).
Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability."
169.11 On a similar issue the Hon'ble Delhi High Court in the case of Nulon India Ltd. vs. Income Tax Officer (Delhi) [2010] 323 ITR 681 (Delhi) has held as under:
"That the notice had been dispatched on October 30, 2002, and thereafter it had been redirected to the Noida address of the assessee. There was nothing on record to show on which date this notice was received at the given address of the assessee and on which date it was redirected. There was no presumption under the law that any notice sent by speed post must have been delivered to the assessee within 24 hours. More-over, there was nothing on record to show at whose instance the notice was redirected and sent to the address at Noida. No notice under section 143(2) of the Act, which is a mandatory requirement of law, had been served upon the assessee within the prescribed period."
9.12 In the present case the claim of the Department is that the assessee participated in the assessment proceedings, therefore, as per the provisions contained in section 292BB of the I.T. Act, the assessee is debarred from taking a plea in appellate proceedings before the learned CIT (A) to challenge the validity thereon on the ground of service of notice u/s 143(2) of the I.T. Act. This controversy has been resolved by the ITAT Delhi, Special Bench in the case of Kuber Tobacco Products P. Ltd. vs. Dy. CIT [2009] 310 ITR (AT) 300 (Delhi) [SB] by holding as under:
"Section 292BB has been made effective by the Legislature from April 1, 2008, and there is nothing in the enactment to show that section 292BB has retrospective operation. The first and foremost rule of interpretation is that in the absence of anything in the enactment to show that it is to have retrospective operation, the enactment cannot be construed to have retrospective operation and when an amendment relates to a procedural provision, creates a new disability or obligation and imposes new duty in respect of transactions already completed, the procedural provision also 17 cannot be applied retrospectively. Similar is the position where a statute not only changes the procedure, but also creates new rights and liabilities and it shall be construed to be prospective in operation unless otherwise provided either expressly or by necessary implication. Section 292BB has created a new disability on the assessee to the extent that he is debarred from taking a plea in appellate proceedings to challenge the validity thereof on the ground of valid issuance of notice required to be given by the statute in a case where the assessee has appeared in such proceedings or co-operated in the inquiry relating to assessment or reassessment."
9.13 It has further been held that:
"Section 292BB could not be construed to have retrospective operation and it had to be applied prospectively. Section 292BB is applicable to the assessment year 2008-09 and subsequent years. The assessee was not precluded from taking any objection prior to April 1, 2008, i.e., upto March 31, 2008, under section 292BB, regarding invalidity of assessment or reassessment on the ground of improper issuance of notice."
9.14 Similarly the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Cebon India Ltd. [2010] 229 CTR (P&H) 188 has held that:
[Head Note) - "Mere giving of dispatch number will not render the said finding to be perverse - In the absence of service of notice the Assessing Officer had no jurisdiction to make assessment - Absence of notice cannot be held to be curable under section 292BB of the I.T. Act."
9.15 The Hon'ble Supreme Court in the case of Karimtharuvi Tea Estate Ltd.
vs. State of Kerala 60 ITR 262 has held as under:
"It is well-settled that the Income-tax Act as it stands amended on the first day of April of any financial year must apply to the assessment of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.18
9.16 After considering the ratio laid down by the various Hon'ble Courts in the aforesaid referred to cases, it can safely be held that the provision of section 292BB of the I.T. Act has been inserted by the Finance I.T. Act, 2008 with effect from 01/04/2008 so these are applicable for the assessment year 2008-2009 while in the present case, the assessment year involved is 2007-2008, therefore, the said provisions are of no help to the Department as far as the facts of the assessee's case are concerned.
9.17 A similar view has been held by the Hon'ble Andhra Pradesh High Court in the case of Andhra Cements Co. Ltd. vs. CIT [1998] 232 ITR 364 wherein it has been held that:
"It is well settled that the Income-tax Act as it stands amended on the first day of April on any financial year must apply to the assessment of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. Therefore, whatever is the rate of tax as on 1st April of the financial year 1983- 84 is applicable to the assessment year 1983-84, though the assessment is made subsequent to the amendment. Since the higher rates of depreciation had been brought into force on April 2, 1983, they could not be made applicable to the assessee for the assessment years 1982-83 and 1983-84."
10. As we have already pointed out that the assessment year involved in the present case is assessment year 2007-2008 and as per the ratio laid down by various Hon'ble Courts in the aforesaid referred to cases, the provisions of 19 section 292BB of the I.T. Act inserted with effect from 01/04/2008 are applicable for the assessment year 2008-2009. Therefore, these provisions are not applicable to the facts of the present case. In view of the aforesaid discussion and considering the totality of the facts of the present case along with the various judicial pronouncements, we are of the view that as the notice u/s 143(2) of the I.T. Act was not served upon the assessee, therefore, assessment framed u/s 143(3) of the I.T. Act is not a valid assessment which deserves to be quashed. We order accordingly.
11. Before parting it is relevant to point out that as far as the judgment of Hon'ble Jurisdictional High Court relied by the learned D. R. in the case of Hindustan Transport Co. vs. Inspecting Assistant Commissioner (All) 189 ITR 326 is concerned, in the said case the issue involved relates to the territorial jurisdiction of the Assessing Officer u/s 124 of the I.T. Act while in the present case the issue involved relates to the service of notice within the period stipulated u/s 143(2) of the I.T. Act before finalization of the assessment u/s 143(3) of the I.T. Act. Therefore, the case relied by the learned D. R. is distinguishable on facts. Since we have decided the legal issue raised by the assessee vide ground No. 4 of the Cross Objection in his favour, therefore, no finding has been given on the other issues raised by the assessee on merit. Similarly no findings are required to be given in the appeal of the Department wherein the issue relates to the deletion of addition on merit because we have 20 allowed the appeal of the assessee on the issue of limitation, i.e. service of notice u/s 143(2) of the I.T. Act and since the notice u/s 143(2) of the Act has not been served on the assessee, the assessment is held to be invalid. As such we do not see any merit in the appeal of the Department.
12. In the result, the Cross Objection of the assessee is allowed and the appeal of the Department is dismissed.
(Order pronounced in the open court on 08/04/2011) Sd/. Sd/.
( H. L. KARWA ) (N. K. SAINI) Vice President Accountant Member Dated: 08/04/2011 *Singh Copy forwarded to the: - 1. Appellant. 2. Respondent. 3. CIT (A) 4. CIT 5. DR. Assistant Registrar