Gujarat High Court
The Commissioner Of Income Tax - Ii vs Laxmidas D Ladani....Opponent(S) on 18 December, 2014
Author: Ks Jhaveri
Bench: Ks Jhaveri
O/TAXAP/1426/2007 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1426 of 2007
With
TAX APPEAL NO. 819 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE K.J.THAKER
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
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THE COMMISSIONER OF INCOME TAX - II....Appellant(s)
Versus
LAXMIDAS D LADANI....Opponent(s)
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Appearance:
MR PRANAV G DESAI, ADVOCATE for the Appellant(s) No. 1
MR TUSHAR P HEMANI, ADVOCATE for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
Page 1 of 6
O/TAXAP/1426/2007 JUDGMENT
and
HONOURABLE MR.JUSTICE K.J.THAKER
Date : 18/12/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE KS JHAVERI)
1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Rajkot Bench (hereinafter referred to as 'the Tribunal') dated 18.05.2007 in ITA No. 726/Rjt/2005 and C.O. No. 646/Rjt/2005 for the Assessment Year 2001-02, the revenue has preferred the present Tax Appeals.
1.1 These appeals were admitted by this Court on 25.07.2008 for consideration of the following substantial question of law:
TAX APPEAL No. 1426 of 2007 Whether the Appellate Tribunal is right in law and on facts in holding that the appeal of the revenue had become infructuous on the ground that the assessment order itself was held to be invalid in the cross objections filed by the assessee?
TAX APPEAL No. 819 of 2008 Whether the Appellate Tribunal is right in law and on facts in holding that the assessment u/s 147 is bad in law on the ground that notice u/s 143(2) of the Act was not Page 2 of 6 O/TAXAP/1426/2007 JUDGMENT issued within the stipulated time?
2. Notice u/s 148 was issued upon the assessee as he had not filed his return of income within the stipulated time.
Thereafter the assessee filed his return of income and during the course of assessment proceedings, the assessing officer noticed that the assessee had not submitted details regarding sale of agricultural produce. The Assessing Officer therefore treated the same as income from undisclosed sources and teaxed the same. On appeal the CIT (Appeals) deleted the additions made by the Assessing Officer
3. On appeal before the Tribunal by the revenue and cross objection by the assessee, by impugned order, the Tribunal dismissed the appeal filed by the revenue and allowed the Cross objection filed by the assessee.
4. Being aggrieved and dissatisfied with the impugned order passed by the Tribunal, the revenue has preferred the present Tax Appeals for consideration of the aforesaid substantial question of law.
5. The issue involved in the present Tax Appeal is now not res integra in view of the decision of this Court in the case of Commissioner of Income-Tax vs. Sukhini P. Modi reported in [2014] 367 ITR 682 (Guj) wherein this Court has held as under:
"Question in the present form has been answered by this Court in the case of Deputy Commissioner of Income Tax vs. Mahi Valley Hotels and Resorts (supra). However, without attaching the question of limitation Page 3 of 6 O/TAXAP/1426/2007 JUDGMENT which again by Finance Act, 2008 has been reduced to six months. Issue is no longer res integra.
The Apex Court in the case of Assistant Commissioner of Income-tax vs. Hotel Blue Moon reported in [2010]321 ITR 362 has considered the very issue. The Apex Court held that the Assessing Officer has to necessarily follow the provisions of section 142 and sub-sections (2) and (3) of section 143. It did not accept the submission of the Revenue that the requirement of the notice under section 143 can be dispensed with and the same is mere procedural irregularity. In the words of the Apex Court, it is held as under:
The case of the revenue is that the expression so far as may be apply indicates that it is not expected to follow the provisions of section 142, sub-sections(2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the revenue, since we do not see any reason to restrict the scope and meaning of the expression so far as may be apply. In our view, where the Assessing Officer in repudiation of the return filed under section 158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143.
In the instant case, we notice that both CIT(Appeals) and the Tribunal have held that the procedure prescribed of issuance of notice under section 143(2) has not been followed at all. This realm of fact has not been disputed by the Revenue. In view of this decision of the Apex Court, the assumption of the jurisdiction of issuance of notice of reopening itself would not be sustainable, and therefore, this Court does not require to indulge into the concurrent findings of both the authorities. In absence of fulfillment of mandatory requirement of issuance of notice under section 143(2) both the authorities rightly and validly held against the Revenue and in favour of the assessee. Resultantly, Tax Appeals deserve no further consideration and are dismissed with no order as to cost. "Page 4 of 6
O/TAXAP/1426/2007 JUDGMENT
6. Identical issue had come up before another bench of this Court and this Court vide judgement and order dated 21.12.2013 passed in Tax Appeal No. 72 of 2008 in the case of CIT vs. Vinay Printing Press has held as under:
3.0. Heard Ms. Mauna Bhatt, learned advocate for the revenue and Shri B.S. Soparkar, learned advocate for the assessee and perused the impugned judgment and order passed by the learned ITAT as well as learned CIT (A). The short question which is posed for consideration of this Court whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the learned CIT(A) holding that as the notice under Section 143(2) of the Act was issued after a period of 12 months, the resultant order u/s 148 r/w section 143(1) was bad in law. The aforesaid question / issue is now not res intergra in view of the decision of the Honble Supreme Court in the case of Assistant Commissioner of Income Tax and Anr vs. Hotel Blue Moon and others reported in 321 ITR 362.
7. Mr. Pranav Desai, learned advocate on behalf of the revenue is not in a position to dispute the above and is not in a position to show and/or point out any contrary decision.
8. Having heard learned advocates appearing on behalf of the parties and the question posed for consideration before us reproduced hereinabove and considering the decisions cited hereinabove, the questions raised in the present appeal are required to be answered in favour of the assessee. We are not giving further elaborate reasons for the same as issue has already been conclude by this Court vide the aforesaid decisions.Page 5 of 6
O/TAXAP/1426/2007 JUDGMENT 9. Accordingly, the questions are answered in the
affirmative i.e. against the appellant - revenue and in favour of the assessee. The Tribunal is justified in holding that the appeal of the revenue had become infructuous on the ground that the assessment order itself was held to be invalid in the cross objections filed by the assessee and in holding that the assessment u/s 147 is bad in law on the ground that notice u/s 143(2) of the Act was not issued within the stipulated time.
In view of the above, the impugned order passed by the Tribunal is confirmed. Present Tax Appeals are dismissed accordingly.
(K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 6 of 6