Income Tax Appellate Tribunal - Ahmedabad
Devansh Enterprise,, Ahmedabad vs Assessee on 24 January, 2013
आयकर अपीलीय अिधकरण,
अिधकरण, अहमदाबाद Ûयायपीठ ''B'', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD,
"B" BENCH
सव[ौी ौी जी.
जी.सी.
सी.गुƯा,
ा माननीय उपाÚय¢,
उपाÚय¢, एवं तेज राम मीणा,
मीणा, लेखा सदःय के
सम¢ ।
BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND
TEJ RAM MEENA, ACCOUNTANT MEMBER)
ITA No.1419/Ahd/2006
[Asstt.Year : 2001-2002]
M/s.Devansh Enterprise बनाम/Vs. ITO, Ward-2(1)
C/o. Shri Rajubhai S. Shah Ahmedabad.
A/5, Gajrawala Flats
3rd Floor, Paldi, Ahmedabad.
(अपीलाथȸ / Appellant) (ू×यथȸ / Respondent)
िनधा[ǐरती कȧ ओर से/
Assessee by : Shri A.L. Thakkar
राजःव कȧ ओर से/
Revenue by : Shri Y.P. Verma
सुनवाई कȧ तारȣख/
Date of Hearing : 24th January, 2013.
घोषणा कȧ तारȣख/
Date of Pronouncement : 01-02-2013
आदे श / O R D E R
PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the
assessee for the assessment year 2001-2002 is directed against the
order of the CIT(A)-VI, Ahmedabad dated 28.03.2006.
2. The grounds of the appeal of the assessee are as under:
ITA No.1419/Ahd/2006
"1. The ld.CIT(A) has erred in confirming the finding oft he
AO that the service of the first notice was a valid service in the
yes of law and thereby rejecting the contention of the appellant.
2. The CIT(A) considering the facts of the case ought to
have held that the order passed u/s.144 of the Act by the AO is
without proper service of notice of hearing and without giving a
reasonable opportunity of hearing to the appellant and hence
the same is illegal and bad in law."
3. The learned counsel for the assessee submitted that no valid
service of the notice of hearing was made by the department, within
the statutory time of 12 months from the end of the month, in which
the return of income was filed by the assessee. He submitted that the
whole proceeding of the assessment in this case under Section 144 of
the Act are invalid due to non-service of notice of hearing within the
time allowed under the provisions of the Act. He submitted that the
assessee is in second round of the appeal before the Tribunal, and in
the first round of the appeal before the Tribunal, the Tribunal has
restored the issue to the file of the CIT(A) with certain directions. He
submitted that the CIT(A) while deciding the matter afresh in
accordance with the directions of the Tribunal, has sent back the
matter to the AO for offering his comment on the service of notice
under Section 143(2) of the Act. The AO, in turn, has submitted that
the notice under Section 143(2) dated 29.10.2002 fixing the case for
14.11.2002 was served on 31.10.2002 on Shri Devang Shah,
Chartered Accountant, who has audited the accounts of the assessee-
firm. He submitted that the said CA was never authorised to receive
the said notice or to represent before the department on behalf of the
assessee. He referred to the original assessment order dated 19.2.2004
wherein at page no.2 of the assessment order, the AO has reproduced
the chart showing that the notice dated 29.10.2002 under Section
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ITA No.1419/Ahd/2006
143(2) was served on 31.10.2002 and second notice was sent through
speed post on 15.12.2003.
4. The learned DR has opposed the submissions of the learned
counsel for the assessee. He submitted that the assessee has
challenged the validity of the service of notice under Section 143(2)
for the first time before the Tribunal. He submitted that the assessee-
firm was closed and the assessee has not intimated the closure of the
firm to the department. He relied on the decision of the Trilok Singh
Dhillon v. Commissioner of Income-tax, 332 ITR 185. He relied on
the order of the AO and the CIT(A).
5. The learned counsel for the assessee, in his rejoinder, submitted
that the assessee firm was closed on 15.5.2003 i.e. much after the
service of the first notice of hearing on 31.10.2002. He submitted that
the decision of Hon'ble Chhatisgarh High Court relied upon by the
learned DR is distinguishable, since in the case before the Hon'ble
High Court, the assessee has filed its return in response to the notice
issued by the department, whereas in the case of the present assessee
the return of income was filed by the assessee already. He relied on
the decision of the ITAT, Cochin Bench in the case of Vamadeven
Bhanu Vs. DCIT, 8 SOT 147 (Cochin) wherein held that the service
of notice on the CA is not a valid service, when he is not authorised to
accept the notice on behalf of the assessee.
6. We have considered rival submissions and have perused the
orders of the AO and the CIT(A) and also order of the Tribunal in the
first round of litigation in the case of the assessee and copies of
various documents filed in the compilation by the assessee. We find
that it is mandatory to issue notice of hearing under section 143(2) of
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ITA No.1419/Ahd/2006
the Act within the stipulated period of 12 months from the end of the
month in which the assessee has filed the return of income. In this
case, we find that the return of income was filed on 30.10.2001, and
therefore the notice under Section 143(2) for hearing of the case could
have been served on or before 31.10.2002. We find that it is an
admitted fact that the notice of hearing under section 143(2) of the Act
dated 29.10.,2002 fixing the date of hearing on 14.11.2002 was served
on 31.10.2002 on Shri Devang Shah, Chartered Accountant, who has
audited the accounts of the assessee-firm. The CIT(A), in the second
round, has sent the matter back to the AO for offering his comments
on the service of notice under Section 143(2), and the AO has
submitted his report vide letter dated 9.3.2006, whose extract has been
reproduced by the CIT(A) in the impugned order. We find that the
AO has not claimed that Shri Devang Shah, CA was authorised to
receive any notice on behalf of the assessee-firm or was the
representative of the assessee or that any power of attorney was
executed by the assessee firm in favour of the said Chartered
Accountant. In these facts of the case, it could not be said that the
notice of hearing dated 29.10.2002 issued under Section 143(2) fixing
the date of hearing on 14.11.2002 was validly served within the
statutory period of 12 months from the end of the month in which the
assessee has filed its return of income. The subsequent notice issued
by the AO under section 143(2) was after the expiry of the statutory
period of 12 months from the end of month in which the return of
income was filed by the assessee. The assessee-firm was closed on
15.5.2003 i.e. after the end of the statutory period of valid service of
notice in this case. The non-service of notice under Section 143(2)
within the statutory period goes to the root of the matter, and since the
jurisdiction was not validly assumed by the AO, we have no
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ITA No.1419/Ahd/2006
alternative but to cancel the assessment framed in this case. In
Shubham Enterprises Vs. ITO, 3 SOT 250 (Allahabad Bench), the
Tribunal has held that the service of valid notice under Section 143(2)
is mandatory and non-compliance of the said provision within the
period of 12 months from the end of the month in which the return is
furnished, make the assessment null and void. Accordingly, the
grounds of the appeal of the assessee are allowed.
7. In the result, the appeal of the Assessee is allowed.
Order pronounced in Open Court on the date mentioned
hereinabove.
Sd/- Sd/-
तेज राम मीणा / TEJ RAM MEENA)
(ते जी..सी
जी
(जी सी..गुƯाा/G.C. GUPTA)
लेखा सदःय /ACCOUNTANT MEMBER उपाÚय¢ /VICE-PRESIDENT
Copy of the order forwarded to:
1) : Appellant
2) : Respondent
3) : CIT(A)
4) : CIT concerned
5) : DR, ITAT.
BY ORDER
DR/AR, ITAT, AHMEDABAD
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