Section 292BB can not cure time barred notice us 143(2) issued after prescribed time limit. There is distinction between issue and service of notice-Allahabad High Court
Case Law Details:
Income Tax Appeal: No. 58 of 2016
Appellant :- Commissioner Of Income Tax (Exemption), Lucknow
Respondent :- M/S Sushila Umrao Singh Charitable & Educational Trust, Allah
Date of Judgment: 11/05/2016
Coram: Hon’ble Amreshwar Pratap Sahi, J , Hon’ble At tau Rahman Masoodi,J
Heard Sri Alok Mathur, learned counsel for the appellant.
The contention of the learned counsel is that the deeming provision of Section 292BB creates a fiction and it overcomes the hurdle of notice, once a response is filed by an assessee to the proceedings initiated upon the issuance of a notice under Section 143(2) of the Income Tax Act, 1961.
The facts which are undisputed are that a return was filed on 31.10.2007 for the assessment year 2007-08 by the respondent assessee on which a query was made on 21.11.2008 to which a reply was submitted on 20.12.2008.
A notice is said to have been issued under Section 148 of the Income Tax Act, 1961 on 19.1.2009. The assessee submitted a reply on 6.3.2009 stating therein that he has filed his return on 31.10.2007 which should be treated to be his return. On the submission of such reply, the notice for escaped assessment under Section 143(2) of the Act came to be issued for the first time on 30.9.2009. It is an admitted position which is obvious that upon submission of reply on 6.3.2009 the assessee would be deemed to have filed a reply by the said date. The period of six months, therefore, had expired as on 30.9.2009. Undisputedly, the notice under Section 143 (2) has been issued after the expiry of six months as provided for in the aforesaid provision on 5.11.2009.
Learned counsel Sri Mathur has relied upon a Division Bench judgement of Punjab & Haryana High Court in the case of Commissioner of Income Tax v. Panchvati Motors (P.) Ltd., (2011) 243 CTR (P&H) 189, to contend that the issuance of notice had not been agitated before the assessing officer by the assessee. The Commissioner of Income Tax (Appeals) on an erroneous assumption and an incorrect interpretation of the provision, proceeded to allow the benefit of the expiry of six months to the assessee and answered the question against the department against which the department preferred an appeal before the ITAT that has also met the same fate.
The contention is that a substantial question of law arises keeping in view the deeming provision of Section 292BB or else if the said interpretation is accepted then the said provision would become redundant.
We find from the judgement of the ITAT that it has relied on the Division Bench judgement of this Court in the case of Commissioner of Income Tax v. Salarpur Cold Storage and a copy of the said judgment dated 19.8.2014 has been placed before us.
We have perused the said judgement. The judgement proceeds on the legal assumption that there is distinction between the issuance of notice and the service of a notice as contemplated under Section 143 (2) read with 143 (3) of the Income Tax Act, 1960 and Section 292BB of the said Act. On a close scrutiny, we find that Section 292BB uses the words ‘service of notice’. The Division Bench after taking notice of the same has clearly came to the conclusion that the issuance of notice is a sine qua non within the prescribed limits of six months. The same cannot be cured as if the issuance of notice itself is after six months then it is an incurable defect and for that reliance has been placed by the Division Bench on the apex court judgement in the case of Assistant Commissioner of Income Tax and another v. Hotel Blue Moon, (2010) 3 SCC 259.
The contention of the learned counsel for the appellant on the strength of Punjab & Haryana High Court judgment, therefore, does not carry the case any further. The interpretation given by the Division Bench in the judgement of Salarpur Cold Storage (supra) is clearly based on the facts similar to that of the present case and we are in agreement with proposition of law propounded in the said case.
Consequently, we do not find any substantial question of law for being answered nor any ground for admission of the appeal.