M.M.KUMAR,J. - (1.) THIS order shall dispose of ITA Nos. 85 and 287 of 2011 preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for brevity, 'the Act'), against the order(s) dated 10.9.2010 and 15.6.2011 respectively, passed by the Income tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity, 'the Tribunal') because common question of law and facts are involved in these appeals.
(2.) FACTS of these appeals may first be noticed. ITA No. 85 of 2011: The assessee-respondent during the relevant assessment year 2006-07 has been doing the business of Bucks and Quickies (Agencies). On 10.1.2007, the assessee-respondent filed his return declaring an income of Rs 2,48,660.00, which was processed by the Assessing Officer under Section 143(1) of the Act. The case was taken up for scrutiny and a notice under Section 143(2) of the Act was issued on 26.10.2007. The Assessing Officer also issued other statutory notices to the assessee-respondent. In response, the assessee-respondent appeared from time to time and furnished all the information. After completing all the formalities, the Assessing Officer added an income of Rs 43,91,913.00 and accordingly assessed the income of the assessee-respondent as Rs 46,40,573.00 as against the returned income of Rs 2,48,660.00, vide order dated 19.12.2008. The Assessing Officer came to the conclusion that disallowance of rebate and discount paid by the assessee-respondent to the customers was not rebate and discount but commission paid by him to the customers on which no TDS as required under Section 194H of the Act, was deducted and thus, it violated the provisions of Section 40(ia) of the Act (A-1).
(3.) THE assessee-respondent preferred an appeal before the Commissioner of Income-tax (Appeals), Jalandhar, against the order dated 19.12.2008, inter alia, raising the ground that the Assessing Officer has exceeded the jurisdiction under Section 143(2) of the Act because the notice dated 26.10.2007, issued under Section 143(2) of the Act, was sent to an address at which the assessee- respondent was not available. Therefore, no presumption of service of notice upon the assessee-respondent, under Section 143(2) of the Act, within the period of limitation of 12 months of the end of the month in which the return was filed, could be drawn. On 13.11.2009, the CIT (Appeals), Jalandhar, allowed the appeal by holding that for assuming jurisdiction to pass an assessment order under Section 143(3) of the Act, service has to be effected by the Assessing Officer within 12 months of the end of the month in which the return was filed. The CIT (Appeals), Jalandhar, set aside the order dated 19.12.2008, passed by the Assessing Officer (A-2).;