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2020 (4) TMI 85 - AT - Income TaxReopening of assessment u/s 147- non-issue of notice u/s. 143(2) - resort to Best Judgment Assessment - HELD THAT:- Taking into consideration the ratio decidendi laid by the Hon’ble Supreme Court in Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] the Hon’ble jurisdictional High Court and various other Hon’ble High Courts that non-issue of notice u/s. 143(2) vitiates the very usurpation of jurisdiction to frame assessment order u/s. 143(3) of the Act, the Ld. CIT(A) taking note of the fact that AO has not issued notice u/s. 143(2) of the Act despite assessee filing the Return of income dated 20.11.2017 has found the usurpation of jurisdiction by AO to be bad in law and consequently quashed the same after taking note of the remand report filed by the AO which is reproduced for easy reference. Main reason the AO states regarding non-issue of notice u/s. 143(2) of the Act was the omission on the part of the assessee to file return of income within thirty days after issue of notice u/s. 148 - Clause (a) and (b) of sub-section (1) of section 144 is not applicable to the f acts of the case as discussed after going through the remand report of the AO. So coming to clause (c), we note that if the assessee has filed the return, and thereafter assessee fails to comply with all the terms of a notice issued under sub-section (2) of section 143, then AO can resort to Best Judgment Assessment. Here in this case the assessee had filed return of income before the AO on 21.09.2017 and 20.11.2017, therefore, as per clause (c) the AO was duty bound to give the mandatory notice u/s. 143(2) and in case if the assessee failed to comply with all the terms of the notice issued u/s. 143(2) then only he could have resorted to Best Judgment Assessment u/s. 144 of the Act. When the assessee receives a notice u/s. 148, he is required to file a return of income within the time specified by the AO in that notice; and once the assessee files the return of income pursuant to notice u/s. 148, the return will be treated as a return u/s. 139 and the provision of section 139 so far as may be applicable would apply. In the present case though the assessee did not file the return of income within the specified time given by AO, the assessee had filed the return of income on 21.09.2017 and on 20.11.2017 before the reassessment was framed on 22.12.2017. So, on a con-joint reading of section 148(1) with sec. 139(4) and section 144 makes it abundantly clear that pursuant to a notice u/s. 148 of the Act, if an assessee files belatedly a return or a letter reiterating his earlier return then the AO is bound to issue notice u/s. 143(2) of the Act, if he has to frame re-assessment order u/s 143(3)/144 of the Act. Therefore, the contention raised by the Ld. CIT, DR and reasoning given by AO cannot be countenanced. Since, it is not the case of the AO/Ld. CIT, DR, that assessee has not filed return of income pursuant to notice u/s. 148 of the Act, and when the fact was that assessee had filed return of income, the AO in order to successfully usurp the jurisdiction to frame assessment had to issue notice u/s. 143(2) which was a jurisdictional notice and mandatory for framing of assessment order u/s. 143(3) or u/s. 144 of the Act as discussed. - Decided against revenue.
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