TMI Blog2008 (1) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... re not notices calling for the return of income; they have only called for certain information from the assessee. We are unable to agree with the CIT(A) that a notice appears to have been issued u/s 143(2). He has examined the record and has found that the copy of the same is not on record at present . He has used guarded words, such as at present . Nevertheless, he has proceeded to hold that a notice appears to have been issued. We are unable to appreciate how in the absence of any evidence for issue or service of the notice, or even a copy of the notice on file, such a finding could have been recorded by the CIT(A). In the present case the assessee has been held to have filed such a return on 23-32000 and thus this condition is satisfied. The other condition is that the notice under section 143(2) should have been served within the time-frame prescribed under clause (b) of the proviso. This condition is not satisfied in the present case because no notice has at all been served under section 143(2) as found by us. The clause applies only to save a notice served on the assessee, though not within the period of 12 months from the end of the month in which the return was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return at the time of framing the original assessment. On 24-2-2002, the assessee wrote another letter to the Assessing Officer in which the assessee asked for issue of a notice under section 143(2) of the Act [the reference to section 143(3) in the letter is obviously a mistake]. On 14-3-2002, the assessee wrote another letter to the Assessing Officer in which at two places in page 2 of the letter the assessee pointed out that till date no notice under section 143(2) was served on him and that such a notice cannot be issued now as the same has become barred by limitation. Reference was also invited to certain judgments and the circular issued by the CBDT explaining the amendment made by the Direct Tax Laws (Amendment) Act, 1987. A request was, accordingly, made in the letter that the proceedings for reassessment may be closed. The Assessing Officer, however, went ahead with the reassessment proceedings and completed. the same on a taxable income of Rs. 1,88,84,428, excluding the long-term capital gains of Rs. 2,65,063 assessed earlier by order dated 25-3-1998. The major addition made in the reassessment order was that of Rs. 1,86,49,613 representing the alleged undisclosed inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which objections have been filed by the appellant and they have been discussed. However, the copy of notice was not produced by the Assessing Officer as the same was not on record but it appears that the appellant has been given opportunity of being heard as Shri Jacob Phillips and Shri S.K. Aggarwal, CAs have attended the proceedings and have given their objections for the additions. Hence, it appears that notice under section 143(2) has been issued and accordingly ground of appeal No. 5 is also hereby dismissed. 6. The first ground in the cross objection is directed against the aforesaid decision of the CIT (Appeals). The learned DR has produced the record before us and we have perused the same. We find that only two notices were issued by the Assessing Officer and both were under section 142(1), the first one dated 10-12-2001 and the second one is dated 31-1-2001, copies of these notices have also been placed at pages 5 and 8 of the paper book referred to above. These are notices calling for certain information from the assessee and not notices calling for the return of income. The submission of the learned representative for the assessee was that in the absence of any notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onse to the notices issued on 10-12-2001 and 31-1-2002 under section 142(1) of the Act. It was submitted that in any case, if factually it is found from the record that no notice was issued to the assessee under section 143(2) of the Act then the Assessing Officer's statement would stand disproved. On these facts, it was contended that the assessment should be quashed as null and void. 7. The learned Senior DR, on the other hand, strongly relied on the judgment of the Madras High Court in Areva T D India Ltd. v. Asstt. CIT [2007] 294 ITR 233 and submitted that the non-issue of the notice under section 143(2) was only a procedural irregularity and cannot nullify or invalidate the assessment. It was pointed out that the assessee was given full opportunity to participate in the assessment proceedings and thus the purpose of the notice under section 143(2) was fulfilled and, therefore, the assessee cannot have any grievance in this behalf and should not be allowed to contend that the assessment itself is invalid. It was further pointed out that technically the assessee did not file a return in response to the notice under section 148 and, therefore, it is not possible to compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment under section 147 but that, in our opinion, should make no difference to the result because even where an assessment is reopened under section 147 read with section 148, the assessment order is ultimately passed only under the provisions of section 143(3). Therefore, the ratio of these judgments is applicable to cases of reassessments also. The judgment of the Rajasthan High Court in the case of Tiwari Kanhaiya Lal is authority for the proposition that if an assessee feels that it is not necessary to file a fresh return in response to notice under section 148 and that the earlier return filed by him under section 139 should be treated as sufficient compliance of the reassessment notice, he may inform the Assessing Officer of his decision to treat his previous return as the return filed under section 148 and in that event, the earlier return will have to be treated as a return under section 148. Therefore, the return filed by the assessee in the original assessment proceedings on 31-8-1995 must be taken as the return filed also in response to the notice under section 148, with the rider that the date of filing of such a return would be the date on which the assessee wrote t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, such as at present . Nevertheless, he has proceeded to hold that a notice appears to have been issued. We are unable to appreciate how in the absence of any evidence for issue or service of the notice, or even a copy of the notice on file, such a finding could have been recorded by the CIT(A). 10. We have also examined the proviso to section 148(1) inserted by the Finance Act, 2006 with retrospective effect from 1-10-1991 to find out its applicability to the present case. The first proviso saves the validity of a reassessment order where a notice under section 143(2) was not served within the prescribed period - 12 months from the end of the month in which the return was filed. But the saving is subject to certain limitations. Firstly, the assessee should have filed the return between 1-10-1991 and 30-9-2005 in response to a notice issued under section 148. In the present case the assessee has been held to have filed such a return on 23-32000 and thus this condition is satisfied. The other condition is that the notice under section 143(2) should have been served within the time-frame prescribed under clause (b) of the proviso. This condition is not satisfied in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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