TMI Blog2009 (11) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... were either dropped or concluded. During the pendency of such proceedings, the AO has issued a notice Under Section 148. Before initiating proceedings Under Section 148, the AO has also issued a notice Under Section 142(1)(ii) vide which the AO called for certain details. Basically, such details can be asked only for the purpose of making an assessment. But the Assessing Officer cannot have jurisdiction Under Section 142(1) to call for the details unless the assessment proceedings or some other proceedings are pending. During the pendency of such assessment proceedings, the AO has initiated parallel proceedings Under Section 148 by issuing a notice Under Section 148. In the notice, the AO has mentioned that he is proposing to assess the assessee and require the assessee to file the return. Hence, it is not a case of re-assessment but a case of assessment. This impliedly suggests that proceedings initiated Under Section 142 were not concluded before the proceedings Under Section 148 were initiated. Notice Under Section 148 can be issued for making an assessment, re-assessment or re-computation. We are aware of the fact that in case the proceedings initiated Under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Acquisition Act. They cannot be reasonably construed to exclude the application of any general provisions of the Acquisition Act. Hence, we have to consider the applicability of 139 to the extent, as it is applicable. It does not mean that the provisions of Section 139 will be squarely applicable. The Legislature could have used the word that the provisions of Section 139 will be applicable, but they have used the word 'so far as' in that section. Section 234A(3) mentions that interest can be charged u/s 234A when the return is furnished after the expiry of the time provided in the notice. It will end on the date of furnishing of the return. This, therefore, squarely suggest that an assessee can file a return beyond the time prescribed in the notice issued u/s 148. Section 144 can be invoked if the assessee fails to comply with all the terms of notice issued Under Section 142(1). In the instant case, the AO has mentioned that the assessee has filed certain information on various dates but failed to explain all the queries raised by the department. Hence, this is not a case where the assessee has failed to comply with all the terms of notice. The AO has cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be filed on or before 15th March, 2006. However find returns of income have been filed for the asst. years 2001-02 to 2005-06 till 12th December, 2006. The Assessing Officer issued notice Under Section 142(1) for the asst. year 2005-06. The acknowledgement of receipt of the notice is clear from the letter dated 25th January, 2006, but no return was filed. Another notice was issued on 18th October, 2006 requiring the assessee to file the return of income for the asst. year 2005-06. The assessee was also required to file certain details and documents as per annexure to the notice. Such notices were served on 18th October, 2006. The assessee did not file the return of income. No details and documents called for were filed. The assessee did not bother to seek adjournment. The Assessing Officer issued a show-cause notice Under Section 274 r.w.s. 271 of the IT Act on 2nd November, 2006 vide which the assessee was asked as to why the penalty should not be imposed for not complying the notice Under Section 142(1). Subsequently, on the basis of the information gathered during the course of survey and post survey investigation, the AO issued notice Under Section 148 on 16th February, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is completed Under Section 143(3) r.w.s. 147 of the IT Act. 4. It is an undisputable fact that the Assessing Officer has issued a notice Under Section 142(1). The AO in his order has mentioned that the assessee has acknowledged the receipt of notice Under Section 142(1) on 25th January, 2006. Thus, notice has been issued for the asst. year 2005-06 during the relevant asst. year. As per proviso to Section 142(1)(i) introduced by the Finance Act, 2006 with retrospective effect from 1/4/1990, notice Under Section 142(1) issued on 25th January, 2006 is a valid notice, vide which, the AO could have required the assessee to file the return of income. The AO has mentioned that another notice was issued on 18th October, 2006 vide which the assessee was asked to file the return of income for the asst. year 2005-06 and to file certain details and documents as per annexure to that notice. The AO can ask for filing of return Under Section 142(1)(i) and can ask for details to be filed Under Section 142(ii). Power Under Section 142 was given to the AO for the purpose of making an assessment under the Income Tax Act. Section 142(1) starts with the wording 'for the purpose of making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings was held as invalid. 6. The Hon'ble Calcutta High Court in the case of CIT v. Soorajmull Nagarmall 141 ITR 140 observed at page 149 as under: But in a case where the time to file the return had expired and notice had been issued to the assessee to file the return and proceedings for assessment pursuant to that notice were pending, unless the proceedings had been terminated either by an assessment or the completion of the proceedings, it could not be said, merely on the failure of the assessee to file the return, that income had escaped assessment by reason of the failure or omission to file the return within time. The above observations were expressed in the Unreported decision of the Hon'ble Calcutta High Court in the case of Haji Mohamed Mian v. CIT. Such observations were approved by the Hon'ble Apex Court in the case of CIT v. Bidhu Bhusan Sarkar 63 ITR 278. 7. We are aware of the fact that in case the proceedings initiated Under Section 142 were dropped or concluded then it will mean the termination of the proceedings and the AO will assume jurisdiction Under Section 147 on the basis of information gathered during the course of survey. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el proceedings Under Section 148 then the assessment order passed in pursuance to such notice is invalid in the eye of law. 10. Another issue, which arises in this case, Is that the AO has not issued a notice Under Section 143(2) after the assessee has filed the return on 19th November, 2007. The return has been filed beyond the time limit prescribed Under Section 139(4) of the IT/Act. The return has not been filed within the period allowed Under Section 148 of the IT Act. The learned DR submitted that the return filed was not valid return and therefore no cognizance was required to be made on such return. There was no need of issuing notice Under Section 143(2). 11. In Section 148, it is mentioned that the AO can issue a notice asking the assessee to file the return within the time mentioned in the notice before making an assessment. It is mentioned that the provisions of this Act shall so far as may be applied accordingly as if such return were a return required to be furnished Under Section 139. Whether provisions of Section 139(4) can be imported into Section 148 to say that the return filed by the assessee beyond the period prescribed Under Section 139(4) or beyond the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 139 so far as may be applicable is to enable the AO for making the assessment and requiring him to follow the procedure for making assessment. Moreover, the revenue cannot invoke Section 139(4) to say that the return is invalid because Section 139(4) speaks of notice Under Section 142(1) but does not refer to notice Under Section 148. 15. The Hon'ble jurisdictional High Court in the case of A Balakrishnan v. General Manager, Hindustan Machine Tools Ltd. and Another 290 ITR 227 had an occasion to consider as to whether the AO is required to process a return, which is filed beyond the time stipulated Under Section 139(1) or 139(4) of the Act. The Hon'ble High Court directed the authorities to process the return. It is true that in that case, the assessee claimed refund by filing of the return though the facts in the instant case are not identical but the return filed by the assessee on 19th November, 2007 cannot be held to be an invalid return. 16. It is an undisputed fact that no notice Under Section 143(2) has been issued in the instant case. Vide Finance Bill, 2006 provisos were inserted retrospectively with effect from 1st October, 1991. An explanation was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e served under the said section. This amendment will take effect retrospectively from 1st October, 2005. 17. From the insertion of above proviso, it is clear that if an assessee has filed a return in response to notice Under Section 148 then notice Under Section 143(2) is required to be given if an assessment is to be made. Alternatively, the Assessing Officer can issue notice Under Section 142(1) and can proceed to make assessment Under Section 144 of the IT Act. The explanation makes evidently clear that notice Under Section 143(2) is required to be issued within the stipulated period. In case no such notice is issued then the assessment cannot be treated as valid. The learned AR has relied on the following decisions for the proposition that the assessment is invalid in case notice Under Section 143(2) is not issued: CIT v. Karnataka Vidyuth Kharkhane Ltd. 313 ITR 345 (Kar.) Hotel Surya v. ITO in ITA No. 668 669/B.01, Bangalore ITAT. Gina Enterprises v. ACIT in ITA No. 155 175/Bang/2007, Bangalore, ITAT. CIT v. C. Palaniappa 284 ITR 257 (Mad) CIT v. M. Chellappa and Anr. 281 ITR 444 (Mad.) DCIT v. Mahi Valley Hotels Resorts 287 ITR 360 (Guj.) CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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