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TMI Blog2011 (2) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... asons recorded for reopening are bad in law & as such the reassessment done in consequence to that needs to be quashed. 4. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in rejecting the contention of the appellant that the assessment order is bad in law & is liable to be quashed as the same has been made without first disposing of the objections raised by the appellant against the reopening. 5. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in upholding the reassessment framed under section 143 (3) despite the fact that no notice under section 143 (2) has been issued, a fact admitted by the A.O. in remand report. 6. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition of Rs.32,85,500/- on account of training & development expenses. 7. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in rejecting the contention of the appellant that no reliance can be placed on the statement of Sh. S.K. Gupta recorded at the back of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the learned CIT (A) has erred both on facts and in law in rejecting the contention of the appellant that no reliance can be placed on the statement of Sh. S.K. Gupta recorded at the back of the assessee without providing cross examination. 8. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in rejecting the contention of the appellant that the A.O. has misinterpreted the statement of Sh. S.K. Gupta & has wrongly used the same against the assessee, as the appellant has not been named in the said statement & there is no allegation against it coming out of the said statement. 9. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in arbitrarily CIT (A) has erred both on facts and in law in arbitrarily rejecting the evidence submitted in support of the expenditure incurred despite the fact that even in the remand report A.O. has not pointed out any defect and has not given any adverse comment on that. 10. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in rejecting the contention of the appellant that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. did provide opportunity to the assessee to place its claim in its defence. The statutory notice u/s 143 (2) could not be issued in this case." 5. Similarly, for assessment year 2006-07, he invited our attention towards the following observations of the Assessing Officer (copy of remand report is filed at pages 138 to 142 of the paper book):- "Ground No.1 : Assessment order is in bad in law and no notice under section 143 (3) was issued: The perusal of assessment records shows that the A.O. did provide opportunity to the assessee to place its claim in its defence. The statutory notice u/s 143 (2) could not be issued in this case." 6. Thus, it was pleaded by him that either the case of the assessee should be accepted on the submissions made by the Assessing Officer before the CIT (A) in the remand report or to determine this fact the matter may be restored back to the file of the CIT (A) as this issue will go to the root of the matter and if no notice has been issued or served on the assessee u/s 143 (2), then, the re-assessment order passed by the Assessing Officer will be invalid. 7. On the other hand, learned DR submitted that for verificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the return of undisclosed income filed by the assessee without issuing a notice under s.143 (2) then he would not have committed any mistake. This is a situation where the s.143(2) notice would not be necessary at all." (emphasis ours) 9. The aforementioned view of Hon'ble jurisdictional High Court has now been confirmed by the Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon (supra) wherein their lordships have observed as under:- "15. We may now revert back to s.158BC(b) which is the material provision which requires our consideration. Sec.158BC (b) provides for enquiry and assessment. The said provision reads "that the A.O. shall proceed to determine the undisclosed income of the block period in the manner laid down in s.158BB and the provisions of s.142, sub-ss. (2) and (3) of s.143, s.144 and s.145 shall, so far as may be, apply." An analysis of this sub-section indicates that, after the return is filed, this clause enables the A.O. to complete the assessment by following the procedure like issue of notice under s.143(2)/142 and complete the assessment under s.143 (3). This section does not provide for accepting the return as provided under s.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings. That amendment was brought into the statute by virtue of proviso to Section 148 inserted by Finance Act, 2006 and such position of law has been explained by Hon'ble Madras High Court in the case of CIT vs. Mrs. C. Malathy (2007) 294 ITR 532 (Mad). 11. For an authority that for re-assessment proceedings also the requirement of issuing notice u/s 143 (2) within 12 months is mandatory, reference can be made to the decision of Hon'ble Madras High Court in the case of CIT vs. C. Palaniappan (2006) 284 ITR 257 (Mad) wherein it has been held that completion of re-assessment without issue of notice u/s 143 (2) within 12 months is invalid. From the above discussion of law, it is clear that even in respect of reassessment proceedings if the Assessing Officer, on receipt of return in response to notice u/s 148, requires further information or explanation, then, he has to serve notice u/s 143 (2) and issue of notice u/s 143 (2) is not necessary in a case where he accept the return as it has been filed by the assessee. 12. The facts of the present case are that for assessment year 2005- 06, the assessee had originally filed the return of income on 28th October, 2005. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued to the assessee or served upon it. Learned CIT (A) has not recorded such findings. The issuance and service of notice u/s 143 (2) will go to the root of the matter as, according to the law explained above, if notice is not issued and served u/s 143 (2), then, it will affect the validity of re-assessment order. In this view of the situation, without going into other grounds, we are of the opinion that these matters requires to go back to the CIT (A) to determine such fact and re-adjudicate the matter again by keeping in view the aforementioned law explained in the above part of this order. We direct accordingly. Since we are restoring these appeals to the file of CIT (A), to adjudicate on the legal issue which affects the very validity of the assessment orders, we do not express any opinion on merits of the addition and other grounds which have been agitated by the assessee in the present appeals as they can be decided only after determination of the legal issue regarding issuance and service of notice u/s 143 (2). 15. In the result, for statistical purposes, the appeals filed by the assessee are allowed in the manner aforesaid. The order pronounced in the open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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