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TMI Blog2013 (1) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 admittedly by the AO in remand report. (ii) That the order passed by the AO has been upheld by the learned CIT (A) despite a clear finding of fact that the notice u/s 143(2) was never issued, in clear violation of the specific direction given by the Hon'ble ITAT in this regard. 3. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in not interpreting the judgment of the Delhi High court in the case of Madhya Bharat Energy Corp Ltd, ingnoring the judgment of the apex court in the case of R Dalmia 286 ITR 480, whereby it has been held that once the return has been furnished in response to notice under section 147, all the requirements of assessment, as contemplated in section 143 and 144 shall apply. 4. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in upholding the validity of the reopening of assessment under section 147 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal. 3. The brief particulars of the case are that assessee's assessments originally were computed u/s 143(1) which were later on reopened u/s 147/148 of the IT Act. The assessment orders were reopened in view of searches on S.K. Gupta Group of Companies, who were indulging in providing accommodation entries and from the statements recorded in their cases the revenue had found that assessee had taken accommodation entries and therefore, the cases were reopened. The assessee, in view of, notices u/s 147/148 had written to the Assessing Officer that returns filed originally may be treated as returns filed in response to notice u/s 147/148. The Assessing Officer then completed the reassessment proceeding without issuing notices u/s 143(2) of the IT Act. The ld. CIT (A) also did not consider the contentions of assessee and the matter finally reached Hon'ble Tribunal, which vide its order dated 11th Feb. 2011 disposed of appeals filed by assessee. The matter was remanded back to the office of CIT (A) with the direction to record finding of fact as to whether necessary notices were issued u/s 143(2) of the Act or not. The relevant paragraph of Hon'ble Tribunal Orders is repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced above. However, issue is covered by the order of Hon'ble Delhi High Court in the case of Madhya Bharat Energy Corpn. Ltd. reported at 2011, wherein, in para 11 and 12 of the order Hon'ble Delhi High Court has held as under: "11. As per explanation 2(b) to Section 147 of the Act, where a return income is furnished, but no assessment has been made and it is noticed by the AO that an assessee had understated the income, it will be deemed to be a case where income chargeable to tax had escaped assessment. In the case of Ranchi Club Vs. CIT, 214 ITR 643 (Patna) it was held in a case where only intimation was sent, notice under Section 148 of the Act could be issued in terms of Explanation 2(b) to Section 147 of the Act. The case of Mahanagar Telephone Nigam Ltd. (Supra) confirmed that "So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate to proceed under Section 147 and failure to take steps under section 143 (3) will not render the assessing officer powerless to initiate reassessment proceedings even when intimation under section 143 (1) had been issued." 12. It is noted that the impugned asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the High Court. Continuing his arguments, the ld. AR submitted that issuance of notice u/s 143(2) is mandatory in the case of reassessment u/s 147 read with Section 148 and in support he placed reliance on the judgments in the following cases: a. CIT Vs. Rajeev Sharma, (2011) 336 ITR 678 (Alld.) b. DIT Vs. Society For Worldwide Inter Bank Financial Telecommunications 323 ITR 249 (Del) c. CIT Vs. Deep Baruha (2010) 329 ITR 362 (Gauhati) 8. The ld. AR further argued that even if there is any judgment of any High Court other than jurisdictional Delhi High Court which is against the assessee even then the judgment favourable to the assessee will be applicable as was held by Hon'ble Supreme Court in the case of CIT Vs. Vegetable Products Ltd. 88 ITR 192. He further argued that Finance Act 2006 with retrospective effect from the 1st October, 1991 has provided that where return has been furnished u/s 148 during the period commencing on 1st October, 1991 and ending on 1st September, 2005 the reassessment proceedings shall not be invalid because the notice was not served u/s 143(2) before the expiry of time limit for making such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Act which was required to be served upon him has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was: i. Not served upon him ii. Not served upon him in time iii. Served upon him in an improper manner. 15. Provided that nothing contained in this Section was applicable where the assessee has raised such objection before the completion of such assessment or reassessment. The above section was inserted by Finance Act 2008 w.e.f. 1.4.2008 and Hon'ble Delhi High Court in the case of CIT Vs. Mani Kakar 2009 (supra) had held that provisions of Section 292BB are applicable from assessment year 2008-09 and the cases under consideration relates to assessment years 2005-06 and 2006-07. Similarly Hon'ble Delhi High Court in the case of ITO Vs. Nasemen Farms P. Ltd. (2010) 47 DTR 33 has held that provisions of Section 292BB are applicable only from assessment year 2008-09 and also do not apply where there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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