TMI Blog2014 (7) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of law and principles on the issue and can maintain the appeals before him, after giving due opportunity to the assessee for seeking condonation of delay. - matter remanded back - appeals of the Assessee and Cross objections of the Revenue are allowed for statistical purposes. - ITA. Nos. 311 & 312/Hyd/2010, C. O. Nos. 51 & 52/Hyd/2013 - - - Dated:- 18-6-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Petitioner Assessee Mr. P.N. Moorthy For the Respondent : Mr. P. Soma Sekhar Reddy ORDER Per B. Ramakotaiah, A.M. These four appeals are by Assessee and Revenue for assessment years 1995-96 and 1996-97. Since common issues are involved, these appeals are heard together and are decided by this common order. 2. Briefly stated, assessee is in the business of finance and investments and for A.Y. 1995-96, it filed a belated return of income on 26.11.1998 declaring income of ₹ 1,83,008/- without payment of taxes on admitted income. Similarly, for the A.Y. 1996-97 assessee filed return of income belatedly on the same date by declaring income of ₹ 6610/- that too without any payment of admitted tax. In order to reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before the ITAT, Hyderabad and the ITAT observed vide order dt 25-02-2005 that prima facie, perusal of the material papers indicate that it was difficult to hold that the orders suffers from mistake apparent from record. However, it has permitted the assessee to raise the contention before the Ld.CIT(A) in quantum appeals pending on the orders under section 144/147. 3. After receipt of the orders of the Ld. CIT(A) dt.26.06.2003, assessee approached the Ld. CIT(A) that he has given time up to 23.07.2003. Realising the mistake, the Ld. CIT(A) vide letter dated 14.08.2003 wrote to the DCIT, Circle 2(1), Hyderabad to make enquiry regarding the genuineness of shareholders in whose name share capital investments were shown and to send a report before 30.09.2003. However, as the orders were passed by the Ld. CIT(A), assessee approached the Hon ble High Court in a writ petition. The Hon ble High Court vide order dated 13.02.2004 in W.P.No.1887 of 2004 has set aside the said appeal orders of the Ld. CIT(A) and has directed to decide afresh. Therefore, the matters were again placed before the Ld. CIT(A), both on the contention of initiation of proceedings under section 147 as well as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detailed order of the Ld. CIT(A) is as under : 4. I have carefully considered the submissions made on behalf of the appellant and the facts of the case. I have gone through both the assessment orders dated 18.03.2002 passed by the A.O. u/s. 144/147 of the Act, for the A.Y. 1995-96 and 1996-97. From the grounds of appeal raised by the appellant for both the assessment years and the petitions u/s. 154 of the Act, filed by it subsequent both the assessment years, which were referred to by the Hon'ble ITAT, in order dated 25.02.2005, it is seen that the appellant has mainly raised issues. The first issue is that notice issued by the AO u/s. 148 of the Act in case, has not been properly served. It is further submitted that notice u/s. 143(2) issued by the AO for both the assessment years were beyond time limitation under proviso to said section. It is further stated that the AO was not justified in passing the assessment order u/s. 144 of the Act, without issuing a show cause notice the same. It is further stated that the AO was not justified in making the additions of ₹ 5,57,36,570/- and ₹ 2,47,19,300/- towards income from undisclosed sources, in the said assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in serving the notice (e.g. serving the notice on a Manager who has no authority to accept service), if the assessee admits that he has received the notice and asks for adjournment, the assessee cannot be subsequently allowed to plead that there was no valid and legal service of notice. 5.2. In the case of CWT Vs. Ms. Ilia Pal Chowdhary (1971) (82 tm 936) (Cal.), for reassessment under wealth tax act, 1957, notices u/s. 17(b) of the WT Act, issued to the assessee, was served on the Accountant of the assessee, who was authorized by the assessee to represent in connection with Wealth tax assessment proceedings. The assessee has not taken any objection to the services of the said notice on the Accountant. In response to the said notices, the assessee has filed returns and reassessment orders were passed. During hearing of appeal before the Appellate Assistant Commissioner (AAC), the assessee had taken a ground that service of notices on the Accountant did not constitute proper service. However, the AAC held there was proper service of notices. He further held that the assessee having filed returns, without objections, had waived any irregularity in service. Though on second appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings and has filed submissions. After completion of assessment, and after the decision of appeal by the CIT(A), following appeal filed against the said assessment order, the assessee in its further appeal before the Hon'ble ITAT has taken a plea that the notice sent by the AO was not properly served. Though, the Hon'ble ITAT has accepted such contention of the assessee, on further appeal by the Department, the Hon'ble High Court, while observing that irregularity in notice was waived by the assessee, held that the assessment was valid. In this regard, it is pertinent to reproduce the relevant part of the decision of the Hon'ble High Court (as per head note), which are as under : - It was a clear case of waiver end/or abandonment of the ground which was not raised at the proper time and place. It could be regarded as an irregularity in effecting service of the notice on the assessee but not an invalidity as alleged by the assessee so as to annul the entire assessment. The very fact that the assessee thereafter appeared before the Assessing Officer and went on participating in the entire proceedings on the merits for more than one year, clearly sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Since in the instant case, the AO has initiated proceedings u/s. 147 of the Act, and accordingly has issued a notice u/s. 148 of the Act for both the assessment years, having regard to the above provisions contained in sub-section (2) to section 143 and agreeing with the earlier remand report of the AO dated 08.07.2008, I am of the view that there is no infirmity in the said assessment orders passed by the AO. Even if it Is contended that the notices u/s. 143(2) of the Act, for both the assessment years, were issued belatedly, then also the same would not Invalidate the assessments made by the AO in this case for both the assessment years. Accordingly, such ground raised by the appellant is rejected . 9. As can be seen from the above, the fact is that assessee did not file the returns in time even though it has taxable income. Admittedly, the return was filed on 26.11.1998 i.e., almost after end of two years from A.Y. 1995-96 and just before end of two years for A.Y. 1996-97. In these circumstances, we are of the opinion that A.O. has correctly initiated the proceedings under section 147 for bringing to tax the escaped income, which was also admitted income by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, the assessee has paid the tax due on the income returned by him, or (b) Where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him . 11. Assessee company neither paid self-assessment tax on the income admitted nor paid any advance tax as required under section 249(4) of the Act. Since the assessee admitted before the A.O. to treat the belated return filed earlier as return filed in response to notice under section 148 vide letter dated 24.06.1999, it has to be considered that assessee has preferred the appeal without payment of admitted tax. Therefore, the Ld. CIT(A) could not have entertained the appeals as was done by him. These facts were also not brought to the notice of the Ld. CIT(A) earlier nor assessee placed before the Hon ble High Court when it proceeded on writ petition nor during the restored appeal proceedings before the Ld. CIT(A). Be that as it may, now when this fact has been was brought on record by way of cross-objections by Revenue, we are of the opinion that the orders of the Ld. CIT(A) are to be set aside and the appeals filed before the Ld. CIT(A) are to be restor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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