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2015 (12) TMI 706 - ITAT DELHI

2015 (12) TMI 706 - ITAT DELHI - TMI - Reopening of assessment - assessee has taken up the ground that no valid notice u/s. 143(2) was served upon him - Held that:- Non-issue of notice u/s. 143(2) after filing of the return of the Assessee, by way of letter, makes the assessment order passed u/s. 143(3) r.w.s. 147 bad in law. See ITO vs. Naseman Farms Pvt. Ltd. & Ors. [2015 (4) TMI 764 - ITAT DELHI ] - Decided in favour of assessee. - ITA Nos. 4171 to 4175 /Del/2015 - Dated:- 16-10-2015 - J. Sud .....

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ound, we are disposing of these appeals by passing a common order for the sake of brevity, we first deal with ITA No. 4171/Del/2015 (AY 2003-04). 2. Ld. CIT(A) has discussed the issue in dispute at para no. 6, at page no. 29 in his order. In this paragraph the Ld. CIT(A) held that the Service of Notice u/s. 143(2) is only an administrative requirement and not a legal requirement. He concluded as follows:- "Thus, it is held that the AO has not erred in not issuing the notice u/s. 143(2) with .....

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I filed in response to the Notice u/s. 148 dated 30.3.2010. 4. On this factual matrix, I find that the issue is squarely covered in favour of the Assessee and against the Revenue. The ITAT, 'C' Bench, Bangalore in its order dated 10.10.2014 in the case of Shri GN Mohan Raju vs. ITO passed in ITA No. 242 & 243(Bang)2013 (AYrs 2006-07 & 2007-08), has been held as follows:- "7. This brings us to the crux of the issue i.e. whether notices under section 143(2) is mandatory in a r .....

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the case of Hotel Blue Moon (supra). At para-24 of the judgment their Lordship has held that Section 143(2) was applicable to a proceedings u/s 147/148 also, since proviso to section 148 of the Act, granted certain specific liberties to the revenue, with regard to extension of time for serving such notices. No doubt, Hon'ble Madras High Court in the case of Areva T and D India Ltd.,(supra) had held that issue of notice u/s 143(2) was procedural in nature. However, Co-ordinate Bench in the ca .....

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First instance when the assessee requested the AO to treat the returns originally filed by it as returns filed pursuant to the notices u/s 148 of the Act, was on 05-10- 2010 which is clear from the narration in the order sheet which is reproduced here under; "Sri M.Srinivas Rao Mannan, CA appeared in response to notices issued u/s 143(2) & 142(1) and requested that the return of income filed originally shall be treated as return of income filed in response to notice u/s 148. He has been .....

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is called for at this juncture. It is reproduced hereunder; "143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section(1) of section 142, the AO shall i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified .....

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serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his officer or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return. (Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished). Once the original return filed by the assessee was subject to processing u/s 143(1) of the Act, the proc .....

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which would allow an AO to treat the return which was already subject to a processing u/s 143(1) of the IT Act, as a return filed pursuant to a notice subsequently issued u/s 148 of the Act. However, once an assessee itself declare before the AO that his earlier return could be treated as filed pursuant to notice u/s 148 of the IT Act, three results can follow. Assessing Officer can either say no, this will not be accepted, you have to file a fresh return or he can say that 30 days time period b .....

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ts were completed under section 143(3) read with section 147. Or in other words AO accepted the request of the assessee. This in turn makes it obligatory to issue notice u/s 143(2) after the request by the assessee to treat his earlier return as filed in pursuance to notices u/s 148 of the IT Act was received. This request, in the given case, has been made only on 05-10-2010. Any issue of notice prior to that date cannot be treated as a notice on a return filed by the assessee pursuant to a noti .....

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fore, quash the assessment done for the impugned assessment years. Since the appeals of the assessee are allowed on its ground 3, other grounds are not adjudicated." - ITAT, 'E' Delhi Bench decision dated 08.4.2015 passed in the case of ITO vs. Naseman Farms Pvt. Ltd. & Ors. In ITA No. 1175/Del/2011 (AY 2002- 03) wherein the Tribunal has followed the decision of the Apex Court in the case of ACIT vs. Hotel Blue Moon (2014) 321 ITR 362 (SC). The Tribunal has held as under:- " .....

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on 143(2) of the Act. If the notice is not issued to the assessee before completion of the assessment, then the reassessment is not sustainable in the eyes of law and deserves to be cancelled. In view of above facts and circumstances of the present case, the issue in dispute raised in additional ground relating to non issue of the mandatory notice u/s. 143(2) of the Act is decided in favour of the assessee and we hold that the impugned assessment order dated 31.12.2009 passed u/s. 147/143(3) of .....

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not served within the prescribed period, the assessment order is invalid Reassessment-Notice-Assessee intimating original return be treated as fresh return-Reassessment proceedings completed despite assessee filing affidavit denying serviced of notice under section 143(2)-Assessing Officer not representing before Commissioner (Appeals) that notice had been issued- Reassessment order invalid due to want of notice under section 143(2)- Income-tax Act, 1961, ss. 143, 147, 148(1), prov.-ITO v. R.K. .....

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ebon India Ltd. (2012) 347 ITR 583 (P&H) 5. We find that concurrent finding has been recorded by the CIT(A) as well the tribunal on the question of date of service of notice. Notice was not served within the stipulated time. Mere giving of dispatch number will not render the said finding to be perverse. In absence of notice being served, the AO had no jurisdiction to make assessment. Absence of notice cannot be held to be curable under s 292BB of the Act. CIT Vs. Mr. Salman Khan, ITA No.508 .....

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sence of notice under section 143(2) (prior to the insertion of section 292BB), the reassessment order cannot be sustained. In the present case, the reassessment year involved relates to the period prior to the insertion of Section 292BB. In this view of the matter, the appeal is dismissed with no order as to costs. DCIT Vs. M/s Silver Line, ITA No.1809,1504,1505 & 1506/Del/2013 vii. The Hon'ble ITAT of Agra Bench, in the case of ITO v. Aligarh Auto Centre reported in 152 TTJ (Agra) 767, .....

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not in dispute that AO never issued any notice u/s. 143(2) of the IT Act. The Revenue merely contended that the CIT (A) should have appreciated the provisions of section 292BB of the IT Act. Section 292 BB of the IT Act provides as under: "292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly ser .....

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inserted by the Finance Act, 2008 w.ef. 01.04.2008. ITAT, Delhi Special Bench in the case of Kuber Tobacco Product Pvt. Ltd. vs. DCIT, 117 ITD 273 held that section 292BB has been inserted by Finance Act, 2008, has no retrospective effect and is to be construed prospectively. The assessment order under appeal is 2001-02. Therefore, the provision of section 292BB of the IT Act would not apply in the case of the assessee. Further, no notice u/s. 143(2) has been issued or served upon the assessee. .....

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rder of the Id. CIT (A) for interference. " (v) The Hon'ble Mumbai Bench of the ITAT has, in the case of Sanjeev R Arora v. ACIT [IT (SS)A No.103/Muml2004 dated 25.7.2012], recorded its findings as under. "Even, the irregularity in proper service of notice which can be treated as curable under section 292B of the Income-tax Act is only in the cases where the notice under section 143(2) was issued properly and within the period of limitation and the assessee did not raise any object .....

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agraphs and also in views of the judicial pronouncements (supra), we are of the view that the reassessment's made for the assessment years under consideration have become invalid for not having served the mandatory notice u/s 43(2) of the Act on the assessee. It is ordered accordingly. 7.10We have since decided that the re-assessment proceedings concluded u/s 147 r/w 143(3) of the Act were invalid for the AYs under dispute, the issues raised by the revenue in its appeals and also the Cross o .....

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