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2016 (1) TMI 32 - ITAT DELHI

2016 (1) TMI 32 - ITAT DELHI - TMI - Reopening of assessment - non-issuance of notice u/s 143(2) - Held that:- In the present case, it is an admitted fact that the AO did not issue any notice u/s 143(2) of the Act. A similar issue has been decided by the Hon’ble Jurisdictional High Court of Allahabad in the case of CIT Vs Rajeev Sharma reported at (2010 (5) TMI 600 - ALLAHABAD HIGH COURT) wherein by following judgment of of ACIT Vs Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) it has .....

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Income Tax (Appeals) grossly erred in dismissing the ground on non-issuance of notice u/s 143(2) of the IT Act, 1961, merely because the same is not issued during the assessment proceedings and such controversy is not permissible to raise at this stage or by general ground, while such legal ground can be taken at any stage. 2. Because, the learned Commissioner of Income Tax (Appeals) grossly erred in not appreciating the fact that in the absence of notice u/s 143(2) of the IT Act, 1961 after com .....

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ejudice to above but only as an alternative, the learned Commissioner of Income Tax (Appeals) totally failed to consider the merits of the case/material placed before and rejected the transaction without finding any evidence wrong or even without conducting direct enquiry despite assessee s specific request to conduct same at his cost. As such notice u/s 148 and assessment proceedings, itself are illegal and in alternative and without prejudice to the same, additions are arbitrary and bad in the .....

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the case u/s 148 of the Act for the reason that the assessee had received an amount of ₹ 1,00,000/- through cheque no. 449508 on 10.07.2002 which had escaped assessment. The assessee did not file any return of income but relied on return already filed on 31.03.2004. The AO framed the assessment at an income of ₹ 2,08,980/- by making the addition of ₹ 1,00,000/- which was received from M/s Ayush Fincap Pvt. Ltd. 5. Being aggrieved the assessee carried the matter to the ld. CIT( .....

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l Bus Services (2012) 204 Taxman (All) 6. The ld. CIT(A) asked the remand report from the AO who furnished the same vide letter dated 02.09.2013 stated therein as under: ….3. But since no return of income was filed in compliance with notice u/s 148 within stipulated time of 30 days, nor any compliance to the notice issued u/s 142(1) on 16.07.2010 and 12.10.2010 was made, finally a notice under section 144 read with section 147/148 was issued on 6.12.2010 requiring the assessee s explanati .....

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ed time limit of 30 days in compliance with the notice u/s 148 on 26.03.2010 which was duly served on 27.03.2010. Therefore, the contention of the assessee that he submitted return on 19.11.2010 deserves to be rejected. In fact no return of income was submitted by him in response to the notice u/s 148 dated 26.03.2010. In view of these facts and circumstances of the case the proceedings initiated u/s 147 of the Act vide notice u/s 148 date 26.03.2010 were legally correct and justified. The proce .....

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ion 147 vide order dated 29.12.2010 and not u/s 147/143(3) of the I.T. Act, 1961 as mentioned by the assessee in his written submissions. It is also admitted fact that copy of reasons recorded before issuance of notice u/s 148 of the Act was also made available to the assessee during the course of assessment proceedings. In my opinion the various decisions of Hon ble Courts relied upon by the assessee in the written submissions are, therefore, appear to be not applicable to the facts of the pres .....

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ance deserves to rejected and case law relied does not apply on the assessee. But said make shift justification is wrong on the record as under: a) Reason are to be supplied only and only after acceptance of compliance of notice u/s 148 as per the law of land as pronounced in GKN driveshaft case-259 ITR 19 (SC) and admittedly Ld. AO has supplied reasons which automatically proves that compliance is accepted now the same stand is changed to cover up the non-issuance of notice u/s 143(2) b) Assess .....

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34 taxmann.com 211 (Agra-Trib.), the same stand is taken which is dealt in para 7.1/page 3 of order already filed and ultimately order is quashed. While facts of present case is even better where AO himself supplied the reasons in response to letter seeking the same on the basis of compliance of notice. As such when admittedly, notice u/s 143(2) is not issued even after accepting the compliance than proceedings are void ab initio as per the settled law in terms of earlier submissions and hence i .....

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is issue and considered the submission of the assessee that the order being bad in law, as general in nature. 9. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee can raise the legal ground at any stage. Therefore, the ld. CIT(A) ought to have disposed off the ground raised by the assessee for non-issuance of notice u/s 143(2) of the Act. It was further stated that issuance of notic .....

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ilar issue has been decided by the Hon ble Jurisdictional High Court of Allahabad in the case of CIT Vs Rajeev Sharma reported at (2011) 336 ITR 678 wherein by following judgment of the Hon ble Supreme Court in the case of ACIT Vs Hotel Blue Moon (2010) 321 ITR 362, it has been held that the assessment could not be sustained for lack of service of statutory notice u/s 143(2) of the Act. The head note of the said case read as under: If the Assessing Officer, for any reason, repudiates the return .....

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