Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (2) TMI 466 - ITAT PUNE

2016 (2) TMI 466 - ITAT PUNE - TMI - Legality of reopening of assessment - non issue of notice under section 142(1) - Held that:- In the present case, as noted earlier, law itself does not oblige the Assessing Officer to issue notice u/s 143(2) in the absence of return u/s 139 or u/s 142(1). Concurrently, we notice that the impugned assessment was framed after proper opportunity were afforded to the Assessee by issuing notice under section 142(1) in sync with principles of natural justice. There .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

service of the notice not statutorily required in the facts of the case will not, in our view, impinge upon the legality of impugned re-assessment order. we are of the considered view that in the absence of return filed in accordance with law or any valid return being on record, the objections raised by the assessee is not sustainable in law and is thus without any merit. - Decided against assessee

Addition on advances to sister concern instead of using the fund on the object of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he CIT(A) as noted above. The advance of ₹ 13,00,000/- made to VISEA Trust therefore can be said to be out of surplus accumulated and remained at the disposal of the assessee and does not offend provisions of section 11(2) of the Act in any manner. Hence, we are not inclined to interfere with the order of the CIT(A) - Decided in favour of assessee - ITA No.849/PN/2014 - Dated:- 20-1-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Shri V. L. Jain For The Res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2004-05 declaring total taxable income at Nil. The Assessing Officer reopened the assessment in the case of the assessee by issuance of notice under section 148 of the Act dated 01.09.2008 and completed the assessment by making following additions :- a. Unexplained advances : Rs.13,00,000/- b. Amount not spent on objects of trust : ₹ 9,48,585/- 3. The assessee assailed the orders of the Assessing Officer and the CIT(A) before the Pune Bench of the Tribunal in ITA No.127/PN/2011; order date .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

concerning impugned legal issue and restored it back to the file of the CIT(A) to decide the same after examination of records. Pursuant thereto, the CIT(A) vide order dated 11.03.2014 decided the legal issue against the assessee and held that the impugned assessment made by the Assessing Officer under section 143(3) r.w.s. 147 of the Act is valid and cannot be set-aside merely on the ground that notice under section 143(2) was not served having regard to the facts of the case. This limited iss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

issuance of notice u/s 148 of the Income Tax Act, 1961, the impugned assessment order is bad in law, null, and void ab initio and without jurisdiction and hence the same may please be vacated/ annulled. 3. The learned CIT(A) erred in holding a loan given of ₹ 13,00,000/- as income of the appellant treating the transaction as non-genuine. 4. The appellant craves leave to amend or alter any of the grounds of appeal or add to the same, if demand necessary. 5. The Ld. Authorized Representativ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

without any notice under section 143(2) of the Act. On a query from the Bench, he submitted that the impugned return dated 09.03.2007 is neither a belated return filed within the limitation provided under section 139(4) nor is a return filed in response to notice under section 147/148 of the Act. He further clarified that no return has been filed in response to notice under section 148 of the Act per se. No letter has been submitted to the Assessing Officer to treat the return filed dated 09.03. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l Blue Moon, (2010) 321 ITR 362 (SC) and CIT vs. Rajeev Sharma, (2011) 336 ITR 678 (All.) and also CWT vs. HUF of H.H. Late Shri J.M. Scindia, (2008) 300 ITR 193 (Bom) to support his contention that in the absence of notice under section 143(2), the impugned re-assessment order in appeal stands vitiated. 6. The Ld. Departmental Representative for the Revenue, on the other hand, relied upon the order of the CIT(A) and submitted that non-issuance of notice under section 143(2) by itself will not i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Grounds No.1 and 2 concerning this basic issue first. To begin with, the short question before us is whether nonissuance of notice under section 143(2) will invalidate the re-assessment order framed under section 143(3) r.w.s. 147 of the Act in the facts of the case set out or not. We notice that the return of income filed dated 09.03.2007 is not a return under section 139(1) or under section 139(4) of the Act. The return has been filed beyond the time limit available under the scheme of the Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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 therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: [Provided that no notice under this clause shall be served o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 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.]] 7.2 It is also appropriate to simultaneously read the relevant provisions of section 148 also in this context which is read as under :- [Issue of notice where income has escaped assessment. 148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uch return were a return required to be furnished under section 139 :] [ [underlined for emphasis by us] 7.3 On a combined reading of these aforesaid two provisions, we observe that when the Assessing Officer serves notice under S. 148 of the Act, the Assessee is required to file return in response thereto. The provisions of S. 148 seeks to treat the return filed in response to notice served under S. 148 as return filed under S. 139 of the Act. This is followed by notice under machinery provisio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ith, the provisions of section 143(2) are rendered procedural and does not affect the validity of the assessment. As noted above, return filed in response to notice under section 148 is deemed to return filed under section 139 and all the provisions of the Act shall apply accordingly. As a consequence, the notice for assessment has to be necessarily issued as mandated under section 143(2) of the Act in so far as the return filed in response to S. 148 is concerned. 7.4 As can be seen, section 143 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee has neither filed any return in response to notice u/s 148 nor has requested the Assessing Officer to treat the impugned nonest return to be taken as filed against notice under section 148 of the Act. Therefore, impugned nonest return did not get validated at any stage. 7.5 Section 143(2) of the Act mandates issuance of notice under this section only when the return is filed u/s 139 or u/s 142(1) of the Act. The return filed in response to notice u/s 148 is also treated as return filed u/s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lied upon by the Ld. Authorized Representative for the assessee, the return was duly filed in response to section 148 or a valid under section 139 was in existence and on these facts the Hon ble Courts have held that issuance of notice u/s 143(2) is mandatory and cannot be disregarded and bypassed. 7.7 In the present case, as noted earlier, law itself does not oblige the Assessing Officer to issue notice u/s 143(2) in the absence of return u/s 139 or u/s 142(1). Concurrently, we notice that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er and was in acquiescence and privy to the re-assessment proceedings. Thus, interest of the Assessee is not jeopardized in any manner. Omission to serve or any defect in the service of the notice not statutorily required in the facts of the case will not, in our view, impinge upon the legality of impugned re-assessment order. 7.8 Ld. AR also advanced that AO has not completed the assessment on the premise that no return was filed at all. As per the Ld. AR, the AO has proceeded on the basis of r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any valid return being on record, the objections raised by the assessee is not sustainable in law and is thus without any merit. 8. In the result, the Grounds No.1 and 2 of the appeal of the assessee are dismissed. 9. Having dealt with the legal objection raised on behalf of the assessee, we shall now proceed to adjudicate the issue on merits as per Ground No.3 of the appeal. 10. As per para 3 of the assessment order, it is observed by the Assessing Officer that the assessee has inter-alia stat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee contended before the CIT(A) in first round of proceedings that the amount of loan given to VISEA Trust was duly appearing in the audited statement of accounts and audit report filed in Form No.10B. The assessee also contended before the CIT(A) that the object of the VISEA Trust was similar to that of the assessee Trust and the amount of ₹ 13,00,000/- given to the said Trust by the assessee was not in the nature of investment or deposit and hence the exemption under section 11(2) c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of provisions of section 11(2) r.w.s. 11(3)(a) of the Act. The relevant operative para of the order of the CIT(A) is reproduced hereunder :- 6.3 I have carefully considered the facts of the case. The AO has given the following finding for the impugned addition:- It is also noticed that; the trust has failed to incurred expenditure more than 85% on the object of the trust and the trust has failed to submit Form No.10 before the due date of filing of return, hence an amount of ₹ 9,48,585/- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e income this year on the objects of the Trust. From the income and expenditure account the total income admitted this year is ₹ 45,43,948/-, the appellant has given the following particulars of the expenditure incurred during the year. Total income- Rs.4543948/- Income & Expenditure Rs.29,13,771/- As per asstt. Order. Taxes, Rent, etc. ₹ 35,698/- Fixed Assets (Education) Building Construction - Rs.38,03,965/- Furniture fixtures, etc. - Rs.13,65,354/- Rs.51,74,319/- Rs.51,74,319/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was for its stated purpose i.e. education and has been rightly claimed as utilized for the purpose of the object of the Trust. The above expenditure has been properly verified and certified by the Accountant in Form No.10B. With regard to the AOs observation that the Form No.10B was not filed within due time is seen that the said form was available before the AO at the time of passing the impugned assessment order, which the AO has also mentioned while dealing with the issue. The ld. AR has brou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e case of CIT v. Nagpur Hotel Owners Association (2001) 247 ITR 201 (S.C.). The Apex Court has observed that it is reasonable to presume that the intimation u/s 11 has to be furnished before the Assessing Authority completing the concerned assessment, therefore, the compliance of the requirement of the Act will have to be any time before the assessment proceedings. As may be seen from the facts in the present case the Form No.10B was filed by the appellant alongwith the return of income on 09/03 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version