TMI Blog2016 (4) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... face, it is mandatory for the AO has to issue a notice under Section 143(2) of the Act for proceeding further. It is thus not open for the AO to not issue a notice under Section 143(2) of the Act and proceed directly under Section 144 of the Act by rejecting the return filed by the Assessee. - ITA No. 696, 697, 699/2015 - - - Dated:- 22-3-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Mr Dileep Shivpuri, Senior Standing Counsel and Mr Sanjay Kumar, Junior Standing Counsel For the Respondent : Mr Gautam Jain and Mr Piyush Kumar Kamal, Advs ORDER 1. These appeals have been filed by the Revenue under Section 260A of the Income Tax Act against a common order dated 4th March, 2015 ('the impugned order& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted with effect from 1st April, 2005 by an order dated 12th January, 2006 passed by the Director of Income Tax (Exemption). 4.2 The Assessee was established pursuant to a Cabinet decision no.125 dated 16th March, 1995 whereby an amount of ₹ 38.74crores from the erstwhile lottery fund, which was lying in a fixed deposit, was transferred to the Welfare Fund of the Assessee. The balance sheet of the Assessee for the year ended 31st March, 2002, 31st March, 2003 and 31st March, 2004 (relevant to AY 2002-03, 2003-04 and 2004-05) reflected an amount of ₹ 53.26 crores as Deposit transferred from Delhi Lotteries . The AO believed that the income of the Assessee had escaped assessment for the relevant AYs since the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.8 Mr Dileep Shivpuri, learned Senior Standing counsel submitted that since the Assessee had failed to file its returns for the relevant AYs within the time prescribed in the notices issued under Section 148 of the Act, the said returns were invalid and were rightly ignored by the AO. He submitted that in the circumstances no notice under Section 143(2) of the Act was required to be issued to the Assessee. He further submitted that the present assessments were framed under Section 144(1)(b) of the Act - on account of failure on the part of an Assessee to comply with all terms of a notice issued under Section 142(1) of the Act or failure to comply with directions issued under Section 142(A) of the Act - and issuance of notice under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where valid returns have been filed the AO could proceed to frame an assessment under Section 144 of the Act without issuance of any notice under Section 143(2) of the Act. 9. It is now well established that if the AO does not accept the return filed by the Assessee on its face and he is required to issue a notice under Section 143(2) of the Act and provide an opportunity to the Assessee to produce the necessary material in support of his return. Mr Shivpuri had argued that a notice under Section 143(2) was required to be issued only in cases where the AO considers it necessary or expedient to do so and in cases where the Assessee had not filed its response to the notice under Section 142(1) it was not necessary for the AO to issue such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that a belated return filed by the Assessee prior to the assessment cannot be ignored as an invalid return, prima facie, appears to be merited. However, in the facts of the present case, the said question does not arise as the AO had issued a notice under Section 142(1) of the Act on 30th November, 2011, inter alia, calling upon the Assessee to file its return. Further, on 10th December 2007, the AO was informed that the Assessee was in the process of filing its return and an adjournment was requested. The AO had acceded to his request, which would be wholly unnecessary if the AO was of the view that a belated return would be invalid. Thus, in the facts of the present case, the returns filed by the Assessee could not be ignored b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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