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2016 (4) TMI 172 - DELHI HIGH COURT

2016 (4) TMI 172 - DELHI HIGH COURT - TMI - Assessment u/s 144 - compulsion of notice under Section 143(2) - Held that:- 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

It is now well settled by a number of decisions (See: Pr. CIT v. Silver Line and Anr.[2015 (11 .....

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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') passed by the Income Tax Appellate Tribunal (&# .....

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Revenue has limited its challenge to the ITAT.s finding that the assessment orders in question are as having been passed without issuing any notice under Section 143(2) of the Act. It is contended on behalf of the Revenue that in the facts of the case are that no such notice was necessary before passing assessment orders under Section 144 of the Act. The above conclusion is disputed and it is further contended on behalf of the Assessee that the issue stands fully covered by the decision of this .....

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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 .....

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AO. 4.4 It is relevant to note that the notices issued under Section 148 of the Act called upon the Assessee to file its returns for the respective AYs within a period of 30 days from the date of the notices. Concededly, the Assessee failed to file the same within the specific period. 4.5 Thereafter, the AO issued notices (all dated 12th September, 2007) under Section 142(1) of the Act, which were followed by similar notices on 15th November, 2007 and 30th November, 2007. All the aforesaid noti .....

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ct was issued or served on the Assessee and the assessment orders indicate that the AO did not take note of the returns filed by the Assessee while passing the assessment orders. 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 circumsta .....

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ended that the position would be no different even if the returns were filed in the regular course. Mr Dileep Shivpuri relied on the decision of this Court in Ashok Chaddha v. ITO: (2011) 337 ITR 399 (Delhi) in support of its contention that no notice under Section 143(2) was required to be issued. 5. Mr Gautam Jain, learned counsel appearing for the Assessee countered the submissions made by Mr Shivpuri and urged that the returns filed by the Assessee could not be ignored as being invalid. He s .....

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ing granted the adjournment for filing the return it would not be open for the AO to then ignore the said returns. He submitted that in any event, the returns were filed within a reasonable time of the last notice issued under Section 142 of the Act - 30th November, 2007. 7. We have heard the learned counsel for the parties. 8. At the outset, we are unable to accept Mr Shivpuri's contention that even in cases where valid returns have been filed the AO could proceed to frame an assessment und .....

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y 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 notice under Section 143(2). In our view, this contention is bereft of any merits and completely ignores the scheme of the machinery provisions for assessment under the Act. It is now well settled by a number of decisions (See: Pr. CIT v. Silver Line and Anr.: 283 CTR 148 (Del), ACIT v. Hotel Blue Moon: 321 ITR 362 (SC) and CIT v. Paw .....

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