TMI Blog2016 (8) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer after considering the replies of the assessee has passed the order on December 30, 2008. In view of these facts and circumstances the plea of the learned Departmental representative that the returns filed by the assessee were invalid returns do not hold any force and this argument is rejected. - Decided in favour of assessee Notice not Issued under section 143(2) - as per revenue time available for completion of assessment was not sufficient - Held that:- Arguments of DR that the time available for completion of assessment was not sufficient and therefore, notice was not required to be issued under section 143(2) also do not hold any force in view of the fact that on December 29, 2008 itself the Assessing Officer could have served the notice under section 143(2) on the counsel of the assessee which would have been sufficient compliance with the provisions. As per the order-sheet entries the counsel of the assessee took part in assessment proceedings on December 29, 2008 and December 30, 2008. The issue of notice under section 143(2) is a mandatory requirement which cannot be cured even after the insertion of section 292BB of the Act as held in various judicial pron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the assessment records could not find the service of notice under section 143(2) of the Act, but he submitted that notices under section 143(2) in these cases was not required to be issued and served as the assessee had filed returns of income under section 148 on December 29, 2008 and assessments were going to be time barred by December 31, 2008 and therefore, there was no occasion available with the Assessing Officer to issue notices under section 143(2) of the Act. He submitted that the assessee deliberately kept on delaying the filing of returns in response to the notice under section 148 and therefore, these returns are not valid returns. The learned Departmental representative submitted that since in these cases his application for adjournment has been rejected, therefore, he may be permitted to file written submissions in this regard. After hearing the learned Departmental representative we deemed it appropriate to permit him to file written submissions in respect of additional ground of appeal for non-service of notice. The learned Departmental representative after a few days filed written submissions. 6. The learned authorised representative, on the other hand, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules. After the receipt of information and after conducting further enquiries, a survey on the business premises of the assessee Shri Anil Gupta was carried out on March 25, 2008 under section 133A of the Income-tax Act, 1961. The office of the chartered accountant of the assessee was also covered and assessment record of the assessee was gathered from his office. The manager of NCCF was issued a summon under section 131 of the Income-tax Act, 1961 and all the records of the assessee transactions made with Army through NCCF were impounded. 2. After going through all the documents found from NCCF and after recording statement of the assessee wherein he admitted that he was involved in all these transactions which had been detected by the Department, the return filed by the assessee for the assessment years 2004-05 and 2005-06 were examined. The assessment record of the assessee revealed that he had not disclosed these transactions in his return of income for the assessment years 2004-05 and 2005-06. Accordingly, the cases of the assessee for the assessment years 2004- 05 and 2005-06 were reopened under section 147 of the Act. 3. Notices under section 148 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961 are reproduced hereunder : 'Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer 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 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 on the assessee on or after the 1st day of June, 2003 ; (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not under-stated the income or has not computed excessive loss or has not under paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return were a return required to be furnished under section 139.' 13. Without prejudice to the legal position mentioned above, even if the return filed by the assessee for the assessment years 2004-05 and 2005-06 on December 29, 2008 is treated as filed in response to notice issued under section 148 on March 31, 2008, there was no time available with the Assessing Officer to serve a notice under section 143(2) of the Act upon the assessee since the assessment proceedings were going to become barred by time limitation on December 31, 2008. It is abundantly clear that the assessee kept on adopting non- co-operative attitude for a long period between since the date of issue of notice under section 148 on March 31, 2008 and filed the return only on December 29, 2008 i.e. only two days before the time barring date of the case. Act of the assessee in filing the return just 2 days before the time barring date is nothing but a pure mischief to thwart the attempt of the Department to bring to tax concealed income in this case. 14. In view of the legal and factual matrix of the case mentioned above, it is prayed that additional ground of appeal taken by the assessee regarding n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns filed by the assessee were not valid returns and secondly there was no time available with the Assessing Officer to issue notices under section 143(2) of the Act. 8. On the other hand, the learned authorised representative had maintained that the returns were filed in view of the notice under section 148 and the Assessing Officer had taken cognizance of the returns filed by the assessee and has noted down the proceedings in the order-sheet and in this respect our attention was invited to a copy of order-sheet placed at (paper book pages 28 to 30) and in view of this fact it was submitted that the Assessing Officer himself had accepted the returns and therefore, the arguments of the learned Departmental representative that the returns were not valid do not hold any force. 9. To adjudicate on the issue in the above cases it is necessary to visit the relevant sections as contained in section 148 of the Act which reads as under : 148.(1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the assessee had failed to furnish the return : Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. In the present cases the Assessing Officer did not find any defect in the returns of income filed by the assessee and therefore, these returns cannot be treated as invalid returns. The arguments of the learned Departmental representative, that these returns were invalid returns do not hold any force in view of the above provisions of section 139(9) and also in view of the fact that the Assessing Officer in view of the returns filed by the asses see carried out assessment proceedings on December 29, 2008 and December 30, 2008 and passed the order on December 30, 2008 after hearing the counsel of the assessee. For the sake of convenience the scanned copy of order-sheet has been made part of this order. *** *** *** The entries in the order-sheet indicate that the Assessing Officer on the basis of the returns filed by the assessee on December 29, 2008 required the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) served upon him in an improper manner. In other words, once the deeming fiction comes into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to section 292BB however, carves out an exception to the effect that the section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292BB cannot obviate the requirement of complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under section 143(3) it is necessary to issue a notice under section 143(2) and in the absence of a notice under section 143(2) the assumption of jurisdiction itself would be invalid. [paras 9 and 10] This principle is no longer in doubt having due regard to the law laid down by the Supreme Court in the decision in Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362/188 Taxman 113. While construing the provisions of Chapter XIV-B of the Act in relation to block assessments, the Supreme Court in that decision considered the effect of section 143(2) and has, therefore, clearly held that the omis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
