TMI Blog2018 (10) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to explain the opening capital and source of advances through notices on various dates from December 2012 to February 2013. No response was made by the assessee. Subsequently, AO vide draft letter dated 28.02.2013 asked to comply and give response to the draft assessment order on 11.03.2013. The assessee did not respond to the draft assessment order where certain additions were proposed on account of unexplained opening capital balances of partner, unexplained loan extended to Mr. and Mrs. Shah and disallowance of interest. In absence of any explanation, the AO made the additions. Notice under Section 143(2) is required to be given only when return is furnished. Furnishing of the return is a sine qua non for issuance of notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 148 of the Income Tax Act 1961 was issued by which assessee was asked to file return of income tax within 30 days from the date of service of the notice. In response to the said notice, the assessee did not file return. In the absence of any explanation, an order of assessment was passed on 12.03.2013 making additions of ₹ 3,90,786/- on account of disallowance of interest paid on Capital to the partners of the Firm. Sum of ₹ 2,60,51,425/- on account of unexplained Opening Capital Balance of Partners of the Firm as per Balance Sheet drawn as on 31.03.2005 was also added. Sum of ₹ 1,30,50,000/- on account of unexplained loan extended to one Sh. G. H. Shah and Mrs. Shah, was also added to the income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original return which was accepted and also filed additional return in response to the notice under Section 148 of the Act. However, the aforesaid aspect of the matter has not been appreciated by the Tribunal. Despite service of notice none has appeared on behalf of the respondent, therefore, the respondent was proceeded ex-parte by an order dated 01.08.2018. 6) We have considered the submissions made by the learned counsel for the Revenue and have perused the record. Section 148 of the Act permits issuance of notice in certain circumstances when it is discovered that income has escaped assessment and sub section (1) thereof mandates a return to be filed upon assessee being served a notice under such provisions, whereupon the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(2) cannot be dispensed with. Thus, it is evident that ratio laid down by the Supreme Court in the aforesaid decision is that a notice under Section 143(2) is mandatory, if the return as filed is not accepted and an assessment order is to be made at variance with the return filed by the assessee. The aforesaid decision would not apply to a case where no return is filed by the assessee as would be axiomatic from plain reading of Section 143(2) of the Act also. It is also pertinent to mention here that in CIT v. Madhya Bharat Energy Corporation Ltd. and CIT v. Vision Inc., the assessee had filed the original return in response to the notice under Section 148 of the Act. Therefore, the aforesaid decisions have no applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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