TMI Blog2020 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh, Accountant Member For the Assessee : Shri G.V.N.Hari, AR For the Revenue : Shri D.K.Sonowal, CIT DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the revenue against the order of the Commissioner of Income Tax [Appeal]-1, Guntur in Appeal No.17/2017-18 dated 19.02.2019 and cross objections are filed by the assessee for the Assessment Year (A.Y.) 2016-17. 2. All the grounds of appeal are related to the validity of issue of notice u/s 143(2) of the Income Tax Act, 1961 (in short Act ). For the A.Y.2016- 17, the assessee has not filed the return of income. The Assessing Officer (AO) found that the assessee had entered into Joint Development Agreement (JDA) vide document No.16218/2015 of SRO, Mangalagiri on 04.12.2014 with M/s Good Life Homes, Vijayawada for construction of 70 residential flats in the ratio of 47.34% (33 flats) to land lords share and 52.66% (37 flats) to builders share. As per the agreement, the assessee has transferred his share of land admeasuring 2089.90 sq.yards to the builder. Since the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) and uphold the validity of issue of notice u/s 143(2) and requested to remit the matter back to the file of Ld.CIT(A) to decide the issue on merits. 5. On the other hand, the Ld.AR submitted that in the instant case, notice u/s 148 was issued on 15.02.2017, in response to which the assessee had filed the return of income on 03.04.2017 admitting total income of ₹ 3,91,230/-. Subsequently the AO had issued the notice u/s 143(2) on 10.04.2017 in respect of the return filed on 03.04.2017. Since the department has treated the return as invalid, the entire assessment proceedings relating to the return of income filed on 03.04.2017 becomes infructuous, thus argued that the same cannot be taken as valid proceedings. The Ld.AR further submitted that the assessee has filed the second return of income on 27.06.2017 admitting total income of ₹ 34,45,890/- which was not taken for assessment. Notice issued in respect of invalid return cannot be taken cognizance and separate notice required to be issued for initiation of assessment proceedings in response to the return filed. Therefore, submitted that the AO has to issue fresh notice on valid return. In the absen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f clarity and convenience, we extract relevant part of the order of the Ld.CIT(A) which reads as under : I have considered the material facts and decisions relied upon by the appellant including report of the AO for disposal of additional Ground. The appellant flied a return of income on 03-04-2017 in response to notice u/s. 148 of the Act issued by the AO. The appellant failed to submit signed ITR - V to the competent authority, hence, return filed was not accepted. However, the AO in the meantime i.e. 10-04-2017 issued notice u/s. 143(2) of the Act and served on 12- 04-2017. The appellant, as the first return filed was not accepted, filed one more return on 27.06.2017 stating that it is an original return filed and the same was accepted by CPC, Bangalore on 06-07-2017. The appellant contended that the valid return for the year was filed on 27-06- 2017 and thereafter the AO has not issued notice u/s. 143(2) of the Act to convert the case into scrutiny hence claimed that the assessment is void. The AO in the report stated that the appellant was represented through his AR throughout the assessment proceedings and in no occasion objected the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pting the return as provided under Section 143(1)(a). The assessing officer has to complete the assessment under Section 143(3) only. In case of default in not filing the return or not complying with the notice under Sections 143(2)/142, the assessing officer is authorized to complete the assessment ex-parte under Section 144 Clause (b) of Section 158 BC by referring to Section 143(2) and (3) would appear to imply that the provisions of Section 143(1) are excluded. But Section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158- BC, notice under Section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under Section143(2) cannot be a procedural irregularity and the some is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. The other important feature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in Section 165 has to be generally followed. The expression so far as may be has always been construed to mean that those provisions may be generally followed to the extent possible. The learned counsel for the respondent has brought to our notice the observations made by this Court in the case of Maganlal Vs Jaiswal Industries, Neemach and Ors., [(1989) 4 SCC 344], wherein this Court while dealing with the scope and import of the expression as far as practicable has stated without anything more the expression 'as far as possible' will mean that the manner provided in the code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied. 16. The case of the revenue is that the expression so for as may be apply indicates that it is not expected to follow the provisions of sect/an 142, sub Sections (2) bad (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue is that the expression so for as may be apply indicates that it is not expected to follow the provisions of sect/an 142, sub Sections (2) bad (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the revenue, since we do not see any reason to restrict the scope and meaning of the expression 'so for as may be apply'. In our view, where the Assessing Officer in repudiation of the return filed under section 1588C(a) proceeds to make on enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143. 6.1. In the instant case, there was no notice issued u/s 143(2) of the Act subsequent to filing the return of income. Even in the case of Hotel Blue Moon Hon ble Supreme Court held that section 292BB comes to the rescue of the department only after issue of notice u/s 143(2). In the instant case, there is no notice issued u/s 143(2) by the AO subsequent to filing the valid return of income. Therefore, we hold that the case of the assessee is squarely covered by the decision of Hon ble Supreme Court in the case of Hotel Blue Moon (supra) agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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