TMI Blog2021 (12) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... id in three circumstances provided therein, namely where assessee has participated in the proceedings it would not be permissible him to raise objection that (i) notice was not served upon him; (ii) was not served upon him in time; (iii) was served upon him in an improper manner and held that all the circumstances contemplated under section 292BB of the Act are in case where a notice has been issued, has either not been served upon the assessee or not served in time or has been served in an improper manner. The said provision clearly does not contemplate the case where no notice has been issued at all. Issuance of notice under section 143(2) of the Act prior to filing of return of income was invalid and in absence of valid notice under section 143(2) of the Act, the assessment order is rendered invalid. - Decided against revenue. - ITA Nos. 310, 311, 312, 350, 351 and 352/SRT/2019 - - - Dated:- 7-12-2021 - Pawan Singh, Member (J) And Dr. Arjun Lal Saini, Member (A) For the Appellant : Himanshu Gandhi, CA For the Respondents : H. P. Meena, CIT-DR ORDER Per Pawan Singh, Judicial Member 1. This set of six appeals out of which three appeals by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the order of the Ld. CIT(A) may be set-aside that of Assessing Officer may be restored to the above extent. 3) The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal. 3. Brief facts of the case are that the assessee is a company engaged in diamond business, filed its return of income for the A.Y. 2011-12 on 24.08.2011 declaring income of ₹ 40,57,161/-. The case of assessee was reopened on the basis of information received from Investigation Wing, Mumbai that assessee has availed bogus purchase/sale accommodation entries from Rajendra Jain Group. As per information received, it was mentioned that a search and seizure action under section 132 of the Act was carried out by DGIT (Investigation), Mumbai on Rajendra Jain Group and Dharmi Chand Jain Group, who were involved in accommodation entries through their various concerns. Rajendra Jain Group managing proprietary, partnership and companies for providing such bogus entries. The assessee is one of the beneficiaries of such accommodation entries. During the year under consideration, the assessee has shown purchases from fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded on the basis of statement of Rajendra Jain Group recorded under section 132(4) of the Act, that these purchases are bogus, the said statement was retracted later on. The assessee also stated that in absence of purchase, there cannot be any sale and that the AO is silent on this issue. On the non-existence of parties at the given address, the assessee stated that there may be possibility that assessee has changed their address for business correspondence or place of business, but they are regularly filing return of income and paying tax accordingly, so it cannot be stated that these parties are not exist. The explanation of assessee was not accepted by the AO. The AO concluded that while retracting the statement Rajendra Jain has not given any supporting evidence. The assessee only tried to substantiate that purchases made are genuine and payments is through banking channel. Mere payment through banking channel is not a certificate that purchases made by assessee were genuine. Rajendra Jain Group were running racket of issuance of bogus bills in the name of various concerns/companies and firms. The modus-operandi disclosed by Rajendra Jain was also recorded by the AO in para 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of information received from DGIT (Investigation), Mumbai. The AO received information that assessee is one of the beneficiaries of bogus purchases shown from various entities managed by Rajendra K Jain. The assessee was served with the notice under section 148 of the Act dated 30.03.2018. In response to notice under section 148 of the Act, the assessee vide his reply/letter dated 24.05.2018 stated that its original return may be treated as return in response to the notice under section 148 of the Act. The reply/letter of assessee was not accepted by AO. The AO vide his letter dated 20.08.2018 again asked (insisted) the assessee to file return of income for the A.Y. 2011-12. The assessee filed return of income for the A.Y. 2011-12 on 28.09.2018. The copy of return of income filed in response to notice under section 148 of the Act on 28.09.2018 is placed on record at page no. 46 of paper book. The ld. AR for the assessee submits that after filing return of income on 28.09.2018, no notice under section 143(2) of the Act was issued or served upon the assessee. This fact is duly accepted by the ld. CIT(A) in para 8.2 of his order. The ld. CIT(A) despite accepting the submission of as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT-DR for the Revenue submits that Investigation Wing made full-fledged investigation against the Rajendra Jain Group. Rajendra Jain Group was indulging in providing accommodation entries. On the basis of report of Investigation Wing and based on search enquiries, it was conclusively proved that Rajendra Jain was indulging in providing accommodation entries without actually delivery of goods. The assessee has not filed any proof of delivery of goods. The ld. CIT-DR prayed for upholding the addition of 100% purchases shown from various concerns managed by Rajendra Jain Group. 11. We have considered the rival submission of both the parties and have gone through the orders of Lower Authorities carefully. There is no dispute that the case of assessee was reopened under section 147 of the Act. Notice under section 148 of the Act dated 30.03.218, was initially issued to the assessee. In response to the said notice, the assessee filed its reply dated 24.05.2018 contended that the return of income filed originally may be treated as return in response to notice under section 148 of the Act. The reply/letter dated 24.05.2018 was not accepted by the AO. The AO vide his letter dated 20.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal was justified in treating the assessment as invalid on the ground that no notice under section 143(2) of the Income Tax Act, 1961 had been issued after the assessee filed the return of income? 10. The facts are not in dispute. The Assessing Officer initially issued notice under section 148 of the Act on 20.03.2009, seeking to reopen the assessment of the respondent assessee for assessment year 2005-06. Subsequently, notices under section 148 of the Act came to be issued to the assessee on 26.03.2009, 08.03.2010, 05.07.2010 and lastly on 04.10.2010. 11. It may be noted that the Assessing Officer recorded the reasons for reopening the assessment only on 20.07.2010, therefore, it is only the notice dated 04.10.2010, which can be said to have been issued in accordance with the provisions of section 148 of the Act, viz., after recording of the reasons. It appears that in response to the notice under section 148 of the Act, the respondent-assessee, by a letter dated 19.07.2010, had asked the Assessing Officer to consider the earlier return of income filed by it as the return filed in response to the notice. After the assessee addressed the above letter dated 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rely in support of the return: Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. 14. On a plain reading of the above provision, it is manifest that it contemplates that when an assessee files a return under section 143 of the Act, and the Assessing Officer finds that any claim as described therein is inadmissible, he is required to serve a notice to the assessee specifying particulars of such claim and a date on which he should produce or caused to be produced, any evidence or particulars specified therein on which the assessee may rely in support of such claim. 15. Section 292BB of the Act reads thus; 292BB. Where an assessee has appeared in any proceeding or co-operated in any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22. Clause (b) of section 158-BC by referring to sections 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 section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with.' 19. Thus, the Court held that if an assessment has to be completed under section 143(3) read with section 158BC of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised that such notice has not been served upon the assessee or has not been served in time or has not been served properly, namely, where there is a defect in the service of notice. This provision does not apply to a case where no notice has been issued at all. In the facts of the present case, at the cost of repetition, it may be stated that no notice under section 143(2) of the Act has been issued after the assessee had filed its return of income and hence, section 292BB of the Act would not be attracted. 23. In the light of the above discussion, this Court does not agree with the view adopted by the Punjab and Haryana High Court in case of Ram Narain Bansal (supra). Insofar as the decision of the Madras High Court in case of Venkatesan Raghuram Prasad (supra) is concerned, that was a case where notice was in fact, issued, but it was contended that such notice was not served properly. Therefore, the said case was a case of defective service of notice, which would be squarely covered by the provisions of section 292BB of the Act. The said decision, therefore, has no applicable to the facts of the present case. 24. In the light of the fact that non-issuance of a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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