TMI Blog2022 (1) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... in law also Ld. Assessing Officer grossly erred in initiating reassessment proceeding u/s 147 of the Act. 2. On the facts circumstances of the case and in law also ld. A.O. grossly erred in providing copy of the reasons recorded after the lapse of 16 months from the date of application i.e. dated 29/11/2013 and the copy was given on dated 10/03/2015. It is therefore clear that on the date of issuing notice u/s 148 no reasons were recorded by ld. A.O. 3. On the facts circumstances of the case Ld A.O. also erred in not allowing the proper time after rejection of preliminary objections as the preliminary objections were rejected on dated 13/03/2015 and the assessment order has been passed on dated 25/03/2015. It is against to the principles of natural justice. We rely on several decision of Hon'ble High Court. 4. On the facts circumstances of the case Ld A.O. grossly erred in initiating reassessment proceedings without independent application of mind as the notice has been issued account of audit para. 5. No Notice under section 143(2) of the Act was issued before passing the assessment order. This fact is also accepted by Ld A.O. in his remand report. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Coordinate Bench of this Tribunal dated 23/12/2019 passed in ITA No. 347/JP/2017 in the case of M/s Mangala Ispat (Jaipur) Ltd. Vs ACIT. Thus, the ld. AR has submitted that in view of the above decisions, the impugned assessment order is invalid and liable to be quashed. 5. On the other hand, the ld. DR has submitted that the A.O. and the ld. CIT(A) has clearly stated in their respective orders that the notice U/s 143(2) of the Act was duly issued and served upon the assessee. She has also filed a report of the A.O. regarding the notice issued U/s 143(2) of the Act. Thus, the ld. DR has heavily relied upon the orders of the authorities below and submitted that even otherwise when the assessee has not raised this issue during the assessment proceedings and thus this is covered under the provisions of Section 292BB of the Act. 6. I have considered the rival submissions as well as the relevant material on record. The undisputed facts as emerged from the records are that the original assessment was completed U/s 143(3) of the Act on 01/03/2013. Thereafter the A.O. issued notice U/s 148 of the Act on 01/11/2013 to reassess the income on account of disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther this Tribunal vide order dated 17/11/2021 directed the AO/ld.DR to produce the copy of ordersheet of the reassessment proceedings regarding the issuance of notice U/s 143(2) of the Act. In response to the said direction of the Tribunal, the A.O. has filed certain documents alongwith letter dated 21st December, 2021 which contains the notice issued U/s 143(2) dated 30/09/2011. It appears that this notice dated 30/09/2011 was issued by the then A.O. in the original scrutiny assessment U/s 143(3) of the Act completed on 01/03/2013, therefore, this notice has no relevant in so far as the proceedings U/s 147 are concerned in this appeal. Except the notice dated 30/09/2011, the A.O. has not produced any material or record to show that the notice u/s 143(2) of the Act was issued after the return of income filed by the aseessee in response to notice U/s 148 of the Act. Thus, it is manifest and evident from the record that no notice was issued by the A.O. U/s 143(2) of the Act and the reassessment was completed without issuing the notice U/s 143(2) of the Act which renders the reassessment order invalid and void ab initio. The Coordinate Bench of this Tribunal in the case of M/s Manga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the period of limitation provided under section 143(2) of the Act. Hence we find that there is no notice issued by the AO under section 143(2) in the case of the assessee. The AO has not stated anything about the issuance of notice under section 143(2) in the proceeding sheet of the assessment record which gives the details of the proceedings conducted by the AO in chronological order. Thus the AO did not issue any notice under section 143(2) prior to completion of reassessment in the case of the assessee. The notice under section 143(2) is a mandatory requirement and gives the jurisdiction to the AO to proceed with the scrutiny assessment. It is a jurisdictional condition and in the absence of the notice under section 143(2), the order passed by the AO is invalid for want of jurisdiction. Once the assessee has filed the return of income in response to notice under section 148, then the notice under section 143(2) is a mandatory jurisdictional requirement for taking up the return of income under scrutiny. The Hon ble Supreme Court in case of ACIT vs. Hotel Blue Moon (supra) while considering the requirement of notice under section 143(2) in block assessment proceedings, has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have or could have indicated that also. A reading of the provision would clearly indicate, in our opinion, if the assessing officer, if for any reason, repudiates the return filed by the assessee in response to notice under Section 158 BC(a), the assessing officer must necessarily issue notice under Section 143(2) of the Act within the time prescribed in the proviso to Section 143(2) of the Act. Where the legislature intended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14 August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provisions of the Act. It reads : Save as otherwise provided in this Chapter, all the other provisions of this Act shall apply to assessment made under this Chapter . This is an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. The provisions which are specifically included are those which are available in Chapter XIV-B of the Act, which includes section 142 and sub-sections (2) and (3) of section 143. 18. On a consideration of the provisions of Chapter XIV-B of the Act, we are in agreement with the reasoning and the conclusion reached by the High Court. The Hon ble Apex Court has held that the notice under section 143(2) is a mandatory condition and cannot be dispensed with and omission on the part of the AO to issue notice under section 143(2) cannot be a procedural irregularity and same is not curable. A similar view has been taken by the Hon ble Supreme Court in case of CIT vs. Laxman Das Khandelwal (supra) and held in para 9 and 10 as under :- 9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led that prima facie the Assessee has understated the income or has computed excessive loss or has underpaid the tax in any manner . The AO has the discretion to issue a notice under Section 143 (2) if he considers it necessary or expedient to do so. This exercise by the AO under Section 143 (2) of the Act is qualitatively different from the issuance of a notice under Section 142(1) of the Act, which as noted hereinbefore, is in a standard proforma. 19. The Court is unable to accept the submission of the Revenue that in the present case, no return was filed by the Assessee pursuant to the notice issued to it under Section 148 of the Act. If after receiving the letter dated 1st April 2011 of the Assessee the AO was of the view that the return originally filed in the Saral Form could not be treated as the return pursuant to the notice under Section 148 of the Act, then he should have drawn the attention of the Assessee to that fact. In the present case all that the AO did was to send a notice under Section 142 (1) of the Act. The Assessee was not made aware as to why he was required to file a return. Had a notice been issued to him under Section 143 (2) of the Act, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised on the merits of the addition. The Tribunal has followed the decision of the Hon ble Supreme Court in the case of ACIT Vs Hotel Blue Moon 321 ITR 362 (SC) as well as in the case of CIT Vs. Laxman Das Khandelwal (supra) wherein the Hon ble Supreme Court has held that Section 292BB of the Act does not save complete absence of notice and it covers only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. The Tribunal has also relied upon the various decisions of the Hon ble High Court wherein it was held that the reassessment completed without issuing a notice U/s 143(2) of the Act is not sustainable in law and the same is invalid. Following the earlier order of this Tribunal as well as the binding precedents of the Hon ble Supreme Court as well as High Courts, the reassessment order passed by the A.O. without issuing the notice U/s 143(2) of the Act is not sustainable in law and accordingly the same is quashed. 7. Since the reassessment order is quashed for want of notice U/s 143(2) of the Act then the other grounds raised by the assessee become infructuous and I do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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