TMI Blog2023 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... see u/s 143(3), but, without completing the assessment, he took recourse to reopen the assessment under section 147 by issuing notices u/s 148, then, in that case, the Income Tax Officer acted without jurisdiction in issuing the notices. As in the case of Tarajan Tea Co (P) Ltd Trustees of H.E.H. the Nizam Supplemental Family Trust [ 1999 (2) TMI 722 - SUPREME COURT] has held that AO cannot reopen the assessment on the same reasons which were before him at the time of the original proceedings. Since in the instant case the case of the assessee was selected for limited scrutiny to verify the cash deposit by issuance of notice u/s 143(2) and 142(1) and since the assessee has filed the requisite details, therefore, merely because no order was passed u/s 143(3), the Assessing Officer, in our opinion, cannot issue notice u/s 148 by reopening the assessment for escapement of the very same income which was the subject matter of scrutiny proceedings. We accordingly quash the re-assessment proceedings. Decided in favour of assessee. - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER For the Appellant : Shri Y.V. Bhanu Narayan Rao, CA For the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed objections for reopening of the assessment. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee and disposed off the objection by passing a speaking order. The assessee also challenged the validity of the notice issued u/s 143(2) which was rejected by the Assessing Officer. The assessee further raised various objections, such as the notice u/s 143(2) was served without considering the contents of the assessee s letter and reasons recorded were not given within the reasonable time, that the case was originally selected for compulsory scrutiny etc., which were rejected by the Assessing Officer. 6. So far as the merits of the issue is concerned, the Assessing Officer rejected various explanations given by the assessee and made addition of Rs. 60.00 lakhs to the total income of the assessee u/s 69A of the Act as unexplained bank deposit. 7. The assessee filed objection before the DRP who vide order dated 24.1.2022 dismissed all the grounds raised by the assessee before them by observing as under: 2.6.1 Having considered the submissions; the assessee has filed return of Income for AY 2017-18 on 03-03-2018. The case was selected for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver been taken up for scrutiny, there is an under-assessment of income to the extent of Rs. 60,00,000. 2.6.6. We note that as per IT Act, 1961 there is no bar on issuing a notice u/s * for invoking proceeding /s 147 of the IT Act, 1961 in case where 143 proceedings were initiated by the AO but got time barred by limitation. 2.6.7 The AO action is as per the section 147 Explanation 2(b) of the IT Act 1961 which is reproduced as below is applicable in instant case of assessee. (b)where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return. 2.6.8 As per the submission of the assessee's letter dated 23-02-2021. The assessee has replied to the notice U/s 142(1) dated 22-02-2021 and show cause notice dated 12-02-2021. That the money of Rs. 60 lacs belong to assessee's late father and late brother. The money of Rs. 60 lacs belongs to my late father and late brother: my brother was unmarried and he had no dynasty. My late Brother, P. Siram sold the property adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case laws as per Annexure Vi of the paper book dated 14 th June 2021 2.6.14 The case laws relied by the assessee are distinguishable in facts and in law and are not applicable in the present case where the issue involved is cash deposit of Rs. 60 lacs by the assessee in his own current account of AXiS bank. 2.6.15 We don't find any infirmity in the action of the AO in issuing notice U/s 148 of the IT Act 1961 and proceedings u/s 147 of the IT Act. These grounds of objections are here by rejected. 2.4 Ground of objection No. 4: Objection No.4 14 The Ld. Assessing Officer erred in belated serving of notice u/s.143(2) of the I.T Act, 1961 read with sec. 147 of the IT Act, 1961 after expiry of 6 months from the end of the financial year in which the assessee filed the return of income. 2.4.1 Having considered the submissions, the assessee contention is that the notice U/s. 143(2), the requirement is serving the notice on the assessee within 6 months from end of the financial year in which the return of income files by the assessee. In the case of the assessee, time limit for serving the notice u/s 143(2) expires by 30/09/2020 as the return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of the sectic69A of the IT Act,1961 maintaining the books of accounts is not mandatory condition. We don't find any infirmity in the application of section 69A of the Act in the case of the assessee. We reject this ground of objection. 8. The Assessing Officer in the final order dated 15.2.2022 passed u/s 147 r.w.s. 144C of the I.T. Act made addition of the same. 9. Aggrieved with such order of the Assessing Officer, the assessee is in appeal before the Tribunal by raising the following grounds: 1. The Assessment order processed u/s. 147 read sec.144C (13) by the Ld. Assessing Officer is erroneous as per law and facts and also on presumptions, as the appellant's deposits in bank account cannot be presumed as his income or deemed income for invoking the provisions of sec. 147. 2. When on the basis of original return filed on 30/3/2018 was selected for limited scrutiny in CASS on the reason of verification of bank deposits made before demonetization and having initiated assessment proceedings by serving a notice u/s. 143(2) and later on issued notice u/s. 142(1), i.e., after starting scrutiny assessment proceedings, without completing assessment u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether independent proceedings this version of the learned Assessing officer is incorrect. The Scrutiny proceedings were 'closed' as per the computer screen shot. There is no such provision in the income tax act to close assessment proceedings. The ITO ward 2(2), Karim Nagar served the defective notice and transferred the case to ACIT circle 6(1). There was time to serve notice u/s. 143(2), for ACIT Circle 6(1) being the Prescribed income tax Authority', but he has not served the notice. It is only 'not taking action' and not a technical defect . Hence, the case is to be taken as time barred. 6. In the proceedings of the Dispute resolution panel 1, Bengaluru giving directions under sec. 144C(5) of the income tax act, 1961, the Learned Commissioners of the Income tax, being the members of Dispute Resolution Panel(DRP) clearly stated at para 2.6.5 of the proceedings in Page 3 that the limited scrutiny proceedings u/s sec. 143(3) is barred by limitation. When the Department itself agreeing that the scrutiny proceedings initiated were barred by limitation, it is unjust to invoke the provisions of sec. 147. 7. As stated at para 2.6.9 in page 4 of the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come as money deposited in the bank account will not come under the preview of income. The question of deemed income cannot be assumed or imagined by the learned assessing officer before invoking the provisions of sec. 147. 11. The notice u/s. 143(2)) read with sec. 147 was served on the assessee on 4/11/2020. Actually, such notice should be served within 6 months from the end of the financial year in which the return of income is filed by the assessee. Such period will end by 30/09/2020, hence the notice served on 04/11/2020 is an invalid notice. At para 2.3 in page 11 of the assessment order the assessing officer stated that there was an embargo on issuing notice to the assessee till September 18th, 2020 in view of the CBDT's direction. Even then still there was 12days time to the Assessing Officer for serving notice u/s. 143(2). The TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISONS) ACT, 2020 dated 29/09/2020 will not speak anything about the service of a notice. As stated in chapter 2 Clause 3(1) and sub clause A of the said Act, the words are not applicable to assessee's case because no time limit has been prescribed for any notice in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er not representing before commissioner (Appeals) that notice had been issued.. Reassessment order invalid due want of notice u/s 143(2), Income tax, 1961, s. 43, 147,148, prov.... ITO Vs. R K Gupta (308) ITR 49 (Del) tribu. --- The above Judgements of Hon'ble Supreme court relates to law (Legal issue) and the findings cannot be stated as distinguishable facts and law, the decision by the Hon'ble Supreme court is binding on lower Authorities in India and also binding on the public as per article 141 of the constitution of India. Hence, it is incorrect to say by the learned Commissioner's (Members) of Dispute Resolution Panel that the case laws are not applicable to the Appellant Assessee. 14. The learned assessing Officer is incorrectly applied the provisions of sec. 69A, though all the conditions of the section are not applicable in the assessee's case. The assessee is an NRI and not having any activity in INDIA. He has not filed any return of income in earlier years as there is no taxable income in India. He has not maintained any books of Accounts. Since, the word used between the conditions in the act is and and not or , all the conditions s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 292 ITR 49 (Del), he submitted that the Hon'ble High Court in the said decision has held that once an inquiry has been initiated by the Assessing Officer, it cannot but result in either the return being accepted as having been correctly computed by the concerned assessee, or in an assessment being conducted and concluded thereon by the Assessing Officer. 13. Referring to the decision of the Hon'ble Calcutta High Court in the case of Mohindra Mohan Sirkar vs. Income Tax Officer reported in (1978) 112 ITR 47 (Cal), he submitted that the Hon'ble High Court in the said decision has held that once a notice u/s 143(2) is issued, the Assessing Officer has to complete the assessment u/s 143(3). 14. Referring to the decision of the Hon'ble Supreme Court in the case of CIT vs. Tarajan Tea Company (P) Ltd reported in 236 ITR 447, dated 4.2.1999, he submitted that the Assessing Officer cannot reopen the assessment on the same reason which were made before at the time of the original proceedings. Referring to the said decision, he submitted that the notice u/s 148 cannot be issued purely on a change of opinion since during the original scrutiny assessment proceedings al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut got time barred by limitation. Further, there is no mention in the Act not to reopen the case when the scrutiny proceedings u/s 143(3) got time barred. Referring to provisions of section 147, he submitted that the reopening of the assessment is in accordance with law. Therefore, the grounds raised by the assessee on the issue of validity of re-assessment proceedings should be quashed. 18. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned DRP and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find in the instant case the assessee filed his return of income u/s 139(4) on 3.3.2018 and the case was selected for limited scrutiny for verification of the cash deposits during the year. We find the Assessing Officer issued notice u/s 143(2) on 9.8.2018 copy of which is placed at 26 to 27 of the Paper Book which is as under: 19. Similarly, we find the Assessing Officer in the notice issued u/s 143(2) dated 17.9.2019 has enclosed the following Annexure copy of which is placed at pages 31 32 of the Paper Book: 20. We find the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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