Assessment quashed due to invalid notice. Assessee's appeal allowed.

The Tribunal quashed the assessment made under section 143(3) r.w.s. 147, holding that the notice under section 148 issued during the pendency of section 142(1) proceedings was invalid and bad in law. Consequently, the other grounds of appeal were not adjudicated on merits. The appeal of the assessee was allowed.

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Issues Involved:
1. Validity of proceedings initiated under sections 147/148 of the Income Tax Act, 1961.
2. Addition of Rs. 13,11,73,783/- under section 69C based on DRI information.
3. Addition of Rs. 1,00,69,710/- as presumptive profit from estimated sales.
4. Charging of interest under sections 234A/234B/234C/234D of the Act.
5. Admission of additional ground of appeal regarding the validity of notice under section 148 during the pendency of section 142(1) proceedings.

Detailed Analysis:

1. Validity of Proceedings Initiated Under Sections 147/148:
The assessee contested the validity of the proceedings initiated under sections 147/148, arguing that the assessment proceedings initiated under section 142(1) were already pending. The Tribunal noted that the notice under section 142(1) was issued on 01-12-2011, directing the assessee to file the return of income by 09-12-2011. The assessee did not file the return, and subsequently, the Assessing Officer (AO) issued a notice under section 148 on 16-01-2013. The Tribunal observed that the AO should have completed the assessment under section 144 by 31-03-2014. Issuing a notice under section 148 during the pendency of section 142(1) proceedings was deemed invalid and bad in law. The Tribunal relied on the decision in Medapati Venkayamma vs. ITO, where it was held that reassessment proceedings could not be initiated during the pendency of assessment proceedings.

2. Addition of Rs. 13,11,73,783/- Under Section 69C:
The AO added Rs. 13,11,73,783/- as unexplained expenditure under section 69C based on information from the Directorate of Revenue Intelligence (DRI) regarding undervaluation of imports. The assessee argued that no incriminating material was found at their premises, and the entire case was based on findings related to another individual, Mr. Jayesh Mamrawala. The assessee also contended that even if undervaluation was assumed, the source of differential payments was explained by corresponding differential sales realizations. The Tribunal, however, did not need to adjudicate this issue on merits due to the quashing of the assessment proceedings.

3. Addition of Rs. 1,00,69,710/- as Presumptive Profit:
The AO estimated the net profit based on the gross profit rate of the previous year (7.37%) and added Rs. 1,00,69,710/- as presumptive profit. The assessee contended that they had suffered losses and provided sample workings to demonstrate this. The Tribunal did not adjudicate this issue on merits due to the quashing of the assessment proceedings.

4. Charging of Interest Under Sections 234A/234B/234C/234D:
The assessee contested the charging of interest under sections 234A/234B/234C/234D. The Tribunal did not address this issue separately as the assessment proceedings were quashed.

5. Admission of Additional Ground of Appeal:
The assessee applied for admitting an additional ground of appeal, challenging the validity of the notice under section 148 issued during the pendency of section 142(1) proceedings. The Tribunal admitted the additional ground, noting that the AO had acknowledged the issuance of notice under section 142(1) and that there were no new facts requiring an affidavit. The Tribunal emphasized that issues affecting the taxability of an assessee could be raised for the first time before the second appellate authority, as per the Supreme Court's decision in NTPC vs. CIT.

Conclusion:
The Tribunal quashed the assessment made under section 143(3) r.w.s. 147, holding that the notice under section 148 issued during the pendency of section 142(1) proceedings was invalid and bad in law. Consequently, the other grounds of appeal were not adjudicated on merits. The appeal of the assessee was allowed.

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