TaxTMI 
TaxTMI 
2009 (11) TMI 689
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....roking business were found. Certain unredeemed pawned articles were also found. During the course of survey and post-survey operations, it was noticed that the assessee and other members of the group were not able to explain the accounted sources of pawned advances of Rs. 42,53,470/- and cash found of Rs. 2,03,100/-. The assessee submitted a letter on 16th February, 2006 in which it was stated that due tax will be paid and the returns of income will be filed on or before 15th March, 2006. However find returns of income have been filed for the asst. years 2001-02 to 2005-06 till 12th December, 2006. The Assessing Officer issued notice Under Section 142(1) for the asst. year 2005-06. The acknowledgement of receipt of the notice is clear from the letter dated 25th January, 2006, but no return was filed. Another notice was issued on 18th October, 2006 requiring the assessee to file the return of income for the asst. year 2005-06. The assessee was also required to file certain details and documents as per annexure to the notice. Such notices were served on 18th October, 2006. The assessee did not file the return of income. No details and documents called for were filed. The assessee did....
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....ly, the assessee filed certain information on various dates but failed to explain all the queries raised by the department. The AO at page 5 of the order has mentioned that he has due consideration of the submission explanation given by the assessee and is completing the assessment on that basis. Accordingly, the assessment was made on 26th December, 2007. In column 12 of the assessment order, the Assessing Officer has mentioned that the assessment is completed Under Section 143(3) r.w.s. 147 of the IT Act. 4. It is an undisputable fact that the Assessing Officer has issued a notice Under Section 142(1). The AO in his order has mentioned that the assessee has acknowledged the receipt of notice Under Section 142(1) on 25th January, 2006. Thus, notice has been issued for the asst. year 2005-06 during the relevant asst. year. As per proviso to Section 142(1)(i) introduced by the Finance Act, 2006 with retrospective effect from 1/4/1990, notice Under Section 142(1) issued on 25th January, 2006 is a valid notice, vide which, the AO could have required the assessee to file the return of income. The AO has mentioned that another notice was issued on 18th October, 2006 vide which the as....
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.... If an assessment is pending either by way of original assessment or by way of reassessment proceedings, the Assessing Officer cannot issue a notice Under Section 148 but if no proceedings are pending either by way of original assessment or by way of reassessment, he can issue a notice Under Section 148 within the time mentioned in the section. In that case, the subsequent notice issued Under Section 148 during the pendency of earlier assessment proceedings was held as invalid. 6. The Hon'ble Calcutta High Court in the case of CIT v. Soorajmull Nagarmall 141 ITR 140 observed at page 149 as under: But in a case where the time to file the return had expired and notice had been issued to the assessee to file the return and proceedings for assessment pursuant to that notice were pending, unless the proceedings had been terminated either by an assessment or the completion of the proceedings, it could not be said, merely on the failure of the assessee to file the return, that income had escaped assessment by reason of the failure or omission to file the return within time. The above observations were expressed in the Unreported decision of the Hon'ble Calcu....
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....tter and 142(1) notice dated 03.08.2007. 3. Your letter dated 12.08.2007 filed in this of f ice on 13.07.2007. From the letter so issued, it is clear that the Assessing Officer intended to complete the assessment with reference to notice issued Under Section 148 of the IT Act. Hence, we are not agreeable to the contention of learned AR that the order should be read as passed Under Section 144 of the IT Act. Once it is held that the AO was not competent to initiate the parallel proceedings Under Section 148 then the assessment order passed in pursuance to such notice is invalid in the eye of law. 10. Another issue, which arises in this case, Is that the AO has not issued a notice Under Section 143(2) after the assessee has filed the return on 19th November, 2007. The return has been filed beyond the time limit prescribed Under Section 139(4) of the IT/Act. The return has not been filed within the period allowed Under Section 148 of the IT Act. The learned DR submitted that the return filed was not valid return and therefore no cognizance was required to be made on such return. There was no need of issuing notice Under Section 143(2). 11. In Section 148, it is menti....
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.... assessee can file a return beyond the time prescribed in the notice issued Under Section 148 of the IT Act. 14. The Hon'ble Calcutta High Court in the case of CIT v. Banshidhar Jalan and Sons 207 ITR 488 has held that legal fiction Under Section 148 is not for empowering the officer to call for a return but to follow up the issue of the notice in the same manner a notice Under Section 139(2) is pursued. Thus, the legal fiction that in respect of notice Under Section 148 provisions of Section 139 so far as may be applicable is to enable the AO for making the assessment and requiring him to follow the procedure for making assessment. Moreover, the revenue cannot invoke Section 139(4) to say that the return is invalid because Section 139(4) speaks of notice Under Section 142(1) but does not refer to notice Under Section 148. 15. The Hon'ble jurisdictional High Court in the case of A Balakrishnan v. General Manager, Hindustan Machine Tools Ltd. and Another 290 ITR 227 had an occasion to consider as to whether the AO is required to process a return, which is filed beyond the time stipulated Under Section 139(1) or 139(4) of the Act. The Hon'ble High Court directed the....
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....efore the expiry of the time limit for making the assessment, reassessment or re-computation as specified in Sub-section (2) of Section 153, such notice shall be deemed to be a valid notice. These amendments will take effect retrospectively from 1st October, 1991. It is also proposed to insert an Explanation in Sub-section (1) so as to clarify that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after 1st October, 2005 in response to a notice served under the said section. This amendment will take effect retrospectively from 1st October, 2005. 17. From the insertion of above proviso, it is clear that if an assessee has filed a return in response to notice Under Section 148 then notice Under Section 143(2) is required to be given if an assessment is to be made. Alternatively, the Assessing Officer can issue notice Under Section 142(1) and can proceed to make assessment Under Section 144 of the IT Act. The explanation makes evidently clear that notice Under Section 143(2) is required to be issued within the stipulated period. In case no such notice is issued then the assessment cannot ....