TaxTMI 
TaxTMI 
2013 (12) TMI 954
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....sed representative of the assessee Sri K.V. Chalamaiah on 15-9-2006. Information received as a result of survey operation conducted u/s 133A in July, 2005 at Ramtekh, Maharashtra disclosed that the assessee society had collected Rs. 27,78,000 as donation which has not been reflected in the books of accounts. The Assessing Officer in the course of assessment proceedings issued a letter to the assessee seeking his objections as to why the exemption u/s 11 should not be denied. In response to the aforesaid letter dated 6-11-2007 of the Assessing Officer, the assessee submitted that the notice u/s 148 stated to have been issued was never received by it and further since no valid return is existing for the impugned assessment year, the denial of exemption u/s 11 of the Act would not arise. The Assessing Officer however rejected the contention of the assessee and proceeded to complete the assessment u/s 143(3) read with section 147 of the Act vide order dated 28-12-2007 by determining the total income at Rs. 1,09,29,130/-. Being aggrieved of the assessment order so passed, the assessee preferred an appeal before the CIT (A). 3. In course of hearing of appeal before the CIT (A), the as....
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....ection 148 and thereafter issue notice under section 143(2), before proceeding to decide the controversy regarding escaped assessment, non issue of notice under section 143(2), after filing of return by the appellant vitiated the reassessment proceedings. In fact, the Apex Court in the case of Hotel Blue Moon reported in (2010) 321 ITR 362 (SC) held that if an assessment is to be completed under section 143(3) read with section 158BC, issue of notice under section 143(2) is mandatory and that the non issue of the notice is not a procedural irregularity and cannot be cured. Thus, the re-computation of income by the A.O. has to be held invalid and thus, the action of the A.O. in this regard is treated as dismissed." Being aggrieved of the aforesaid order passed by the CIT (A), the department is in appeal before us, while the assessee has filed a cross objection challenging that part of the order of the CIT (A) wherein he upheld the validity of service of notice u/s 148 of the Act. We will first take up the appeal of the department. 4. The only issue arising out of the grounds raised by the department is whether the CIT (A) was justified in annulling the assessment completed u/s....
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.... section 147 of the Act. Therefore, it is mandatory that before proceeding for assessment u/s 143(3) of the Act, a notice u/s 143(2) is required to be issued to the assessed. It is further submitted that admittedly the Assessing Officer neither issued a notice u/s 143(2) or u/s 142(1) of the Act before completing the assessment u/s 143(3) read with section 147 of the Act. The learned Authorised Representative referring to the remand report submitted by the Assessing Officer during the proceedings before the CIT (A) submitted that the Assessing Officer himself had admitted in the remand report that to pass an order u/s 143(3) read with section 147 of the Act, it is necessary to issue a notice u/s 143(2) or u/s 142(1) of the Act to the assessee. The learned authorised representative for the assessee submitted that the Assessing Officer could not possibly have made the assessment u/s 143(3) read with section 147 without meeting the mandatory requirement of the statute of issuing notice u/s 143(2) of the Act. It was submitted that the Assessing Officer has not even issued notice u/s 142(1) of the Act. In these circumstances, the CIT (A) was correct in annulling the assessment. In suppo....
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....ory requirement and not a curable procedural irregularity. When the statute requires an act to be done in a particular manner, then it has to be done in that manner only. The Assessing Officer having proceeded to make an assessment u/s 143(3) read with section 147 of the Act, notice u/s 143(2) should have been issued to the assessee before completing the assessment. The Assessing Officer having not issued any notice u/s 143(2) of the Act, the assessment order is bad in law. In fact, the Assessing Officer himself in the remand report has admitted this fact and has stated that at least one notice u/s 143(2) and u/s 142(1) of the Act was required to be issued to the assessee before completing the assessment u/s 143(3) read with section 147 of the Act. 8. So far as the decisions relied upon by the learned Departmental Representative are concerned, on careful examination, we find them to be factually distinguishable and not applicable to the facts of the present case. In case of K.J. Thomas (supra) the assessee's contention was rejected because the assessee had furnished a detailed reply therefore it was held that once the assessee had been given opportunity to file a reply and a....