TaxTMI 
TaxTMI 
2015 (1) TMI 569
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....AO issued notice u/s. 148 of the Act dated 01.11.2007 and in response to this notice u/s. 148 of the Act, assessee replied vide letter dated 14.05.2008 that the return filed by assessee on 21.02.2007 be treated as return filed in response to notice u/s. 148 of the Act without any alteration. The AO issued notice u/s. 143(2) and 142(1) of the Act on 22.05.2008. The assessee now challenged the issuance of notice u/s. 148 of the Act by revenue for initiation of reassessment proceedings u/s. 147 of the Act for escapement of income for the reason that, when a valid return filed u/s. 139(4) of the Act is pending assessment. The assessee has raised this issue before CIT(A) and also raised the issue that notice issued u/s. 143(2) of the Act is barred by limitation as same was issued on 22.05.2008. The CIT(A) confirmed the action of the AO by observing in para 4, 5 and 6 as under: "4. The two has to be combined together and decided whether the Assessment proceedings is valid. To support the point that notice under section 148 cannot be issued when time is available for issue of notice under section 143(2), the appellant cites decisions of Hon ITAT in 105/Kol/2010, 08 & 25/Asr/2011, (2010....
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....ITR 386 (Cal), wherein it has been held as under: "There can be no doubt that when there is no question as to the validity of a return filed by an assessee, the ITO has to complete the assessment in accordance with s. 143 of the Act and before such completion he would not have any jurisdiction to ignore the return and to issue a notice under s. 148. But the question is whether the ITO has such jurisdiction when the return is not strictly in accordance with the provisions of the Act. Under s. 147(a) of the Act one of the grounds which enables the ITO to assess or reassess the income of an assessee by issuing a notice under s. 148 is that the ITO has reason to believe that, by reason of the omission or failure on the part of the assessee to make a return under s. 139 of the Act for any assessment year, income chargeable to tax has escaped assessment for that year. Section 139 provides, inter alia, that the assessee shall furnish a return of his income during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed Section 143 of the Act, as it stood before its amendment in 1970, runs as follows: "1....
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....jection of an invalid return; on the contrary, under s. 143(3), a duty is cast on the ITO to assess the total income or loss of the assessee after serving on him a notice under s. 143(3) and after hearing such evidence as the assessee may produce or the ITO may gather. We should not, however, be understood to lay down this proposition that whenever a return is filed, the ITO must proceed in accordance with s. 143, no matter whether or not the return conforms to the provisions of s. 139. For instance, there may be cases where the returns are incomplete to such an extent that they I cannot be regarded as returns in the eye of law, namely, where the return is not signed by the assessee or where a blank return signed by him is filed. In either case, though the return is filed, it will not be treated as a return under the law, and the ITO may proceed to issue a notice under s. 148 on the footing that the assessee has not filed any return. In the instant case, however, the appellant filed returns, but they did not include certain particulars regarding the profits and gains of his business. After having looked into the returns, we find that the same were signed and verified by the asse....
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....not authorise the ITO to initiate proceedings under s. 34. Further, it was observed that it could not be regarded as a case where no return had been filed by the assessee or that his income had escaped assessment. Mr. Pal, however, strongly relied on a decision of the Lahore High Court in Lal Mohammad Sardar Mohammad v. CIT [1934] 2 ITR 358 (Lah). In that case, it was held that the return was invalid and the ITO was justified in making an assessment under s. 23(4) of the said Act, namely, a best judgment assessment. We are unable to agree with the view expressed by the Lahore High Court in Lal Mohammad Sardar Mohammad's case. It does not appear that the Lahore High Court considered the provisions of sub-ss. (1), (2) and (3) of s. 23 of the Indian I.T. Act, 1922, which were somewhat similar to s. 143 of the I.T. Act, 1961. Moreover, the facts of that case are different from those of the present case before us. The respondents also relied on a decision of the Allahabad High Court in Behari Lal Chatterji v. CIT [1934] 2 ITR 377. (All). In our opinion, the law that has been laid down by the Allahabad High Court does not at all militate against the view taken by us, but it suppor....