TaxTMI 
TaxTMI 
2015 (3) TMI 16
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....cts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in upholding the assessment, even though return of income for A.Y. 1998-1999 was treated as invalid and no notice was issued under Section 143(2) of the I.T. Act during the course of assessment proceedings? (B) Whether on the facts and in the circumstances of the case, the Income tax Appellate Tribunal was right in law in upholding the assessment order passed by the Assessing Officer for A.Y. 1998-99 as in sum and substances u/s.144 of the IT Act, 1961?" 4. We may record that question (A) has been added as per the order passed by this Court today in OJMCA No.1 of 2015. Under the circumstances, both the aforesaid questions may be required to be con....
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....tance u/s.144 of the IT Act, 1961?" 2.1 The assessee Company declared its total income/loss for the assessment year in question by filing its return of income. The Assessing Officer held that huge transactions of sales and purchase were carried out by the assessee outside its books of accounts and as such there was escapement of income. A notice u/s 148 of the Act was accordingly issued. The assessment proceedings were completed by the AO by estimating sales and G.P at 18.62% as declared for the assessment year 1996-97. On appeal before the CIT(A), the CIT(A) dismissed the appeal. 2.2 Being aggrieved by the order of the first appellate authority, the assessee preferred appeal before the ITAT and the ITAT confirmed the validity of the asse....
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....143(1) of the Act by issuance of intimation; and (iii) scrutiny assessment under section 143(3) of the Act. This Scheme was originally introduced by Direct Tax Laws (Amendment) Act,1 989 with effect from 1.4.1989. The issuance of notice under section 143(2) of the Act is in the course of assessment in the third mode, namely, scrutiny assessment. 6. Section 143(2) of the Act requires that where return has been made by an assessee, if the Assessing Officer considers it necessary or expedient to ensure that the assessee has not understated the income, or has not computed excessive loss, or has not underpaid tax in any manner, he shall serve on the assessee a notice requiring him either to attend his office, or to produce, or cause to be produ....
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....[2010] 321 ITR 362 has considered the very issue. The Apex Court held that the Assessing Officer has to necessarily follow the provisions of section 142 and sub-sections (2) and (3) of section 143. It did not accept the submission of the Revenue that the requirement of the notice under section 143 can be dispensed with and the same is mere procedural irregularity. In the words of the Apex Court, it is held as under: 16. The case of the revenue is that the expression so far as may be apply indicates that it is not expected to follow the provisions of section 142, sub-sections(2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the revenue, since we do not s....
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....n favour of assessee. Therefore, question no. A is answered in favour of assessee and against the revenue. In view of answer of question no. A in favour of assessee, question no. B raised in this appeal shall not survive and therefore is not required to be answered. 5. In view of the above, the impugned judgment and order passed by the ITAT is modified accordingly. Hence, the present Tax Appeal is allowed to the aforesaid extent." 7. Similar is the fact situation. The facts of the present case show that the A.O. in respect of A.Y.1998-1999 of the Assessee-appellant, assessed income under Section 143(3) read with Section 147 of the Act at Rs. 14,96,750/-. In appeal, the C.I.T. (Appeals) maintained the assessment but on the point of interes....