AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 83
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....before A.O. by the Appellant. 4. That the order of the Ld. A.O. is void ab initio in as much as, no mandatory notice u/s 143(2) of the Income Tax Act, 1961 was issued at any stage of the assessment proceedings. 5. That the authorities below have erred in law and on facts in taking the entire surplus in the income & expenditure account as income. They have failed to appreciate that the receipts and expenditure of Appellant have components which are capital in nature, exempt in many cases, do not relate to the financial year etc. To sum up, the computation of income as per the provisions of Income Tax Act, 1961 have not been undertaken and the entire surplus has been taken as income. 6. That the authorities below have erred to appreciate the fact that Appellant does not and cannot undertake any business activity and, therefore, the surplus, if any, is not taxable under any head of income. 7. That the authorities below have failed to appreciate the fact that surplus as per the income and expenditure account has further been allocated/provided for the activities of Appellant and, therefore, the amounts being in the nature of provision, there is no surplus available to taxation ....
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.... Tax Act, 1961 as no books of accounts were ever required to be produced during the assessment proceedings; (viii) That the Ld. AO has erred as a matter of fact and in law in initiating the penalty under section 271B for non submission of Audit Report under section 44AB despite the fact that Appellant is not mandated to carry out any business activity by Section 3 of Uttar Pradesh Industrial Development Act, 1976; (ix) That the Ld. AO has erred as a matter of fact in initiating the penalty under section 271(1)(c) of the Income Tax Act regarding concealment of particular of income of formulating inaccurate particular of income. (x) That "The Appellant craves leave to add, amend, alter, vary and/or withdraw or rescind all or any of the GROUND OF APPEAL on or before the final Hearing." Prayer: 1. As per the Facts and Circumstances of the case mentioned in statement of Facts and Grounds of Appeal submitted by the Appellant - Proceedings under Section 147 of The Income Tax Act,1961 be quashed. 2. The additions amounting to Rs. 1,15,86,36,500/- may please be deleted. 3. The additions amounting to Rs. 4,51,57,86,991/- be may please be deleted." 3. At the first instance the....
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....e provision of section 36(1)(xii) of the Act. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the additions made by the AO and also stated that the AO acted against the principal of natural justice in completing the assessment. The written submissions furnished by the assessee has been incorporated by the ld. CIT(A) in para 4 at pages no. 8 to 20 of the impugned order, for the cost of repetition, the same are not reproduced herein. 7. The ld. CIT(A) after considering the submissions of the assessee observed that the assessee had not spelt out any constrains faced by its during the assessment proceedings and that the procedural issue was not raised during the assessment proceedings before the AO. He further observed that the AO initiated the assessment proceedings for the assessment year 2005-06 subsequent to the amendment in section 10(20) of the Act and the assessee filed a writ petition before the Hon'ble Allahabad High Court challenging the action of the AO wherein vide order dated 28.02.2011, it has been held that after amendment u/s 10(20) of the Act w.e.f. 01.04.2003, the assessee is not a Local Authority within the meaning of section 10(....
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....u/s 143(2) of the Act was issued. It was further stated that the department claimed that notice u/s 143(2) of the Act was issued on 16.01.2014 and entry was made in the dispatch register at serial no. 1326 but in the said entry it has been mentioned that 'assessment proceedings for the assessment year 2009- 10 in the case of New Okhla Industrial Development Authority-regarding' but nowhere issuance of notice u/s 143(2) has been mentioned. It was contended that at serial no. 1326 different letter was issued and not the notice u/s 143(2) of the Act. It was emphasized that the assessee is also maintaining very strict record of correspondence but there was no correspondence relating to notice u/s 143(2) of the Act. 9. The ld. Counsel for the assessee argued that the notice dated 16.01.2014 claimed to be a notice u/s 143(2) of the Act by the department was with regard to the subject 'assessment proceedings for the assessment year 2009-10 in the case of New Okhla Industrial Development Authority addressed to the C.E.O which was entered at serial no. 554 on 21.04.2014 and the stamp of C.E.O office was placed on the said letter (a reference was made to page no. 139 of the assessee's paper....
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....P.) Ltd. (2014) 224 Taxman 203 (Guj. HC) Ø ITO Vs Aligarh Auto Centre (2013) 58 SOT 90 (Agra ITAT) Ø Greater Noida Industrial Development Authority Vs ACIT in ITA Nos.5821 to 5826/Del/2014 order dated 09.01.2015 10. In his rival submissions the ld. CIT DR defended the impugned order and submitted that in this case notice u/s 148 of the Act was issued on 06.03.2013 requiring the assessee to file the return of income in 30 days but the assessee filed the return of income on 13.12.2013. It was further submitted that the Income Tax Act does not prescribe that order sheet entry should have all the entries nor does the Act mention about the order sheet or that in the assessment order the issuance of notice u/s 143(2) be mentioned. It was further submitted that assuming but not admitting that the notice u/s 143(2) of the Act was not issued, even then a notice is issued just to put the assessee on notice but there is no statutory form for the notice u/s 143(2) of the Act and if there is a detail show cause notice, that would suffice the purpose of issuance of notice u/s 143(2) of the Act. The reliance was placed on the following case laws: Ø CIT Vs Madhay Bharat En....
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....the material available on the record. In the present case, it is an admitted fact that the proceedings u/s 147 r.w.s. 148 of the Act were initiated by the AO after recording the reasons, the notice u/s 148 of the Act dated 06.03.2013 was issued and duly served in the office of the assessee on 12.03.2013 requiring the assessee to file the return within 30 days from the service of this notice, however, no return was furnished by specified date but later on the return of income declaring Nil income was filed on 13.12.2013. Along with said return, the assessee furnished copies of balance sheet and income & expenditure accounts accompanied with "schedules" and "notes on account". On the basis of those documents furnished along with the return of income, the AO framed the assessment u/s 147 r.w.s. 143 of the Act. However, it is relevant to point out that in column no. 12 of the assessment order dated 29.01.2014, the AO stated section 147 of the Act under which the assessment was framed. He did not mention that the assessment was framed either u/s 143(3) or 144 r.w.s. 147 of the Act. It is also noticed that in the body of the order at page no. 2 the AO mentioned that the assessee was requ....
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....f Hon'ble Allahabad High Court dated 28.02.2011. Accordingly your case is scheduled for hearing on 23.01.2014 at 11:00 AM. Please note that in case of non attendance or failure to provide requisite details, I shall be constraint to pass order on merits and as per available information on record. ....
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....nbsp; (Abhishek Gautam, IRS)  ....
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....er or document was issued by the department to the assessee. In the present case, it was also claimed by the department that an entry was made at serial no. 1326 of the dispatch register. To verify the above said claim we asked the department to produce dispatch register which was produced during the course of hearing and it is noticed that at serial no. 1326 the contends mentioned were as under: Sl. No. Date Name & Address Place Subject FileHead/ No. Stamps Received Stamps Affixed Stamps Balance Remarks 1326 The Chief Executive Officer, New Okhla Industrial Development Authority, Main Administrative Building, Sector-6, Noida Sub:- Assessment Proceedings for the AY 2009-10 in the case of New Okhla Industrial Development Authority- Regarding 14. From the above notings, it is clear that nothing was mentioned about the issuance of notice u/s 143(2) of the Act at serial no 1326. It is also clear that the department was unable to produce any evidence to substantiate that notice u/s 143(2) of the act was issued to the assessee. 15. Now question arises as to whether the assessment framed without issuing the notice u/s 143(2) of the Act is a vali....
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.... a notice under section 143(2) of the Act. While computing escaped assessment, the return filed in response to a notice under section 148 shall be deemed to be furnished under section 139 of the Act. Meaning thereby, that the procedure of section 139 of the Act shall be followed while dealing with the case of escaped assessment under section 148 of the Act. The plain reading of section 148 of the Act further reveals that within the statutory period specified therein, it shall be incumbent to send a notice under section 143(2). The provisions contained in section 148 of the Act with regard to escaped assessment, must be construed strictly with regard to the procedure prescribed for escaped assessment." 17. In another case of similar nature the Hon'ble Jurisdictional High Court in the case of CIT VS Mukesh Kumar Agrawal (2012) 345 ITR 29 by taking into consideration the judgment of the Hon'ble Supreme Court in the case of Hotel Blue Moon (supra) and the provisions of section 292BB of the Act has held as under (Head Note): "The Supreme Court held in Hotel Blue Moon's case (2010) 321 ITR 362 (SC) that if the Assessing Officer, for any reason, repudiates the return filed by an assess....
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....Act but nowhere issued the notice u/s 143(2) of the Act. Therefore, the assumption of jurisdiction for framing the assessment was invalid. 19. Now question arises as to whether the provisions of section 292BB of the act come to the rescue of the department, even when the notice u/s 143(2) of the Act is not issued within the stipulated time. On this issue the Hon'ble Jurisdictional High Court in the case of CIT-II, Lucknow Vs Salarpur Cold Storage (P.) Ld. (2014) 50 Taxmann.com 105 (supra) has held as under: "Where the Assessing Officer fails to issue a notice within the period of six months as spelt out in the proviso to clause (ii) of section 143(2), the assumption of jurisdiction under section 143(3) would be invalid. This defect in regard to the assumption of jurisdiction cannot be cured by taking recourse to the deeming fiction under section 292BB. The fiction in section 292BB overcomes a procedural defect in regard to the non service of a notice on the assessee, and obviates a challenge that the notice was either not served or that it was not served in time or that it was served in an improper manner, where the assessee has appeared in a proceeding or cooperated in an enquir....