TaxTMI 
TaxTMI 
2016 (2) TMI 466
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....sailed the orders of the Assessing Officer and the CIT(A) before the Pune Bench of the Tribunal in ITA No.127/PN/2011; order dated 27.02.2013. Before the Tribunal, the assessee questioned the legality and validity of the assessment order itself. The assessee also filed additional ground questioning the legality of the re-assessment on the ground that the assessment order dated 03.12.2009 passed under section 143(3) r.w.s. 147 of the Act is without jurisdiction in the absence of service of statutory notice under section 143(2) of the Act. The Co-ordinate Bench of the Tribunal setaside the additional ground raised before it concerning impugned legal issue and restored it back to the file of the CIT(A) to decide the same after examination of records. Pursuant thereto, the CIT(A) vide order dated 11.03.2014 decided the legal issue against the assessee and held that the impugned assessment made by the Assessing Officer under section 143(3) r.w.s. 147 of the Act is valid and cannot be set-aside merely on the ground that notice under section 143(2) was not served having regard to the facts of the case. This limited issue decided by the CIT(A), therefore, stands merged with the previous or....
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....us decisions in the case of ACIT vs. Hotel Blue Moon, (2010) 321 ITR 362 (SC) and CIT vs. Rajeev Sharma, (2011) 336 ITR 678 (All.) and also CWT vs. HUF of H.H. Late Shri J.M. Scindia, (2008) 300 ITR 193 (Bom) to support his contention that in the absence of notice under section 143(2), the impugned re-assessment order in appeal stands vitiated. 6. The Ld. Departmental Representative for the Revenue, on the other hand, relied upon the order of the CIT(A) and submitted that non-issuance of notice under section 143(2) by itself will not invalidate the re-assessment order. He submitted that the assessee has fully cooperated in the re-assessment proceedings and full opportunity has been provided to the assessee. Therefore, mere non-issuance of notice under section 143(2) is mere technical and therefore stands cured by section 292BB of the Act. 7. Since the assessee has questioned the legality of the assessment order itself which affects the jurisdiction and goes to the root of the matter, we consider it necessary to adjudicate the Grounds No.1 and 2 concerning this basic issue first. To begin with, the short question before us is whether nonissuance of notice under section 143(2) will....
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....uiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :]" [ [underlined for emphasis by us] 7.3 On a combined reading of these aforesaid two provisions, we observe that when the Assessing Officer serves notice under S. 148 of the Act, the Assessee is required to file return in response thereto. The provisions of S. 148 seeks to treat the return filed in response to notice served under S. 148 as return filed under S. 139 of the Act. This is followed by notice under machinery provisions of S. 143(2) and S. 142(1) to enable the Assessing Officer to complete the assessment. We find that neither any return was filed under 148 of the Act nor any formal request was made to treat the earlier return filed after....
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....a valid under section 139 was in existence and on these facts the Hon'ble Courts have held that issuance of notice u/s 143(2) is mandatory and cannot be disregarded and bypassed. 7.7 In the present case, as noted earlier, law itself does not oblige the Assessing Officer to issue notice u/s 143(2) in the absence of return u/s 139 or u/s 142(1). Concurrently, we notice that the impugned assessment was framed after proper opportunity were afforded to the Assessee by issuing notice under section 142(1) in sync with principles of natural justice. Therefore, we do not find any force in the contention of the Ld. Authorized Representative for the assessee that non issuance of notice under section 143(2) is fatal and has vitiated the re-assessment order and rendered it bad in law. To reiterate, we take note of the fact that the assessee has appeared before the Assessing Officer and was in acquiescence and privy to the re-assessment proceedings. Thus, interest of the Assessee is not jeopardized in any manner. Omission to serve or any defect in the service of the notice not statutorily required in the facts of the case will not, in our view, impinge upon the legality of impugned re-assessmen....
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....th the opposite situation i.e. receipt of unexplained credit and not payment thereof. The CIT(A) agreed with the contention of the assessee about the nonapplicability of section 68. Thereafter, the issue was examined by the CIT(A) in its first order dated 02.12.2010 in the light of provisions of section 11(2) r.w.s. 11(3)(a) of the Act. The relevant operative para of the order of the CIT(A) is reproduced hereunder :- "6.3 I have carefully considered the facts of the case. The AO has given the following finding for the impugned addition:- "It is also noticed that; the trust has failed to incurred expenditure more than 85% on the object of the trust and the trust has failed to submit Form No.10 before the due date of filing of return, hence an amount of Rs. 9,48,585/- i.e. (85% of total receipt of Rs. 45,43,948/- comes to Rs. 38,62,356/- (-) amount actually spent on object Rs. 29,13,771/-) is added to the total income of the trust". As may be seen the AO has made the impugned addition on the ground that the appellant has failed to file Form No.10B before the due date of filing the return. Due date was 31/07/2004 whereas the return was filed on 09/03/2007. Another reason given....
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....g Authority completing the concerned assessment, therefore, the compliance of the requirement of the Act will have to be any time before the assessment proceedings. As may be seen from the facts in the present case the Form No.10B was filed by the appellant alongwith the return of income on 09/03/2007 that was before the completion of the impugned assessment order. Therefore, it was available to the AO and he should have considered the information provided by the appellant regarding the accumulation of the income carrying out its authorized activities. In view of the above facts and circumstances of the above cases, it is held that the AO was not justified in not considered properly the said Form No.10B before finalizing the impugned assessment order. The AO's action therefore in not considering the particulars of income and expenditure given in the said form is not justified in view of the direct judgement on the issue by the Hon'ble Supreme Court in the case CIT vs. Nagpur Hotels Owners Association (supra). The appellant is found to have spent this year more than 85% as required under the law. Consequently, the impugned addition of Rs. 9,48,585/- is unjustified and the same i....