TaxTMI 
TaxTMI 
2017 (11) TMI 1552
X X X X Extracts X X X X
X X X X Extracts X X X X
.... during the course of re- assessment proceedings and did not challenge delay in the issue of notice u/s. 143(2). As per the provisions of Section 292BB of Income Tax Act notice u/s. 143(2) is deemed to be valid where assessee has appeared in the proceedings and cooperated in the inquiry related to re assessment provided the objections to the delay in notice are raised before the completion of re-assessment. For purpose of clarity the provisions of Section 292BB of Income Tax Act are reproduced below:- When an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was:- a) Not served upon him or b) Not served upon him in time or c) Served upon him in as improper manner Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mandatory in a reopened procedure and whether notices issued prior to the reopening would satisfy the requirement specified u/s 143(2) of the Act. That issue of a notice u/s 143(2) of the Act, is mandatory even in a re-assessment proceeding initiated u/s 148 of the Act has been clearly laid down by the Hon'ble Delhi High Court in the case of M/s Alpine Electronics Asia PTE Ltd., (supra). Hon'ble Delhi High Court had reached this conclusion after considering the decision of the Hon'ble Apex Court in the case of Hotel Blue Moon (supra). At para-24 of the judgment their Lordship has held that Section 143(2) was applicable to a proceedings u/s 147/148 also, since proviso to section 148 of the Act, granted certain specific liberties to the revenue, with regard to extension of time for serving such notices. No doubt, Hon'ble Madras High Court in the case of Areva T and D India Ltd.,(supra) had held that issue of notice u/s 143(2) was procedural in nature. However, Co-ordinate Bench in the case of M/s Amit Software Technologies Pvt. Ltd.,(supra) after considering the decision of the Hon'ble Madras High Court as well as Delhi High Court had held that Section 143(2)of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....end his officer or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return. (Provided that no notice under clause (ii) shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished). Once the original return filed by the assessee was subject to processing u/s 143(1) of the Act, the procedure of assessment pursuant to such a return, in our opinion came to an end, since AO did not issue any notice within the 6 months period mentioned in proviso to section 143(2)(ii). No doubt, if the income has been understated or the income has escaped assessment, an AO is having the power to issue notice u/s 148 of the IT Act. Notice u/s 148 of the Act, issued to the assessee required it to file a return within 30 days from the date of service of such notice. There is no provision in the Act, which would allow an AO to treat the return which was already subject to a processing u/s 143(1) of the IT Act, as a return filed pursuant to a notice subsequently issued u/s 148 of the Act. However, once an assessee itself declare before the AO that his earlier return could be treated as f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpliance of the procedure laid down u/s. 142 and 143(2) is mandatory. As per record, we find that there was no notice issued u/s. 143(2) of the Act which is very much essential for reassessment and it is a failure on the part of the AO for not complying with the procedure laid down in section 143(2) of the Act. If the notice is not issued to the assessee before completion of the assessment, then the reassessment is not sustainable in the eyes of law and deserves to be cancelled. In view of above facts and circumstances of the present case, the issue in dispute raised in additional ground relating to non issue of the mandatory notice u/s. 143(2) of the Act is decided in favour of the assessee and we hold that the impugned assessment order dated 31.12.2009 passed u/s. 147/143(3) of the Act by the AO as invalid. Our view is supported by the various judgments of the Hon'ble Supreme Court, and Hon'ble Jurisdictional High Court. The relevant portion of the head- notes of various judgments of the Hon'ble Courts are reproduced as under:- "ACIT & Anr. vs. Hotel Blue Moon: [(2010) 321 ITR 362 (SC)] HELD: "It is mandatory for the AO to issue notice u/s 143 (2). The issuance and service ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....costs. DCIT Vs. M/s Silver Line, ITA No.1809,1504,1505 & 1506/Del/2013 vii. The Hon'ble ITAT of Agra Bench, in the case of ITO v. Aligarh Auto Centre reported in 152 TTJ (Agra) 767, on an identical issue that of the present issue, has recorded its findings as under: "5. We have considered the rival submissions and the material on record. It is not in dispute that the assessee filed original return of income and at the reassessment proceedings, the assessee contended before the AO that the original return filed earlier may be treated to have been filed in response to the notice u/s. 147, which is also supported by order sheet entry dated 09.08.2006 (PB-20). It is also not in dispute that AO never issued any notice u/s. 143(2) of the IT Act. The Revenue merely contended that the CIT (A) should have appreciated the provisions of section 292BB of the IT Act. Section 292 BB of the IT Act provides as under: "292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....facts and circumstances of the issue as deliberated upon in the fore-going paragraphs and also in views of the judicial pronouncements (supra), we are of the view that the re-assessment's made for the assessment years under consideration have become invalid for not having served the mandatory notice u/s 43(2) of the Act on the assessee. It is ordered accordingly. 7.10We have since decided that the re-assessment proceedings concluded u/s 147 r/w 143(3) of the Act were invalid for the AYs under dispute, the issues raised by the revenue in its appeals and also the Cross objections of the assessee firm based on the invalid assessment orders have not been addressed to." 16. In the backdrop of the aforesaid discussions and precedents relied upon, we find that the AO has not issued the notice u/s 143(2) of the Act in this case before completing the scrutiny assessment, therefore the impugned assessment order before us is invalid, void abnitio and so the impugned order is not sustainable in the eyes of law and hence, we cancel the same by allowing the additional ground raised in the cross objection filed by the Assessee on this issue. 17. In the result, the Cross Objection fil....