TaxTMI 
TaxTMI 
2018 (5) TMI 42
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....perty as deemed dividend under section 2(22). 2. That in the facts and circumstances of the case the appellant has been prejudiced as the Ld CIT (A) had erred by ignoring the additional evidence produced by the appellant. 3. That in the facts and circumstances of the case the addition of Rs,18,50,000/- is bad in law as the Ld CIT(A) has failed to take note of the fact that the Ld AO did not adhere to the provision of section 2(22) while calculating the amount of accumulated profit. 4. That in the facts and circumstances of the case the Ld CIT(A) failed to appreciate that the Ld AO had not served any notice under section 143(2) which is mandatory for completing an assessment under section 143(3)/147. 5. That the appellant craves ....
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....le Delhi High Court in the case of CIT Vs Pawan Gupta and Ors. 318 ITR 322 (Del) wherein it was held-" If the assessment is framed u/s 143(3) either read with section 147 of the Act. Then it is mandatory to issue notice u/s 143(2). The issuance and service of notice u/s 143(2) is mandatory and not procedural." 5. It was further submitted that in response to the notice u/s 148 of the Act, the assessee filed a letter dated 27.10.2011 along with the copy of acknowledgment and stating the fact that the return filed be treated against the notice u/s 148 of the Act. 6. The ld. CIT(A), however, did not find merit in the submissions of the assessee by observing as under: "I have perused the facts stated in the assessment order as well as the f....
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....und." 7. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the AO issued the notice u/s 143(2) of the Act on 12.10.2011 i.e. prior to the furnishing of return of income in response to the notice u/s 148 of the Act on 27.10.2011. It was contended that since the notice u/s 143(2) of the Act was issued by the AO prior to the furnishing of the return of income. Therefore, the subsequent assessment framed u/s 143(3) r.w.s. 147 of the Act was void ab initio. The reliance was placed on the following case laws: DIT Vs Society for Worldwide Inter Bank Financial Telecommunications (2010) 323 ITR 249 (Del.) Pr. CIT Vs Jai Shiv Shankar Traders Pvt. Ltd. (2016) 383 ITR 448 (Del.) 8. In his rival submissions, the ld.....
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....he notice was ready even prior to the filing of the return. The provisions of section 143(2) make it clear that the notice could only be served after the Assessing Officer had examined the return filed by the assessee. Thus, even if the statement of the Assessing Officer was taken at face value, it would amount to gross violation of the scheme of section 143(2) of the Act." 11. Similarly, the Hon'ble Jurisdictional High Court in the case of Pr. CIT Vs Shri Jai Shiv Shankar Traders Pvt. Ltd. (2016) 383 ITR 448 (supra) held as under: "Pursuant to a scrutiny of the return filed by the assessee, the Assessing Officer issued notice under section 148 of the Income-tax Act, 1961 and another notice under section 143(2) requiring further informa....
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....under: "The proposal to reopen an assessment under section 147 of the Income-tax Act, 1961, is to be based on reasons to be recorded by the Assessing Officer. Such reasons have to be communicated to the assessee. Merely because the assessee participates in the proceedings pursuant to such notice under section 148 of the Act, it does not obviate the mandatory requirement of the Assessing Officer having to issue to the assessee a notice under section 143(2) of the Act before finalizing the order of reassessment. A reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the Assessing Officer to the assessee under section 143(2). The requirement of issuance of such notice is a jurisdicti....