TaxTMI 
TaxTMI 
2017 (9) TMI 1683
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.... the return of income filed by the assessee reassumes the same status after the annulled assessment u/s 143(3) as if on which no assessment has been carried out? 3. The facts of the case are that the assessee respondent is a contractor who filed the return of income on 31.10.2001 for Rs. 65,172/- after adjusting brought forward loss of Rs. 10,59,233/- out of total loss of Rs. 11,3337,535/-. The income in the return represented income from other sources. The return was processed and a notice u/s 143(2) was issued on 23.10.02. 3.1 Further again notice u/s 143(2) and 142(1) alongwith questionnaries were issued and duly served to the assessee. The assessee sought adjournments and did not furnish the required details. Since the required documents were not submitted despite several opportunities, again a notice u/s 143(2) and 142(1) were served. No details and books of accounts as called for by the AO were produced by the assessee. A survery u/s 133A was carried out at the business premises of the assessee on 18.2.03. 3.2 During the course of survey operations, some books of accounts/documents as cash book, ledger, small diary and loose papers were found and impounded relating t....
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....ithout jurisdiction, therefore, same is liable to be quashed. During the appellate proceedings the AR of the appellant at the outset challenged the jurisdiction of the AO with regard to assesssment under reference. It was claimed that the notice u/s 143(2) for the assessement under reference was served upon the appellant first time on 11.12.03 while the appellant filed its return of income on 31.10.2001. Therefore, it was contended that since the valid notice u/s 143(2) was not issued to the appellant within the time stipulated under the section, the entire proceedings for assessment were null and void. Keeping in view the grounds of the appellant and the evidences filed by him during the appellate proceedings the matter was referred to the ACIT, Cricle-Bharatpur vide this office's letter dt. 20.1.05 No.1056. The AO was asked to give his comments on the ground raised by the AR of the appellant and also provide the factual position with regard to service of notice u/s 143(2) to the appellant. The AO's report was received through the CIT, Alwar vide his office's letter No.493 dt. 10.2.05. The relevant extracts of the report are as under:- (a) The a....
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....or the same. Thus the assessee firm as well as various departments are ignoring this type of clerical mistake and accepting all these certificates as of firm (M/s. Rameshwar Prasad Sharma Contractor) instead of individual Sh. Rameshwar Prasad Sharma in whose name the certificates are issued. When there is a matter to the benefit for the assessee then assessee firm did not raise any objection on technical mistake appearing in TDS certificates relating to assessee firm. Other hand any technical mistake committed by the department in the notice us/ 143(2) then firm wants to raise objections in respect of technical mistake for taking benefit from the same hence, objection raised by the assessee are baseless and away from the truth. (g) As per provision of Section 292B of the Act, no notice issued from the department shall be invalid or shall be deemed to be invalid merely by the reason of any mistake defect or omissions in such notice. Such types of mistakes are curable u/s 292B of the IT Act, 1961. (h) The contents and view of the provisions 292B of the Act clearly explained and supported by the Judgment of Hon'ble Guwahati High Court reported in 227 ITR 512. Hon'ble....
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....o A.Y. 2001-02 and relied upon the decision in the case of M/s. Agarwal Marbles & Industries Ltd. Vs. ACIT (2007) 37 TAX WORLD 25 (ITAT-Jaipur Bench). The ld. AR also submitted that the interest under Sec.234B is to be calculated with reference to the total tax demand minus tax deducted at source. On considering the arguments advanced by the ld. AR and case as above cited I am of the considered opinion that there is substance in the connection of the ld. AR that section 234D has come into effect from 1.6.03 and thus not applicable in the present case of assessment year 2001.02. The same views has been confirmed by the Hon'ble ITAT Jaipur Bench 'A" in the case of ACIT vs. M/s. GAD FASHION (2008) XI, TAX WORLD 156 (ITAT-JP). Therefore, the interest charged under section 234D is thus directed to be deleted. However in respect of interest charge u/s 234B is consequential of the above findings." 4.5 She further contended that when the assessment was annulled, on the basis of judgment in the case of Babulal Lath, 83 ITD 691 rendered by Mumbai Bench of the Tribunal, there was no reason for the department to take further proceedings. 4.6 She also taken us to the ord....
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....recorded reason on 8.7.2005 before issuing notice u/s 148. As per reasons recorded, the AO observed that the following amount of income has escaped assessment:- Trading addition 1,00,50,569/- Bogus site exp. 58,06,879/- Credits for goods & labour 10532166/- Repayment loan to Sh. Kailash 674000/- Difference in cash balance 1239505/- Cash credit in the name of Sh. S.K. Upadhya 425800/- Cash credit in the name of Sh. Bhagwati Lal Pathak 200000/- Anil, Sukiriti & Geeta 79000/- Addition of deposit in the name Gopal Pandit 1582780/- Advance in the name of Sh. Pradeep Sirohi 240,000/- Advance in the name of Sh. Rameshwar 45,000/- Advance in the name of Sh. Harendra Sharma 45,000/- Undisclosed investment in purchase of Motor cycle 36,000/- Disallowance be made u/s 40A(3) 3431324/- Advance payment of Kapoor Chand Singhal, Subhash CA, K.K. Agarwal, Satish Seth & Deependra 496000/- Advance Staish Baroli 412000/- Advance to Mukesh Contractor 526000/- Salary to Heera Shankar 334551/- Deemed rental income 60,000/- Rent received of JCV 87,000/- 3,63,03,574/- ....
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....reating the interest on fixed deposit income as business income. 11. Against this order, the assessee preferred appeal before ld. CIT(A). The proceedings initiated u/s 148 were also challenged. The ld. CIT(A) uphold the reopening of the assessment. However, appeal of the assessee on merit was allowed in part as certain additions were sustained i.e. trading addition by applying n.p. rate at 10.5% confirming the addition of Rs. 3,25,000/- in the name of Sh. S.K. Upadhyay and not treating the interest on fixed deposit income as business income. The remaining additions were deleted by ld. CIT(A). 12 The department is in appeal against deleting the additions by ld. CIT(A) and assessee is challenging confirming the reopening the assessment and addition on account of applying n.p. rate of 10.5% and addition made in the name of Sh. S.K. Upadhyay at Rs. 3,25,000/-. 14.1 Once an assessment has been completed and the same was subject matter of appeal, therefore, in our considered view on the same issue reassessment cannot be framed after issuing notice u/s 148. Notice u/s 143(2) was not issued in time, therefore, the assessment was annulled and this action ....
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....before AO to hold that any part of income has escaped assessment. 15. In the present case there was no fresh material at all. The material which was available before the AO was only original assessment order which was annulled. Once an assessment has been annulled then department cannot adopt a recourse to corret their mistake committed originally not issuing notice u/s 143(2) in time. 23. Again such facts are not in the case in hand as the reason were recorded on the basis of annulled assessment only. Therefore, the ratio of this decision is also not applicable on the facts of the present case. 24. Few more cases on which reliance has been placed by ld. D/R i.e. in case of Raymond Woollen Mills Ltd. Vs. ITO 236 ITR 34 (SC), Claggat Brachi Co. Ltd. Vs. CIT 177 ITR 409 (SC) and Kalyan Mavji and Co. Vs. CIT 102 ITR 287 (SC). In all these cases certain information was received during the assessment proceedings and, therefore, notice u/s 148 was issued and held as valid. However, in the present case no such facts are involved as no information was received during the assessment proceedings. We have also seen various other case laws on which ....