TaxTMI 
TaxTMI 
2019 (10) TMI 390
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....(3) whereas the order ought to have been passed u/sec. 143(3) r.w.s. 147. 2. The notice issued u/sec. 148 is invalid because the approval/ sanction of the higher authority as mandated by section 151 is not obtained and therefore the assessment order is invalid. (The relevant paragraphs for approval/ sanction of higher is conspicuously struck off in the notice issued u/sec. 148) 3. The assessment order has been passed without issuing a notice u/sec. 143(2) and therefore the assessment order is invalid." 3. During the appeal hearing, the ld.AR has not pressed ground No.2 of the additional ground therefore same is dismissed as not pressed. 4. For the sake of convenience, facts are taken from ITA No. 582/VIZ/2013 in the case of B.Subba Rao which are identical for both the cases. 5. Brief facts of the case are that the assessee is earning the income from salary and other sources and also from capital gains. During the previous year relevant to the A.Y. 2005-06, the assessee has filed his return of income declaring total income of Rs. 7,09,111/- and the Assessing Officer found that the assessee owned a vacant site admeasuring 1210 sq.yds situated at survey N....
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....ice of notice, the ld.AR argued that the additional ground raised goes to the root of the assessment and the validity of assessment framed u/sec. 143(3) is questionable and hence, requested to admit the additional grounds for adjudication. 9. On the other hand, ld.DR vehemently opposed for admission of the additional grounds raised by the assessee. 10. We have heard both the sides and perused the material available on record. 11. We find force in the arguments advanced by the ld.AR since, the service of notice u/sec.143(2) is mandatory requirement as per the Income-tax Act, therefore we admit the additional grounds raised by the assessee and take up first the additional grounds for adjudication. 12. During the appeal hearing, ld.AR submitted that the Assessing Officer did not serve the notice to the assessee as required u/sec. 143(2) of the Act. The ld.AR submitted that the Assessing Officer had served the notice u/sec. 148 and the assessee responded to it by filing reply requesting to treat the return of income filed on 30/07/2005 as return in response to the notice u/sec. 148 of the Act. Therefore, the Assessing Officer is required to serve the notice on or before 31/....
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....ssee. 14. We have heard both the sides and perused the material placed on record. 15. In this case, notice u/sec. 148 was issued and served on the assessee on 28/10/2010. In response to which, the assessee has filed a letter stating that the return already filed on 30/07/2006 may be treated as return in response to the notice of 148. Thus, the assessee has complied with the notice u/sec. 148 and hence the Assessing Officer required to serve the notice u/sec. 143(2) on or before 30/09/2011 to take up the case for assessment. In the instant case, there is no evidence on record to show that the notice was dispatched or served on the assessee on or before 30/09/2011. Though, ld.DR has stated that the notice was issued on 22/08/2011, but could not place any evidence to show that the notice was served or dispatched to the assessee so as to enable him to reach the same on or before 30/09/2011. As per the notice issued u/sec. 143(2), dated 22/08/2011, the assessee required to attend the office on 30/08/2011 without having served the notice on the assessee. The department had issued notice u/sec. 142(1) on 17/10/2011 that is beyond the prescribed time limit for issuance of notice u/se....
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....igh Court reads as under: "16. Thus, the expression to issue in the context of issuance of notices, writs and process, has been attributed the meaning, to send out; to place in the hands of the proper officer for service. The expression "shall be issued" as used in section 149 would therefore have to be read in the aforesaid context. In the present case, the impugned notices have been signed on 31-3-2010, whereas the same were sent to the speed post centre for booking only on 7-4-2010. Considering the definition of the word issue, it is apparent that merely signing the notices on 31-3-2010, cannot be equated with issuance of notice as contemplated under section 149 of the Act. The date of issue would be the date on which the same were handed over for service to the proper officer, which in the facts of the present case would be the date on which the said notices were actually handed over to the post office for the purpose of booking for the purpose of effecting service on the petitioners. Till the point of time the envelopes are properly stamped with adequate value of postal stamps, it cannot be stated that the process of issue is complete. In the facts of the pre....
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....ading of the said provision makes it clear that service of notice under section 143(2) of the Act within the time limit prescribed is mandatory and it is not a mere procedural requirement. 6. In the instant case, even though a plea is taken by the learned counsel for the Revenue that the objection in relation to non-service of notice contemplated under Section 143(2) of the Act was not an issue before the Assessing Officer and the Commissioner of Income Tax (Appeals) and the same was raised for the first time before the Tribunal, we find that it is a legal plea which goes to the root of the matter and, therefore, the assessee is entitled to raise such a plea before the Tribunal, which is the ultimate fact finding body. 7. In the case on hand, it is beyond any cavil that the assessee filed return of income on 31.10.2007. Even though the department claims to have sent a notice under Section 143(2) of the Act on 17.9.2008, the Revenue failed to produce any records to show that the said notice was despatched and served on the assessee. However, it is stated that the department subsequently issued another notice under Section 143(2) of the Act on 27.8.2009, which, on t....
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.... case of C. Ramaiah Reddy (supra), this Tribunal has considered the non-issue of notice u/s. 143(2) of the Act within the period of limitation in response to notice u/s. 148 of the Act as fatal and had annulled the assessment u/s. 147 of the Act. Similar view has also been taken in the case of H. Gouthamchand (supra). The Special Bench of the Delhi Tribunal in Raj Kumar Chawla v. ITO [2005] 94 ITD 1/145 Taxman 12 (Mag.) was confronted with similar/identical facts. The questions required to be answered by the Special Bench were as under:- "1. Whether the proviso to s. 143(2) of the I.T. Act.1961, which mandates the service of notice within 12 months from the end of the month in which return is filed, also applies to the returns filed pursuant to notice under s. 148 of the I.T. Act, 1961? 2. If the answer to the aforesaid question is in the affirmative then what is the effect of non-service of notice under the proviso to s. 143(2) within the time prescribed, to the return filed pursuant to s. 148 of the I.T. Act, 1961?" The Hon'ble Special Bench, concluded that in view of the legal fiction created by sec. 148 that a return filed under that section is to....
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....lanation. The amended provisions read as follows: "Sec.148: Issue of notice where income has escaped assessment. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring 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: Provided that in a case - (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso t....
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....endment is to ensure that notices which were issued and barred by limitation and those which were not issued and which could not have been issued should be validated by the Finance Act, 2006 with retrospective effect from 1st April, 1990 amending section 142 for the purpose of validating notices which were otherwise not issued or served within the time-limit. The invalidity of notice as well as the absence of any notice became fatal to the proceedings and are sought to be validated and justified by the retrospective amendments. The explanation clarifies that the amended provisions will not apply to any return which has been furnished on or after 1st October, 2005, in response to a notice served under section 148(1) of the Act. Thus the legislature has accepted the position that issue and service of notice u/s.143(2) of the Act within the time limit laid down in those provisions is mandatory. 16. In the light of the precedents on the issue, we are, therefore, of the view that issue and service of notice u/s. 143(2) of the Act within the period of limitation contemplated under the proviso to sec. 143(2)(ii) is mandatory for validity of assessment u/s. 147 of the Act. ....