TaxTMI 
TaxTMI 
2021 (9) TMI 848
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....he of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 2. At the outset it was pointed out that the issue involved in both the appeals was identical arising in the backdrop of identical facts and circumstances. That in both the sets of appeals the case of the assessee had been reopened by the AO having information from ADIT(Investigation)-2, Ludhiana, that a survey action was conducted by the DIT(Investigation), Kolkata on various share brokers during which the share brokers accepted their role in the entire scam of providing accommodation entries of bogus Long Term Capital Gain/Short Term Capital Loss in case of penny stock company M/s. Twenty First Century India Limited. It transpired that both the assessees had sol....
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.... records do not contain any notice u/s. 143(2) issued to the assessees. It therefore, appears that no notice u/s. 143(2) of the Act was issued in the re-assessment proceedings. 4. It is settled law that issuance of notice u/s. 143(2) of the Act in re-assessment proceedings for the purpose of making adjustments to return filed by the assessee in response to notice u/s. 148 of the Act is a mandatory requirement. The section itself mandates this requirement and even courts have held so. This proposition has been laid down by the Hon'ble High court of Delhi in the case of Pr. CIT & Anr vs Silver Line & Anr (2016) 383 ITR 455 (Del), referring in the said case number of decisions laying down the said proposition of law as under: "....
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.... the discretion to issue a notice under Section 143 (2) if he considers it 'necessary or expedient' to do so. This exercise by the AO under Section 143 (2) of the Act is qualitatively different from the issuance of a notice under Section 142(1) of the Act, which as noted hereinbefore, is in a standard proforma. 19. The Court is unable to accept the submission of the Revenue that in the present case, no return was filed by the Assessee pursuant to the notice issued to it under Section 148 of the Act. If after receiving the letter dated 1st April 2011 of the Assessee the AO was of the view that the return originally filed in the Saral Form could not be treated as the return pursuant to the notice under Section 148 of the Act,....
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....the Act. The Assessee thereafter appeared before the AO and stated that the original return filed should be treated as the return filed in response to the notice under Section 148 of the Act. In those circumstances, the High Court observed that if there was some explanation that was required to be offered by the Assessee, notwithstanding the above submission made by it, the AO ought to have issued a notice under Section 143(2) of the Act. The Madras High Court observed: "Merely because the matter was discussed with the Assessee and the signature is affixed it does not mean the rest of the procedure of notice under Section 143(2) of the Act was complied with or that on placing the objection the Assessee had waived the notice for fur....