AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (11) TMI 1977
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....f NTPC Ltd. Vs. CIT 229 ITR 383 (SC) we admit the additional grounds raised by the assessee for the adjudication on merits. 5. Since the issue raised in the additional grounds are legal in nature and go to the root of the matter therefore, we first take up the additional grounds raised by the assessee for adjudication. 6. The first objection raised by the assessee is regarding the validity of assessment framed under Section 143(3) r.w.s. 153C of the Income Tax Act, 1961 (in short 'the Act'). The learned Authorised Representative of the assessee has submitted that the search was conducted on 6.2.2012 and in pursuant to the search the Assessing Officer issued a Notice under Section 153C for the Assessment Year 2012-13 which is not valid as this assessment year is the current year in which the search itself was carried out. Therefore, he has submitted that the assessment framed under Section 153C is not valid and liable to be quashed. 3. On the other hand, the ld. CIT DR has submitted that there is no dispute that the search was conducted in the previous year relevant to the assessment year under consideration therefore the provisions of Section 153C are not applicable for ....
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....equently issued a Notice under Section 142(1), the same will not effect the validity of the assessment in question framed under Section 143(3) of the Act. Accordingly, we do not find any merit or substance in additional ground No.2 and the same is dismissed. 9. The additional ground No.3 is regarding the validity of assessment due to the reason that the Notice issued under Section 143(2) on 21.10.2013 is beyond the limitation provided under law and consequently the assessment framed on the basis of the said time barred Notice is not valid. 10. On the other hand, the learned CIT DR has submitted that the AO has acted upon the return of income only when the assessee filed its letter dt.8.10.2013 wherein it was stated that the assessee has filed its return of income and copy was attached to the said letter. Therefore it was contended that the limitation for issue of Notice under Section 143(2) would reckon from 8.10.2013 and consequently the Notice issued by the Assessing Officer under Section 143(2) on 21.10.2013 is within the limitation. 11. We have considered the rival submissions as well as the relevant material on record. We find that the assessee filed its return of income by....
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....ued under Section 143(2) is invalid being barred by limitation, the same would render the assessment framed as bad in law for want of jurisdiction of the Assessing Officer. Thus it is settled proposition of law that no assessment can be made if the Notice issued under section 143(2) is invalid being beyond the period of limitation prescribed under the said section. The Delhi Special Bench of this Tribunal in the case of Rajkumar chawla & Others Vs. ITO 94 ITD 1 while considering the identical issue has held in paras 26 to 42 as under : " 26. The purpose of serving the notice has been explained in Circular No. 545, dt. 31st Oct., 1989 as reported in (1990) 82 CTR (St) 1 : (1990) 182 ITR (St) 1 as under : "A proviso to sub-s. (2) provides that a notice under the sub-section can be served on the assessee only during the financial year in which the return is furnished or within six months from the end of the month in which the return is furnished, whichever is later. This means that the Department must serve the said notice on the assessee within this period, if a case is picked up for scrutiny. It follows if an assessee, after furnishing the return of income does not receive a no....
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....uired to be furnished under s. 139 or s. 148. That makes the provision clear that an assessment made under s. 147 also will be a regular assessment under s. 143 or s. 144. Accordingly, we hold that any assessment made for the first time by resort to s. 147 will also be a regular assessment for the purpose of invoking s. 217 of the Act. With great respect, we dissent from the view expressed in certain decisions referred to earlier in this judgment which take a contrary view." Essentially, therefore, there is no choice to apply part of the section and leave the other part when the effect has to be given to the scheme contained in the whole section i.e., s. 143(2) of the Act along with the proviso. Proviso, therefore, cannot be divorced from the main section. It has to be construed with reference to the preceding parts of the section to which it is appended and as subordinate to the main provisions of the Act. It has been said that there is no rule that an Act containing a proviso is to be construed as to its first or enacting part without reference to the proviso. The section must be construed as a whole, each portion throwing light on the rest. Lord Wright in Lemings vs. K....
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....e Act. They are as under : 1. Chapter XIV-B is a complete code for assessment of search cases. Reassessment under s. 148 falls under Chapter XIV which prescribes the procedure for making assessment and incorporates ss. 139, 142 143, 144, 147, 148 and 153, etc. Thus the two falls under different chapters. 2. Sub-s. (1) of s. 158BA clearly spells out that where search takes place, the AO shall proceed to determine the undisclosed income of the person in accordance with the procedure laid down in this chapter. 3. Explanation to sub-s. (2) of s. 158BA provides that assessment made under this chapter shall be in addition to the regular assessment. 4. The procedure of completing the block assessment has been laid down under s. 158BC. 5. 158BE provides the limitation of completing the block assessment. 6. 158BFA makes the provision of levying interest and penalty in block cases. 7. Sec. 113 provides the rate at which income determined under the block is to be taxed. 31. In contrast, s. 148 does not provide any methodology for computing the income on reassessment or assessment. On the contrary, it creates a legal fiction that such return shall be treated as one made un....
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.... judgments, some of which are as follows : (a) Mrs. Rama Sinha (supra) (b) R.B. Seth Shreeram Durga Prasad & Fateh Chand Nursing Das (Export Firm) vs. CIT (1987) 64 CTR (Bom) 44 : (1987) 168 ITR 619 (Bom) (c) R. Dalmia & Ors (AOP) vs. CIT (supra) (d) R. Dalmia & Anr. vs. CIT (supra) (e) Lally Jacob vs. ITO (supra) (f) K. Govindan & Sons vs. CIT (supra) (g) CIT vs. Usha Agarwal (1990) 84 CTR (P&H) 97: (1989) 178 ITR 406 (P&H) Suffice to say that answer to all these lay in the following passage of the apex Court as stated in R. Dalmia vs. CIT (supra), a judgment strongly relied by Shri Sampath, the counsel for the appellants. "As to the argument based upon ss. 144A, 246 and 263, we do not doubt that assessments under s. 143 and assessments and reassessments under s. 147 are different, but in making assessments and reassessments under s. 147 the procedure laid down in sections subsequent to s. 139, including that laid down by s. 144B, has to be followed." 34. Now we come to one of the main contentions of the Department that s. 148 uses the phrase 'so far as may be' and, therefore, the procedural set up in Chapter XIV will apply to the extent it is ....
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....eriod of 30 days from the date of receipt of notice is allowed). AO will never issue a notice granting the assessee unlimited period to file the return. If he does so, he would be doing so at his own peril. If the return is not filed within that period, that would not amount to a return pursuant to notice under s. 148. Therefore a situation envisaged by the learned Departmental Representative would not arise. Although a situation is quite possible where the period available for filing the return and the period available to complete the assessment may overlap. But this overlapping is based on a misconception that proviso gives a vested right to the AO to wait till the last day of the 12th month to issue notice. In the given circumstances, notice could be issued earlier as the AO is supposed to act diligently and cannot be expected to act carelessly when the question of due share of tax of the State is concerned. It is pertinent to note that the proviso states the outer limit and not the minimum limit within which a notice could be issued if the other provision warrants, this period would get reduced. Supposing that a view is taken that proviso is not applicable and if notice under s....
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.... by placing reliance on the apex Court decision in Ujagar Prints vs. Union of India (supra), the learned Departmental Representative has argued that it being a referential legislation, only machinery provision of s. 143 will be applicable and nothing more. This argument of the learned Departmental Representative is misplaced. By reading the whole judgment, it will be clear that the said judgment does not advance the case in their favour. Before adverting to the same, it is relevant to understand the background of the same. The aforesaid judgment pertains to the dispute under The Central Excises and Salt Act, 1944 (CE Act in short), and The Addl. Duties of Excise Act, 1957 (AD Act in short). The AD Act, 1957 did not prescribe any procedure for levy and collection of duty leviable under that Act, but provided that the procedure in the CE Act should be followed. The specific dispute was that it did not define the word 'manufacture', but by virtue of s. 2, it provided that for the purposes of the Act, definition of specified goods as contained in CE Act be adopted. Later, by an Amendment Act, 1980 the definition of 'manufacture' in CE Act was enlarged to include 'processing....
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....the first or second category is always a question of construction. In the present, case, in my view, the legislation falls into the second category. Sec. 3(3) of the 1957 Act does not incorporate into the 1957 Act any specific provisions of the 1944 Act It only declares generally that the provisions of the 1944 Act shall apply "so far as may be", that is, to the extent necessary and practical, for the purposes of the 1957 Act as well." Later on at p. 362, the Court held as under : "There is no reason or logic why all the incidents attaching under the earlier legislations in so far as they are not clearly inconsistent with the later one, should not be extended to the later legislation as well." And concluded by saying as under : "In the circumstances, I agree that we should give full and literal effect to the language of s. 3(3) and hold that it has the effect not only of attracting the procedural provisions of the 1944 Act but also all its other provisions including those containing the definition" 37. From the above passages we do not find any limitation put by the apex Court in the applicability of the referential legislation. Therefore we are of the view that full provis....
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....of the Act must be assumed and treated to be a return filed under s. 139 of the Act and the assessment must thereafter be made under s. 143 or 144 of the Act after complying with all the mandatory provisions. Accordingly, it is incumbent upon the assessing authority to issue notice under s. 143(2) of the Act within the period as stipulated in the proviso thereunder. In this view of the matter, the first question before the Special Bench is answered in affirmative. 41. So far as the issue on question No. 2 is concerned, we hold that no assessment can be made if the notice under s. 143(2) of the Act is not served within the time prescribed by the proviso under s. 143(2) of the Act and thus the return filed will be deemed as accepted. 42. In the case of appellants S/Shri Raj Kumar Chawla, Rajiv Chawla and Ajay Chawla, notice under s. 148 was issued on 26th March, 1998. Shri Ajay Chawla filed the return of income on 28th April, 1998, but notice under s. 143(2) of the Act has been issued on 13th July, 1999 for 21st July, 1999. Shri Raj Kumar Chawla filed return on 15th May, 1998, but notice under s. 143(2) is stated to have been issued on 13th July, 1999 and served on him on 21st ....