TaxTMI 
TaxTMI 
2022 (1) TMI 293
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....ime after rejection of preliminary objections as the preliminary objections were rejected on dated 13/03/2015 and the assessment order has been passed on dated 25/03/2015. It is against to the principles of natural justice. We rely on several decision of Hon'ble High Court. 4. On the facts & circumstances of the case Ld A.O. grossly erred in initiating reassessment proceedings without independent application of mind as the notice has been issued account of audit para. 5. No Notice under section 143(2) of the Act was issued before passing the assessment order. This fact is also accepted by Ld A.O. in his remand report. 6. On the facts & circumstances of the case and in law also Ld. Lower authorities grossly erred in restricting the deduction u/s 10B of the Act to Rs. 9,11,44,609/- as against claim of Rs. 9,75,24,234/- and assessing total income at Rs. 41,39,000/- as against Rs. 1,51,305/-." 2. At the time of hearing, the ld. AR of the assessee has stated at bar that the does not want to press ground No. 4 of the appeal and the same may be dismissed as not pressed. The ld. DR has raised no objection if the ground No.4 of the appeal is dismissed as no....
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....garding the notice issued U/s 143(2) of the Act. Thus, the ld. DR has heavily relied upon the orders of the authorities below and submitted that even otherwise when the assessee has not raised this issue during the assessment proceedings and thus this is covered under the provisions of Section 292BB of the Act. 6. I have considered the rival submissions as well as the relevant material on record. The undisputed facts as emerged from the records are that the original assessment was completed U/s 143(3) of the Act on 01/03/2013. Thereafter the A.O. issued notice U/s 148 of the Act on 01/11/2013 to reassess the income on account of disallowance of deduction U/s 10B of the Act. The assessee files its return on income in response to notice issued U/s 148 of the Act declaring NIL income which is duly recorded by the A.O. in para 2 of the assessment order. The A.O. further stated that in response to notice U/s 143(2)/142(1) of the Act, the ld. AR of the assessee attended and furnished the written reply. The assessee challenged the validity of reassessment order before the ld. CIT(A) on the ground that the reassessment order passed by the A.O. without issuing the notice U/s 143(2) of th....
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....13, therefore, this notice has no relevant in so far as the proceedings U/s 147 are concerned in this appeal. Except the notice dated 30/09/2011, the A.O. has not produced any material or record to show that the notice u/s 143(2) of the Act was issued after the return of income filed by the aseessee in response to notice U/s 148 of the Act. Thus, it is manifest and evident from the record that no notice was issued by the A.O. U/s 143(2) of the Act and the reassessment was completed without issuing the notice U/s 143(2) of the Act which renders the reassessment order invalid and void ab initio. The Coordinate Bench of this Tribunal in the case of M/s Mangala Ispat (Jaipur) Ltd. Vs ACIT (supra) has considered as identical issue in para 4 and 5 as under: "4. We have considered the rival submissions as well as the relevant material on record. The ld. D/R has produced the assessment record as directed by the Bench and after verification of the assessment record, the ld. D/R has fairly admitted this fact that there is no notice available on record issued under section 143(2) of the Act, however, notice under section 142(1) dated 30th May, 2014 is available on record. The ld. D/R....
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.... under section 143(2) is a mandatory requirement and gives the jurisdiction to the AO to proceed with the scrutiny assessment. It is a jurisdictional condition and in the absence of the notice under section 143(2), the order passed by the AO is invalid for want of jurisdiction. Once the assessee has filed the return of income in response to notice under section 148, then the notice under section 143(2) is a mandatory jurisdictional requirement for taking up the return of income under scrutiny. The Hon'ble Supreme Court in case of ACIT vs. Hotel Blue Moon (supra) while considering the requirement of notice under section 143(2) in block assessment proceedings, has held in para 15 to 18 as under :- "15. We may now revert back to Section 158 BC(b) which is the material provision which requires our consideration. Section 158 BC(b) provides for enquiry and assessment. The said provision reads "that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, subsection (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply." An analysis of t....
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....tended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14 August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression "So far as may be" in Section 153 BC(b), the issue of notice is not mandatory but optional and are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation mad....
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....On a consideration of the provisions of Chapter XIV-B of the Act, we are in agreement with the reasoning and the conclusion reached by the High Court." The Hon'ble Apex Court has held that the notice under section 143(2) is a mandatory condition and cannot be dispensed with and omission on the part of the AO to issue notice under section 143(2) cannot be a procedural irregularity and same is not curable. A similar view has been taken by the Hon'ble Supreme Court in case of CIT vs. Laxman Das Khandelwal (supra) and held in para 9 and 10 as under :- "9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section s....
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....nable 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, then he should have drawn the attention of the Assessee to that fact. In the present case all that the AO did was to send a notice under Section 142 (1) of the Act. The Assessee was not made aware as to why he was required to file a return. Had a notice been issued to him under Section 143 (2) of the Act, the AO would have been obliged to let the Assessee know why he was being asked to file a return notwithstanding his letter dated 1st April 2011. In the circumstances, the Assessee was justified in proceeding on the basis that it had not committed any default in communicating to the AO that the return already filed should be treated as the return filed pursuant to the notice under Section 148 of the Act. 20. The proposal to reopen an assessment under Section 147 of the Act is t....