TaxTMI 
TaxTMI 
2022 (12) TMI 26
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....red in law by confirming the action of issue of notice u/s.148 of the Income Tax Acl, 1961 and issue of notice under section 143(2) of the Act and therefore the order passed by the Id.AO should be quashed. 3. That the learned Commissioner of Income Tax (Appeals) has erred in law by confirming the assessed income wherein addition of Rs.8,78,660/- (Rs.7,73,000/- of Credit under section 69, Rs.7,730/- of Income, Rs.48,000/- for Household expenses and addition u/s 154 of Rs.49,930/-) has been made by the Id.AO and therefore the AO is directed delete the said additions, while computing the total income. 4. The Id.AO is to be directed to compute the correct amount of interest under section 234A and 234B of the Act, on the last assessed income. 5. That the appellant craves liberty to add, amend, alter and delete any grounds of appeal before the final hearing. 3. The assessee in ground No. 1 and 2 has challenged the validity of the assessment framed under section 147 read with section 143(3)/254 of the Act on the reasoning that the assessment has been framed without issuing notice under section 143(2) of the Act. 4. It is the 2nd round of litigation before us. The ITAT on the e....
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.... to 2001 are not traceable.; The basic records for service of the notices ere. are the dispatch regjster and the diary of the Notice Server. If the notice was not served upon the appellant, the first ground before the CIT(A) could have been regarding service of the notice u/s 143(2) of the Act. However, the appellant had wailed for the record to be not traceable., Even, no ground of appeal was taken before the Tribunal initially but additional ground of appeal was raised when it was confirmed that no benefit will be available on merits from the Tribunal^ The appellant had raised the additional ground before the Hon'ble Ahmedabad Tribunal only when he was confirmed that the initial records prior to 2001 cannot be traced out. The circumstantial evidences are on record as the Counsel of the appellant had appeared before the Assessing Officer on 16.09.1998 in compliance to the notice dated 08.09,1998 issued and served upon the appellant and continued the hearing till finalisation of assessment. Therefore, the benefit of absence of initial records cannot be given to the assessee after lapse of about 13years from the date of issue of notice u/s .143(2) of the Act. The Assessing Offic....
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....rthermore, the assessee did not challenge the validity of the assessment before the ld. CIT-A as well. The assessee also cooperated during the assessment and thus the assessee cannot challenged the service of notice under section 292B of the Act. The ld. DR vehemently supported the order of the authorities below. 12. We have heard the rival contentions of both the parties and perused the materials available on record. Under the provisions of the Act, there is a time limit specified under the respective section of the Act for filing the appeal against the finding of the specified authority. However, the provisions of the Act also provides relaxation to the parties, if failed to file the appeal within the stipulated time, if there was the sufficient cause which prevented the assessee/party in doing so. It is the trite law that the Hon'ble Courts time and again in the series of cases have held that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. In this regard, we note that the Hon'ble Madras High Court in the case of Sreeniv....
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....ssion "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. We are, therefore, of the opinion that the Appellate Tribunal ought to have condoned the delay in filing the appeal, considering the reasons given by the assessee for the delay." 12.1 The assessee, in the present case, has explained the reasons for the delay in filing the appeal. There was the affidavit filed by the assessee, explaining the reasons for the delay in filing the appeal before us. However, the Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. 12.2 It is also important to note that Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down certain principles for considering the condonation petition for filing the appeal which are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, t....
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....an appeal against the original order of assessment under the Act, which was passed about 20 years ago, as it was evident that the appeal was against an order of rejection of relief by the assessing authority. Thus, though the Tribunal's view that there was no question of limitation in such cases, was not correct yet the AAC was right in condoning the delay and entertaining the appeal." 12.6 From the above, we note that the Hon'ble Madras High Court in the above case was pleased to condone delay for 20 years approximately by holding that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. 12.7 The delay in the instant case is just of 2337 number of days which cannot be considered to be inordinate or excessive in comparison to the delay of 7330 days approximately. In view of the above, we are of the opinion that when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period of the delay. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for co....
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....147 the procedure laid down in sections subsequent to section 139, including that laid down by section 144B, has to be followed" 13.3 From the above judgment, there remains no ambiguity that the procedural provisions for making the assessment under section 143(3) of the Act has to be followed. Therefore, it is mandatory upon the Revenue to ensure the service of notice under section 143(2) of the Act even in the assessment framed under section 147 of the Act. 13.4 We also find support and guidance from the order of Special Bench of Delhi in the case of Raj Kumar Chawla v/s ITO reported in 145 Taxman 12 wherein it was held as under: "Section 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 under section 139. By the creation of such legal fiction all the procedures prescribed in and subsequent to section 139 automatically apply in toto. It is a settled principle that a legal fiction has to be taken to its logical conclusion and, therefore, what is valid for a return under section 139 will be valid with equal force to a return filed under section 14....
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....t an assessment made under section 147 also will be a regular assessment under section 143 or section 144. Accordingly, we hold that any assessment made for the first time by resort to section 147 will also be a regular assessment for the purpose of invoking section 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." (p. 452)" 13.6 We also find support and guidance from the judgment of Hon'ble Gujarat High Court in the case of ITO versus Smt. Sukhini P. Modi. Reported in 367 ITR 682 wherein it was held as under: "8. The apex court in the case of Asstt. CIT v. Hotel Blue Moon [2010] 321 ITR 362/188 Taxman 113 has considered the very issue. The apex court held that the Assessing Officer has to necessarily follow the provisions of section 142 and sub-sections (2) and (3) of section 143. It did not accept the submission of the Revenue that the requirement of the notice under section 143 can be dispensed with and the same is mere procedural irregularity. In the words of the apex court, it is held as under (page 370) : "The case of the Revenue is that the expression 'so fa....
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....d support and guidance from the judgment of Hon'ble Gujarat High Court in the case of PCIT v/s Marck Biosciences Ltd. reported in 106 Taxmann.com 399 wherein it was held as under; "The facts as emerging from the record show that it is an admitted position that no notice under section 143(2) had been issued after the assessee informed the Assessing Officer to treat the earlier return of income as the return filed in response to the notice under section 148 of the Act. In other words, no notice under section 143(2) was issued after the filing of the return of income. The question that, therefore, arises for consideration is whether the assessment order framed under section 143(3) read with section 147, would be rendered invalid in the absence of a notice under section 143(2) of the Act? On a plain reading of provision of section 143(2), it is manifest that it contemplates that when an assessee files a return under section 143 and the Assessing Officer finds that any claim as described therein is inadmissible, he is required to serve a notice to the assessee specifying particulars of such claim and a date on which he should produce or cause to be produced, any evidence or particu....
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....be attracted. In the light of the fact that non-issuance of a notice under section 143(2) is not a procedural irregularity, the same cannot be cured under section 292BB of the Act and hence, the assessment order passed without issuance of notice under section 143(2) would be rendered invalid. The Tribunal as well as the Commissioner (Appeals), therefore, did not commit any error in holding that the notice issued prior to the filing of the return of income was invalid and that, in absence of a valid notice under section 143(2) the assessment order was rendered invalid." 13.10 We also find important to refer the judgment of Hon'ble Gujarat High Court in the case of CIT Vs. Panorama Builders Pvt. Ltd. reported in 45 taxmann.com 159 wherein it was held as under: "14. Therefore, we are of the considered opinion that section 292BB does not apply to issuance of notice, neither it cures the defect or enlarges statutory period where a mandatory notice under section 143(2) of the Act is required to be issued within limitation fixed under the Act. In absence of issuance of the notice under the proviso to section 143(2) of the Act within a period of 12 months from the end of the month i....