TaxTMI 
TaxTMI 
2022 (12) TMI 884
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....roceeding initiated u/s 143(2) of the I.T. Act, 1961. (2) For that the ld. CIT(A) erred in annulling the assessment order only on the basis of the submission of the assessee at the appeal stage that no notice u/s 143(2) was issued on the revised return without going into the merits of the additions made in the assessment order. (3) For that appellant craves leave to add, alter, amend any/ all of the grounds of appeal before or during the course of the hearing of the appeal. 3. Brief facts of the case are that the assessee has filed its return of income electronically on 26.09.2013 declaring a loss of Rs.182,05,36,779/- after claiming all allowable deductions. The case of the assessee was selected for scrutiny assessment through CASS and notice under section 143(2) was issued and served upon the assessee on 04.09.2014. The ld. Assessing Officer has passed a scrutiny assessment order on 18.03.2016 under section 143(3). According to the assessee, it has revised its return on 23.02.2015 and cognizance of this return was not taken by the ld. Assessing Officer. Therefore, dissatisfied with the assessment order, the assessee carried the matter in appeal before the ld. 1st Appellate A....
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....was bona fide mistake that impelled assessee to file revised return on 30.03.2016. Reason for filing Revised Return had been spelt out in the written submission. It was due to comments given by the CAG. Therefore, there was sufficient bona fide reason for filing the revised return. In the report of the AO, it is stated that there was no violation of provision of law while filing the revised return. 3.3.1. Relevant issue to be decided is whether valid assessment order can be passed on basis of notice issued u/s 143(2) on the original return. For this, it will be in the fitness of things if reference is made to decisions of higher Appellate Authorities on the subject. There are decisions of Hon'ble High Courts wherein it is held that once a valid return return is filed, natural consequence is that the earlier return would be effaced or obliterated for all purposes under the Act. It is not open for the AO to advert to the original return or the statements filed along with the original return. Only the revised return has to be taken into account for the purposes of making the assessment. This point of view had been held in the following cases:- (i) CIT -vs.- Rana Polycot Ltd. (2012....
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....ssment proceeding. Assessment order cannot be passed based on "a return that had been withdrawn and revised. Considering the decisions of Hon'ble Courts on the matter, the impugned assessment order cannot be held to be valid. The same is annulled. If in the opinion of the AO, there is escapement of income in the year, he is free to resort to proceeding u/s.147 of the Act. Appeal is allowed". 4. The ld. Departmental Representative while impugning the order of ld. CIT(Appeals) contended that non-consideration of the revised return at the end of the ld. Assessing Officer while determining the taxable income of the assessee can be a mere irregularity, which can be rectified either by way of exercising the powers under section 154 by the ld. Assessing Officer or by the ld. 1st Appellate Authority, but it is not a fatal injury on the proceedings as a whole where assessment order is to be quashed. 5. On the other hand, ld. Counsel for the assessee on the strength of following decisions:- (i) CIT -vs.- Rana Polycot Ltd. (2012) 347 ITR 466 (P&H); (ii) CCIT -vs.- Machine Tools Corpn. Of India (1993) 201 ITR 101 (Karnataka); (iii) Beco Engineering Co. Ltd. -vs. VIT (1984) 148 ITR ....
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....usal of this section would reveal that where a return has been furnished under section 139 or in response to a notice under sub-section (1) of section 142, the ld. Assessing Officer or the prescribed incometax authority if considers it necessary or expedient to ensure that assessee has not understated income or has not computed excessive loss or has not underpaid tax in any manner serve on the assessee, a notice requiring him on a date to be specified therein to produce any evidence on which the assessee may rely in support of the return. In other words, this section has two compartments, the first compartment is that this section provides that a notice should be issued within the time limit provided in the proviso to this section. 8. The second compartment of this section is that it provides an opportunity to an assessee as to what it wants to submit in support of the claim made in a return. The Hon'ble Courts are unanimous on the points that if no such notice is issued within the time limit, then assessment proceedings would be void ab initio. However, the situation in the present case is altogether different. A valid return was filed by the assessee under section 139(1) on 26.0....