TaxTMI 
TaxTMI 
2023 (3) TMI 208
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.... law. The facts of case in ITA No. 31/RJT/2020 in the case of Shri Girishbhai Nanjibhai Solanki have been adopted as the lead case for the sake of brevity and convenience. Accordingly, we hereby proceed to adjudicate the issue in ITA No. 31/RJT/2020 only. However, the finding will be applicable for all the 5 appeals specified under the heading. 3. The assessee has vide application dated 23rd December 2022 pleaded before us for admitting the additional ground of appeal which reads as under: "1. The appellant most respectfully prays before the Hon'ble Income Tax Appellate Tribunal, Rajkot to allow the following additional ground of appeal to be raised in the above matters: Ground no. 1 "That, the Ld. AO has wrongly reopened assessment u/s 148 of the I.T. Act." Ground no. 2 : "That, the order u/s 143(3) r.w.s. 147 of the I.T. Act, 1961 is bad-in-law as the notice u/s 143(2) is issued beyond the statutory time limit." 2. This ground goes to the root of the matter and it is a legal ground as to the validity of the reassessment. 3. The legal ground can be taken up at any stage, in this regards reliance is placed on decision of Supreme Court in case of National Thermal Power Co....
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....the other hand, the learned DR before us contended that the assessee has never challenged the validity of the assessment framed under section 147 of the Act on the reasoning that notice under section 143(2) of the Act was issued beyond the time limit prescribed under the Act. As per the learned DR, it is not the case here that the notice was not issued under section 143(2) of the Act. Accordingly, such defect can be cured under the provisions of section 292BB of the Act in view of the judgement of Hon'ble Supreme Court of India the case CIT versus Laxmandas Khandelwal reported in 108 Taxman.com 183 wherein it was held that if there is any issue or infirmity in relation to the service of notice the same can be cured under the provisions of section 292BB of the Act. 8. It was also pointed out by the learned DR that undoubtedly the notice under section 143(2) of the Act was issued belatedly but before the completion of the assessment. Furthermore, this issue was not challenged before the authorities below, therefore the same can be cured under the provisions of section 292BB of the Act. The DR to this effect has also filed the written submissions running into 1 to 11 pages. 9. We ha....
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....udgment is reproduced as under: "It is no doubt that assessments under section 143 and assessments and re-assessments under section 147 are different, but in making assessments and reassessments under section 147 the procedure laid down in sections subsequent to section 139, including that laid down by section 144B, has to be followed" 11.1 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. 11.2 We also find support and guidance from the order of Special Bench of Delhi Tribunal 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 to....
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....ds the regular assessment under section 143 or section 144. It is pertinent to note that section 140A(1) deals with a return required to be furnished under section 139 or section 148. That makes the provision clear that 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)" 12. Thus in view of the above we conclude that the AO was under the obligation to issue a notice under section 143(2) of the Act for making the assessment or reassessment as the case may be. In case AO has not done so, the order framed under section 143(3) read with section 147 of the Act becomes invalid. 13. Now coming to second question whether the notice under section 143(2) issued beyond the statutory time limit provided under the Act can be held invalid or the provisions of section 292BB of the Act come to rescue the revenue. In this ....
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....s reported in 287 ITR 360 wherein it was held as under: Section 143(2) requires that where a return has been made by an assessee, if the Assessing Officer considers it necessary or expedient to ensure that the assessee has not understated the income, or has not computed excessive loss, or has not underpaid tax in any manner, he shall serve on the assessee a notice requiring him either to attend his office, or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return. Therefore, the language of the main provision requires the Assessing Officer to prima facie arrive at satisfaction of existence of any one of the three conditions. The proviso under the said sub-section states: "provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished". On a plain reading of the language in which the proviso is couched it is apparent that the limitation prescribed therein is mandatory, the format of the provision being in negative terms. The position in law is well-settled that if the requirements of a statute which prescribes the man....
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....uld be deemed to be valid in the three circumstances provided therein, namely, where the assessee has participated in the proceedings it would not be permissible for him to raise objection that (i) the notice was not served upon him; or (ii) was not served upon him in time; or (iii) was served upon him in an improper manner Thus, all the circumstances contemplated under section 292BB of the Act are in a case where a notice has been issued, but has either not been served upon the assessee or not served in time or has been served in an improper manner. The said provision clearly does not contemplate a case where no notice has been issued at all In the facts of the present case, if the contention of the assessee were to be accepted, it would amount to dispensing with the notice under section 143(2) of the Act in view of the fact that it is an admitted position that no such notice had been issued after the return of income was filed by the assessee. After the filing of the return of income, unless a notice under section 143(2) of the Act is issued to the assessee, he would have no means of knowing as to whether or not the Assessing Officer has accepted the return of income as filed....