TaxTMI 
TaxTMI 
2022 (8) TMI 1358
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....ooking into the material already on record. Placing reliance on the judgments of Hon'ble Supreme Court in the cases of National Thermal Power Co.Ltd. vs CIT 229 ITR 383 (SC) and Jute Corporate of India Ltd.v s CIT 187 ITR 688 (SC), Ld.AR submitted that additional grounds may kindly be admitted for adjudication and revised regular Ground No.1 may also be taken on record. 4. Ld.CIT DR strongly opposed the admission of additional ground. However, in all fairness, Ld.CIT DR submitted that revised Ground No.1 raised by the assessee may be taken on record. 5. On careful consideration of the above and submissions of the assessee, we may point out that by the application, the assessee seeks to raise following additional grounds:- Additional Ground No.1: "The impugned assessment is invalid and without jurisdiction as the said assessment is completed without complying with mandatory legal requirements of the provisions of section 143(2) of the Income Tax Act therefore such assessment is void ab initio and liable to be quashed. " Additional Ground No.2: "On the facts and circumstances of the case and also in law, the impugned assessment order passed by the Ld AO u/s 143(3) of the....
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....as been issued mechanically without application of mind. To support the above proposition of law, reliance is placed in the decisions of Director of Income Tax vs. Society for Worldwide Interbank Financial Telecommunications (2010) 323 ITR 249 (Del), Micron Enterprises Pvt Ltd vs ITO ITA No.901 /Del/2016 dt: 14.05.2018 (SMC Bench) and Astech Industries Pvt Ltd vs DCIT ITA No.2332/Del/2018 dt: 20.12.2018 (DB) is relevant on the identical facts, the Hon'ble ITAT quashed the reassessment proceeding, reliance is placed in the decisions of Shri Harsh Bhatia vs. ITO ITA No. 1262 and 1263/Del/2017 df: 17.10.2017, Satish Kumar vs ITO ITA No.3586/Del/2018 dt: 14.01.2019, M/s. Castleton Capital Ltd. Vs ACIT in ITA No.495/Del/2017 dt: 27.09.2019 and M/s DUrga Ferrous ITA No.672/Del/2019 vide order dt: 13.02.2020." 8. Ld.AR submitted that the AO proceeded to make assessment u/s 143(3) of the Act by issuing notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") firstly, on 29.09.2015 along with notice dated 29.09.2015 u/s 143(2) of the Act. Ld.AR vehemently pointed out that the said notices were issued by the AO without having copy of return of income in its possession which is clear fr....
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....of income filed by the assessee. But in the present case, the assessee had filed return of income much earlier on 22.11.2014 therefore, the judgement of Hon'ble Jurisdictional High Court is not applicable in the present case in favour of the assessee. 10. Placing re-joinder to the above, Ld.AR of the assessee again drew our attention towards pages 8 to 10 of the assessee's Paper Book and submitted that at the time of issuing notice u/s 142(1) of the Act and first notice issued u/s 143(2) of the Act on 29.09.2015, the AO having knowledge of e-filing of return of income by the assessee on 22.11.2014 that is why in the notice u/s 142(1) of the Act dated 29.09.2015, the AO asked the assessee to file return of income in a prescribed format as per Rule 12 of Income Tax Rules, 1962, enclosing a copy of prescribed and blank form of return of income. Ld.AR further submitted that in response to the said notice, the assessee vide letter dated 26.10.2015, enclosing the copy of the acknowledgement of e-filing of return of income on 22.11.2014 for AY 2014-15, informed that the return of income has already been filed by the assessee. Till this time, the AO was not having original or copy of the ....
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....nd perused the records, especially the impugned order and the case laws cited by the Ld. Counsel for the assessee. We note that Assessee filed its return of income for the assessment year 2009-2010 on 29.09.2009 declaring income of Rs.339,85,750/- and the same was processed u/s 143(1) of the Act on 19.02.2011. Later on, certain information as mentioned in assessment order was received from Investigation Wing regarding search and survey action of Surender Kumar Jain and his brother Virendra Jain and it was reported by Investigation Wing to the AO that they were engaged in business of providing accommodation entries allegedly through certain companies. On the basis of said Investigation Wing information, reopening was made u/s 148 of the Act by the AO vide notice u/s 148 of the Act dated 28.03.2016. In response to the same, admittedly return was filed by letter dated 27.04.2016 which is specifically acknowledged by AO in assessment order at Para 2 of the assessment order. Notably, said return is expressly accepted by AO as valid return for purposes of assessment u/s 148 of the Act. As mentioned in assessment order itself, when the said return was taken on order sheet by AO vide order....
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....e, confirmation of share capital raised, Share certificate, income tax particulars of share holders, bank statement of share holders and form 2 for allotment of shares along with their audited final a/c thus discharging its primary burden u/s 68 on three ingredients of identity, creditworthiness and genuineness of share holders. AO unimpressed by the same in the only show cause notice which is placed in paper book is dated 13/10/2016 where only thing asked by AO is to produce the directors of those share holder companies. For mere non production of said shareholders without anything more, as evident from pages 6 & 12 even though summon issued u/s 131 have been accepted to be served on them in the assessment order adverse inference u/s 68 of the Act is drawn by AO to make addition of Rs 185,00,000 which is impugned here before us. In first appeal, before Ld CIT(A) confirmed the order of the AO has rejected assessee's detailed submissions challenging reopening action u/s 148 of the Act and while confirming the addition made by AO it is very glaring from ld CIT(A)'s order page 16 that primary reason which has weighed on him to confirm said addition is mere non production of share hold....
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....nected matters Page 10 of 15 of Income Tax v. Mukesh Kumar Agrawal (2012) 345 ITR 29 (All.) and pointed out that Section 292BB of the Act was a rule of evidence which validated service of notice in certain circumstances. It introduces a deeming fiction that once the Assessee appears in any proceeding or has cooperated in any enquiry relating to assessment or reassessment it shall be deemed that any notice under any provision of the Act that is required to be served has been duly served upon him in accordance with the provisions of the Act and the Assessee in those circumstances would be precluded from objecting that a notice that was required to be served upon him under the Act was not served upon him or not served in time or was served in an improper manner. It was held that Section 292BB of the Act is a rule of evidence and it has nothing to do with the mandatory requirement of giving a notice and especially a notice under Section 143(2) of the Act which is a notice giving jurisdiction to the AO to frame an assessment. The decision of the Allahabad High Court in Manish Prakash Gupta v. Commissioner of Income Tax (supra) is also to the same effect." 7.3 While arguing on above a....
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....isen to make substantial modifications in the draft development plan. The expression: so considered necessary is again of crucial importance. The term consider means to think over; it connotes that there should be active application of the mind. In other words the term consider postulates consideration of all the relevant aspects of the matter. A plain reading of the relevant provision suggests that the State Government may publish the modifications only after consideration that such modifications have become necessary. The word necessary means indispensable, requisite; indispensably requisite, useful, incidental or conducive; essential; unavoidable; impossible to be otherwise; not to be avoided; inevitable. The word necessary must be construed in the connection in which it is used. (See-Advanced Law Lexicon, 3rd Edition, 2005; P. Ramanatha Aiyar) 26. The formation of the opinion by the State Government should reflect intense application of mind with reference to the material available on record that it had become necessary to propose substantial modifications to the draft development plan." 7.4 Ld. Counsel for the assessee also stated that there is no application of mind in pre....
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....ent completed on the basis of the notice was also invalid and was consequently set aside. It is for the first time that the counsel for the appellant contends that the notice, in fact, was issued on 27th March, 2000 and not on 23rd March, 2000, the date which is recorded on the notice itself. No such contention was raised before the lower appellate authorities. Consequently, the said contention cannot be raised before the Court for the first time. The appellant has stated that the return was filed by the assessee on 27th March, 2000 and the notice under s. 143(2) was served upon the Authorized Representative of the assessee by hand when the Authorized Representative of the assessee came and filed return. However, the date of the notice was mistakenly mentioned as 23rd March, 2000. Assuming the aforesaid to be true, the notice was served on the Authorized Representative simultaneously on his filing the return which clearly indicates that the notice was ready even prior to the filing of the return. The provisions of s. 143(2) make it dear that the notice can only be served after the AO has examined the return filed by the assessee. Whereas it is dear that when the assessee came to fi....
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....ted. In view of the above, there is no need to decide other contentions raised by Learned Counsel for the Assessee. 9. In the result, appeal of assessee is allowed." 7.6 Further we also find force in argument of Ld counsel for the assessee that language of section 143(2) of the Act in so far as it uses the phrase "if considers it necessary or expedient" presupposes application of mind on part of Ld AO before notice u/s 143(2) of the Act is issued which words have been explained by Hon'ble Apex court in case of Bhikubhai Patel vs State of Gujarat (4 SCC 144) relevant extract of which is reproduced above where it is observed by Hon'ble Apex court that "...The expression: so considered necessary is again of crucial importance. The term consider means to think over; it connotes that there should be active application of the mind. In other words the term consider postulates consideration of all the relevant aspects of the matter. A plain reading of the relevant provision suggests that the State Government may publish the modifications only after consideration that such modifications have become necessary. The word necessary means indispensable, requisite; indispensably requisite, use....