TaxTMI 
TaxTMI 
2023 (3) TMI 977
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....10/- by way of filing all the confirmation alongwith the copy of the ITR and statement of accounts of P. Mahalingam (HUF) for the year under assessment, as per the requirement of section 68 of the Income Tax Act 1961, which has not been controverted or ever doubted by the Assessing Officer. 2. That the additions of Rs.51,02,370/- in the income of the appellant appears to be based only upon the mere presumption and guess work of the Assessing officer as contained in the Para-3 of the assessment order, as he has not collected or ever placed any information or material which could doubt about the receipt / credit of Rs.51,02,370/-, from P. Mahalingam (HUF), the Assessing Officer has further not exercised his power u/s 131 of the Income Tax Act 1961 prior to doubt and hold about the receipt/credit of Rs.51,02,370/- as unexplained income of the appellant, which the Ld. CIT(A) has also failed to appreciate and adjudicate in the appellate order passed on 13.11.2019. 3. That the further addition made of Rs.97,840/- as contained in Para-4 of the assessment order was further not correct under the law and to the facts of the case, because the Assessing Officer and Ld.CIT(A) ....
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....llant only on the basis of his presumption & guess work and not on the basis of any material either collected or placed upon records prior to doubting its creditworthiness and genuineness thereof which the Ld.CIT(A) has also failed to appreciate. 9. That the addition of Rs.66,32,210/- in the income of the appellant is further unconstitutional as laconic and ironic in nature as having no locus standi under the law because the appellant has already filed and placed upon records the confirmations about its creditworthiness and genuineness thereof alongwith the copy of ITR and financial statements for the Assessment Year 2014-15 of P. Mahalingam (HUF) as contained u/s 68 of the Income Tax Act 1961 which has not been controverted either by the Assessing Officer or by the Ld.CIT(A). 10. That the Assessing Officer has further not exercised his powers contained u/s 131 of the Income Tax Act 1961 prior to doubt and hold the receipt / credit of Rs.66,32,210/- as unexplained income of the appellant, which charged to tax against the law and to the facts of the case. 11. That no proper and reasonable opportunity, if any, has since been afforded prior proceeded to comp....
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....l grounds of appeal read as follows: - 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 Sec. 143(2) of the Income Tax Act, therefore, such assessment is void ab initio and liable to be quashed. 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 Act is invalid and void-ab-initio for want of valid notice u/s 143(2) as per law as evident form fact that when return in response to notice was admittedly filed on 26.10.2015, the notice u/s 143(2) is issued on very same day i.e. 26.10.2015 which shows non application of mind in issuing notice u/s 143(2) and therefore assuming jurisdiction to frame assessment on the basis of such a notice is not tenable in law and therefore impugned proceedings need be quashed." 3. Brief facts of the case are that a search and seizure operation u/s 132 of the Income Tax Act (Act for short) was carried out on Santosh/Km/VMI group and its promoters by the Investigation Wing. The assessee filed return declaring income of Rs.32,25,160/- in....
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....(2) of the Act, further assuming jurisdiction to frame assessment based on such notice is not tenable under law. 9. In the identical circumstances, in the case of assessee's son Shri Santosh Mahalingam in ITA No. 283/Del/2020 vide order dated 03.08.2022 the coordinate bench of the Tribunal has held as under: - "11. On careful consideration of the rival submissions and perusing the material available on record, first of all from the copies of the notice u/s 143(2) of the Act dated 29.09.2015, notice u/s 143(2) of the Act dated 29.09.2015 and copy of letter of assessee dated 26.10.2015 [assessee's Paper Book pages 9 & 10], it is clear that at the time of issuing first notice u/s 143(2) of the Act and asking the assessee to file return of income by notice u/s 143(2) of the Act both dated 29.09.2015, the AO was not having copy of the return of income as he himself asked the assessee to file return of income in prescribed form enclosing a blank copy of return of income form. Further, from the copy of letter dated 26.10.2015, it is also clear that the assessee did not file copy of return of income for AY 2014-15 before the AO but only file acknowledgement of the filing of ret....
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....ed the reasons recorded (without approval) to assessee (as placed in paper book before us) which were objected before the AO in detailed manner vide objection letter dated 27.04.2016 in which note worthy aspect is assessee specifically sought from AO copies of back material referred in reasons including investigation wing report/ letter, seized documents etc referred therein, AO without confronting any back material as evident from objection disposal order dated 17.05.2016 rejected assessee's objection challenging reopening action. In various letters placed in paper book and referred in written submission before us, it was specifically asked to AO during assessment proceedings to confront the back material as referred in reasons recorded namely in letters dated 07/06/2016, 20/10/2016 which request of assessee has not been adverted to by the AO is patent from objection disposal order dated 17/05/2016 and further notices dated 09/08/2016 u/s 142(1) and show cause notice dated 13/10/2016. In none of these notices as placed in paper book, we could find the back material being confronted to assessee as specifically requested by assessee. We note here that the Tribunal in various decisio....
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....as under: " Quote Additional ground of Appeal "That impugned assessment order passed by Ld. Asses sing officer u/s 147/143(3) of the Act is invalid and void ab initio for want of valid notice u/s 143(2) as per law as evident from fact that when return in response to notice u/s 148 was admittedly filed on 27/04/2016 notice u/sl43(2) is issued on very same day that is 27/04/2016 which shows non application of mind in issuing notice u/s 143(2) and thereafter in framing the assessment and accordingly all proceedings are nullity'' 7.2 We note that the aforesaid additional ground in identical facts is accepted and assessment u/s 143(3) of the Act was quashed by the ITAT and Hon'ble High Court, are mentioned herein below: i) Hon'ble Delhi ITAT in case of Micron Enterprises Pvt. Ltd. Vs.ITO in I.T.A .No. 901/DEL/2016 (A.Y .2006-07) order dated 14/05/2018 ii) Hon'ble Delhi ITAT in Harsh Bhatia case ITA Nos. 1262/& 1263/DEL/2017 [A.Ys. 2008-09 & 2009- 10] Order dated 17.10.2017 iii) Hon'ble Delhi High Court in the case of Director of Income Tax Vs. Society for Worldwide Inter Bank Financial, Telecommunications in ITA No. 441/2010....
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....eturn submitted u/s 148 of the Act vide order sheet entry dated 27/04/2016, (copy of return u/s 148 letter dated 27.04.2016 and notice u/s 143(2) dated 27/04/2016 are at pages 5&6 with additional ground application), in view of Jurisdictional Delhi High Court decision in case of Society for worldwide reported at 323 ITR 249 followed in identical set of facts by Delhi ITAT in case of Micron Enterprises Pvt Ltd vs ITO in ITA 901/Del/2016 dated 14/05/2018 (copies enclosed in additional ground application at pages 12 to 24) and in view of no contrary jurisdictional High Court decision, we request that extant orders of AO and Ld CIT(A) may be quashed on this short count itself. The logic behind this proposition is patent non application of mind and undue haste on part of AO in issuing notice at same time when return u/s 143(2) of the Act is filed as admitted in order itself, which is sine qua non u/s 143(2) of the Act which uses the phrase "if considers it necessary or expedient", and on expression "considers it necessary" we draw our kind attention to Hon'ble Apex Court decision in case of Bhikubhai Patel vs State of Gujarat (4 SCC 144) relevant extract of which is reproduced below for....
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....areful consideration of the entire conspectus of the case, as per Hon'ble Supreme court ruling in case of National Thermal Power Corporation Ltd Vs CIT [(1998) 229 ITR 383 SC)[, we admit the additional ground raised above by the assessee being purely legal in nature on basis of material on records. Once the decks are clear from admission of purely legal additional ground , we now turn our attention to the adjudication of the same which should not detain us for long in view of Delhi ITAT decision in case of Micron Enterprises Pvt. Ltd. (supra) which has decided the identical issue in favour of assessee by relying on Hon'ble Delhi High Court in the case Society for Worldwide Inter Bank Financial, Telecommunications supra. We are reproducing the reasoning from ITAT decision in case of Micron Enterprises Pvt. Ltd. (supra) on which no contrary decision is brought to our attention: "Learned Counsel for the Assessee submitted that assessee filed reply to the notice under section 148 of the I.T. Act on dated 26.11.2013 which is noted in the assessment order, copy of which, is filed at page-11 of the paper book, in which, assessee explained that the return already filed under secti....
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....pursuance of a notice under section 143(2) issued on 23rd March, 2000 when the return was filed on 27th March, 2000 is invalid." 6. He has submitted that the same order have been followed by ITAT, Delhi Bench, in the case of Shri Harsh Bhatia, New Delhi vs. ITO, Ward-50(3), New Delhi in ITA.No.1262 and 1263/Del./2017 dated 17.10.2017 in which the Tribunal held as under : 10. "It was further argued by the Id. counsel for the assessee Dr. Rakesh Gupta that notice u/ s 143(2) of the Act, was issued on 17.09.2014 and which is the same date on which return was filed. This is apparent from the Assessing Officer's order in para 3 at page 1. Therefore, the Assessing Officer has not applied his mind independently while issuing notice u/s 148 of the Act. On this count also, the assessment deserves to be quashed. Accordingly, under the facts and circumstances of the case, the legal grounds of the assessee are allowed. " 7. On the other hand, Ld. D.R. submitted that assessee did not file return under section 148 within the specified period. Therefore, this ground of appeal of assessee may be dismissed. 8. After considering the rival submissions, I am of the view that the issue is covered in fa....