TaxTMI 
TaxTMI 
2023 (5) TMI 1179
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....sessing Officer erred in passing the impugned reassessment order without issuing a valid notice u/s 143(2) of the Act. 2. The Appellant prays that reassessment order passed without following the mandatory requirement of 143(2) of the Act is void and bad in law. The Appellant craves leaves to add to, alter, amend or delete the additional ground of appeal." 3. Since, the issue raised by way of additional ground is a legal issue, which can be decided on the basis of material available on record, we are of the view that the same can be admitted for consideration and adjudication in view of the ratio laid down by the Hon'ble Supreme Court in NTPC Ltd vs CIT: 229 ITR 383. 4. The dispute raised by the assessee, by way of the aforesaid additional ground, is that the assessment in the present case has been concluded without issuing a valid statutory notice under section 143(2) of the Act. Since this is a jurisdictional issue, therefore, we deem it appropriate to deal with this jurisdictional aspect first and if necessary thereafter, to deal with the other issues raised in the present cross-appeal. 5. The brief facts of the case pertaining to this issue are: The assessee is a company ....
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....In support of his submission, the learned DR placed reliance upon the decision of the coordinate bench of the Tribunal in Sanjaykumar Ramkishan Mantri (HUF) vs ACIT, in ITA No. 1591/PN/2012. 8. We have considered the rival submissions and perused the material available on record. In the present case, consequent to the survey action under section 133A of the Act, reassessment proceedings under section 147 of the Act were initiated and notice under section 148 of the Act was issued on 24/11/2010. It is undisputed that during the reassessment proceedings, the AO issued a notice under section 143(2) of the Act on 20/02/2011, and thereafter, upon transfer of the case, fresh notice under section 143(2) of the Act was issued on 17/10/2011. Since the issue in dispute is pertaining to the validity of notice issued under section 143(2) of the Act, therefore, before proceeding further, it is pertinent to analyse the provisions of section 143(2) of the Act, as it stood at the relevant time, which reads as under:- "(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,- (i) where he has reason ....
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....or has computed excessive loss or under-paid the taxes in any manner. Hence the first notice issued under section 143(2) of the Act in the present case is a mere empty formality, without any legal consequence, and therefore, cannot be treated as a notice on a return filed by the assessee. We find that the Hon'ble Delhi High Court in DIT v/s Society for Worldwide Interbank Financial, Telecommunications, [2011] 9 taxmann.com 142 (Delhi) held that the provisions of section 143(2) make it clear that the notice can only be served after the AO has examined the return filed by the assessee. Thus, in view of the above, the first notice issued under section 143(2) is not a valid notice as per the provisions of the Act. 11. Further, since the return of income was filed by the assessee on 31/03/2011, therefore, the time limit for issuance of notice under section 143(2) of the Act, as per proviso to clause (ii), was available only till 30/09/2011. However, the second notice under section 143(2) of the Act was issued on 17/10/2011, i.e. beyond the time limit prescribed under the provisions of section 143(2) of the Act. Therefore, the second notice is also invalid as per the provisions of secti....
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....filed by the assessee is invalid and nonest and hence, no requirement to issue notice under section 143(2) of the Act." (emphasis supplied) 13. From the above findings of the coordinate bench, it is evident that since the taxpayer has filed the return at the fag-end of the assessment proceedings, such return of income was treated as invalid and non-est. The coordinate bench of the Tribunal, however, noted that the return of income which was filed beyond the time allowed under the Act or even within the reasonable time could have been accepted. In order to test this argument of the learned DR, it is relevant to examine the provisions of section 148 of the Act, as it stood at the relevant time, which reads as under:- "148. (1) Before making the assessment, reassessment or re-computation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner ....
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.... under section 143(2) of the Act. The relevant findings of the coordinate bench, in this regard, are as under:- "22. We are in agreement with the proposition raised by the Ld. Authorized Representative for the assessee that in case return of income is validly filed in response to notice under section 148, the requirement of the Act is to issue notice under section 143(2) of the Act. But all the acts have to be done within the time frame provided under the Act or at best within reasonable time....." 16. Therefore, even by applying the decision relied upon by the learned DR, the return of income filed by the assessee is a valid return, and thus the requirement of issuance of valid notice under section 143(2) of the Act cannot be dispensed with. Before concluding, it is pertinent to note that the legislature vide Finance Act, 2023 has inserted a third proviso to section 148 w.e.f. 01/04/2023, which now specifically provides that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under section 139 of the Act. However, during the year under consideration, such a provision was not ....