2023 (6) TMI 774

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.... hearing before me, Mr.V.Srikanth, learned counsel for the petitioner has restricted the arguments only to the veracity or otherwise of notice under Section 143(2) of the Act. 3. According to him, and he is right in this, a notice under Section 143(2) of the Act is a condition precedent to pass an order of assessment under the provisions of Section 143(3). In this case, such a notice has been issued. According to the petitioner however, the notice under Section 143(2) dated 09.08.2018 is inadequate as it merely states that the issue of 'share capital/capital' has been identified for examination. An opportunity was afforded under that notice to the petitioner to produce evidence to support the return of income filed. 4. Reliance is....

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....doubtedly, a notice under Section 143(2) is a condition precedent for framing of an income tax assessment and in the present case, such notice has been issued. 8. Following the procedure that is routinely in place, the selection of the return of income filed by the petitioner for assessment year (AY) 2017-18 is computer aided and the selection itself is for limited scrutiny. This means that the issues from the returns are limited and identified in number as opposed to a general scrutiny where the entire return of income is open for verification. In the present case, such issue constitutes share capital/capital. 9. The officer has rightly issued notice under Section 143(2) in the format normally utilised for this purpose and at paragraph 1....

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....ppellate authority except in the case of a resident applicant. The issue raised in writ petition was whether the question raised by that petitioner was pending before the income tax authority and it was for this purpose that the notice under Section 143(2) was pressed into service. 12. The Bench observed that the notice under Section 143(2) in that case was in general terms and did not indicate anywhere, the specific issue picked up for scrutiny by that assessing authority. They incidentally state that that notice had failed to state specifically the defects noted by the officer in the return of income, such as claim of loss, exemption, deduction, allowance or relief as mandated by Section 143(2)(i) of the Act. Thus, the identity of the is....

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.... mere fact that such a notice was issued prior to the filing of the application by the Petitioner before the AAR will not constitute a bar, in terms of clause (i) to proviso to Section 245R(2) of the Act, on the AAR entertaining and allowing the applications.' 14. The observations and conclusions as above would not lead to a general principle that a notice under Section 143(2) which is couched in general terms would lose veracity under the Act and would compromise the fate of an assessment that follows. They must be seen in the context of the issue that arose for decision before the Delhi High Court, being the applicability of the bar under Section 245R(2) of the Act. In light of the discussion as above, I am of the categoric view that....