TaxTMI 
TaxTMI 
2023 (8) TMI 147
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....the learned AO/Commissioner of Income-tax (Appeals) has erred in not taking into consideration the number of connection confirmations given by Media companies to the Income Tax department given to the Appellant. 4. Based on the facts and circumstances of the case and in law, the learned AO/Commissioner of Income-tax (Appeals) has erred in taking a standard rate for all the customers while calculating Income which is not a practical scenario. 5. Without prejudice to the above, no proper notice was duly served on the Appellant. Hence, the Appellant was prevented by sufficient cause and opportunity provided was inadequate. 6. Without prejudice to the above, the learned AO erred on facts and in law in levying interest under section 234A, 234B and 234C of the Act. The above "Grounds of Appeal" are all independent and without prejudice to one another. The Appellant also craves leaves to supplement, to cancel, amend, add and/or otherwise alter or modify any or all, grounds of the appeal stated hereinabove." 2. Apart from this, the assessee has raised following additional grounds of appeal:- 1. "That the order passed by The A.O. and ....
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....the submissions made by the assessee were not found acceptable by the Assessing Authority. He therefore, made estimation of profit @ 8% of the total receipts in respect of number of cable connection subscribers. As per the record of the AO, the assessee was having 28,000 cable connections subscribers and monthly subscription fee charged of INR 200/- per connection, the total receipt was taken up at INR 6,72,00,000/- and further 10% of such gross receipt was reduced on account of the fee which was estimated to have not been paid by the customers hence, he computed total receipt at INR 6,04,80,000/-. The gross receipts declared by the assessee in its return of income was further reduced and the receipt which was not disclosed by the assessee was taken at INR 5,45,34,500/- and average profit @ 8% was calculated at INR 43,62,760/- was earned in addition to the profit declared by the assessee. Thus, The AO assessed the income of the assessee at INR 44,66,650/-. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal ex-parte to the assessee and without adverting to the material placed before Ld.CIT(A). ....
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....f the A.O. that proof for service of notice u/s 143 (2) is not there and the A.O. admitted that on 27.12.2010, the assessee has stated that return filed as per provision of section 139(1) of the act may kindly be treated as return filed in response to notice u/s 148 of the Act. It is clearly evident that notice u/s 143(2) was never issued by the A.O. before completion of the Assessment and this fact has categorically been admitted by the A.O. in remand report submitted before the Hon'ble Bench. In these grounds of appeal, assessee has challenged the action of A.O. in completing assessment without issuing notice u/s 143(2), which is sine qua non once assessee furnished return of income. In our case, the case of assessee was reopened by issue of notice u/s 148 of the Act and there after the assessment was completed without issuance of notice u/s 143(2) though the assessee had filed the return of income in response to such notice u/s 148. Further we submit that omission to issue notice u/s 143(2) is not a procedural irregularity and same is not curable. You honours will appreciate that it has nowhere been provided in the Act that A.O. s....
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....com 137 (Page No.- 51-63 of Paper Book Dated 24/02/2022) held that as regards the objection of the revenue to the Tribunal permitting the assessee to raise the point concerning non-issuance of notice under section 143(2) for the first time in the appeal before the Tribunal, in view of the settled legal position that the requirement of issuance of such notice is a jurisdictional one, it does go to the root of the matter as far as the validity of the re-assessment proceedings under section 147/148 is concerned. It raises a question of law as far as the instant cases are concerned, since it is not in dispute that prior to finalization of the re-assessment orders, notice under section 143(2) was not issued by the Assessing Officer to the assessee. With there being no fresh evidence or disputed facts sought to be brought on record, and the issue being purely one of law, the Tribunal was not in error in permitting the assessee to raise such a point before it. This finds support in the decision of the Supreme Court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) and the decision of this court in Gedore Tools (P.) Ltd. v. CIT [1999] 238 ITR 268 (Delhi). ....
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....cepted, you have to file a fresh return or he can say that 30 days' time period being over I will not take cognizance of your request or he has to accept the request of the assessee and treat the earlier return as one filed pursuant to the notice u/s 148 of the IT Act. In the former two scenarios, A.O. has to follow the procedure set out for a best of judgment assessment and cannot make an assessment under section 143(3). On the other hand, if the A.O. chose to accept assessee's request, he can indeed make an assessment under section 143(3). In our case before you, assessment completed under section 143(3) read with section 147. Or in other words A.O. accepted the request of the assessee. This in turn makes it obligatory to issue notice u/s 143(2) after the request by the assessee to treat his earlier return as filed in pursuance to notices u/s 148 of the IT Act was received. This request, in the given case, has been made only on 27.12.2010. Any issue of notice prior to that date cannot be treated as a notice on a return filed by the assessee pursuant to a notice u/s 148 of the Act. Or in other words, there was no valid issue of notice u/s 143(2) of the IT Act, and....
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....the counsel of the assessee received on 04/10/2022 during the hearing before the Hon'ble ITAT SMC Bench. Our reply is as under: - We have stated in our grounds of appeal that A.O. has not issued the notice u/s 143(2) of the Act before completion of the re-assessment proceedings and condonation for the same cannot be given. Moreover, we have stated in our grounds of appeal that the order passed by the A.O. and confirmed by the CIT(A) is illegal and without jurisdiction because the A.O. has not issued notice u/s 143(2) before completion of reassessment proceedings whereas the assessee appeared before the A.O. and informed him that the originally filed should be treated as return filed pursuant to the notice u/s 148. The A.O. stated in his factual report that on 27/12/2010 (just 4 days before expiring of limitation to pass reassessment order) the assessee has stated that the return filed as per the provisions of section 139(1) of the Act, may kindly be treated as return filed in response to Notice u/s 148 of the Act. As per 2nd para of the assessment order at page no-17 of the paper book it was stated in the assessment order that "In the case in....
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...., whereas the appellant had paid entertainment tax only to the extent of 2000 cable connections. The A.O. has initiated reassessment proceedings on the basis of the information and issued notice u/s 148 to the appellant. During the assessment proceedings, appellant has not made proper compliance before the A.O. and declared cable connection fee amounting to Rs. 59,45,500/-. The Entertainment Tax Officer vide order no. 9722-9723 dated 17/12/2002 and levied penalty and taxes amounting to Rs. 2,55,02,400/- for the period April 2001 to March 2002. The appeal filed against the order of Entertainment Tax Officer was dismissed by the Dy. Commissioner (Taxes) vide his order dated 26/7/2005. The appellant failed to furnish the details asked for and failed to produce books of account for verification, the A.O. has rejected them u/s 145(3) of the Act. After considering the facts in the case of the appellant, A.O. has computed the subscription amount @200/- per month per connection for 12 months in respect of 28000 connections at Rs. 6,72,00,000/- and after allowing credit of not payment of subscription fee by customers 10% and receipts shown by the appellant in the return computed total recei....
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....cable connection subscribers. Therefore, in my considered view, the reasons were sufficient for re-opening the assessment. Another ground regarding legality of assessment is that the assessee did not receive notice u/s 143(2) of the Act as no such notice was issued by the Assessing Authority. It is seen that the AO had issued various notices to the assessee when notice u/s 148 of the Act was not complied by the assessee. However, on 27.12.2010, the assessee had requested to treat the return of income filed u/s 139(1) of the Act as in response to section 148 of the Act. Having noted this, the AO proceeded to frame the assessment. However, there was nothing recorded in the assessment order whether any notice u/s 143(2) of the Act was issued to the assessee. The AO submitted a report regarding this ground. The relevant contents of report submitted to the Assessing Authority dated 05.09.2022 are reproduced as under:- 4.1. "For grounds 1,2 & 3: The assessee has stated that the AO has not issued the notice u/s 143(2) of the Act, before the completion of the re-assessment proceedings and the condonation for the same cannot be given u/s 292BB of the Act. In this regard, it is subm....