TaxTMI 
TaxTMI 
2019 (7) TMI 2036
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....n 148 dated 31.03.2015 Tax Effect : 1,35,59,450 2.1. The learned AO has erred issuing second notice under section 148 dated 31.03.2015 when proceedings initiated by first notice under section 148 dated 18.04.2013 were still pending as on 31.03.2015. On facts and circumstances of the case and law applicable, the said notice is bad in law and liable to be quashed. Consequently, the re-assessment order dated 29.03.2016 is invalid, bad in law and liable to be quashed. 2.2. The learned CIT (A) has erred in concluding that the learned AO had issued a valid notice under section 148 dated 31.03.2015 even after acknowledging the fact that the learned AO had committed a mistake by not dropping the re-assessment proceedings initiated through notice under section 148 dated 18.04.2013. On facts and circumstances of the case and law applicable, the second notice under section 148 dated 31.03.2015 is bad in law and liable to be quashed. Consequently, the re-assessment order dated 29.03.2016 is invalid, bad in law and liable to be quashed. 2.3. The learned CIT (A) has erred in concluding that the action of the learned AO by not dropping the re-assessment proceedings initiated through n....
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....2015 after the expiry of four years from the end of the assessment year. On facts and circumstances of the case and law applicable, the said notice issued and the re-assessment order passed under section 143(3) dated 29.03.2016, after the expiry of four years from the end of the assessment year is contrary to the first proviso to section 147 and thus bad in law and liable to be quashed. 6.2. The learned AO has erred in not appreciating the fact that there is no failure on the part of the assessee to make a return or to disclose full and truly all material facts necessary for his assessment. On facts and circumstances of the case and law applicable, the said notice issued and the re-assessment order passed under section 143(3) dated 29.03.2016, after the expiry of four years from the end of the assessment year is contrary to the first proviso to section 147 and thus bad in law and liable to be quashed. 7. Grounds relating to reasons recorded for issue of notice under section 148 - Tax Effect : 1,35,59,450 7.1 The reassessment order by the learned AO is bad in law as the reasons recorded does not state that there was a failure on the part of the assessee to disclose fully &#....
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....mstances of the case and law applicable, interest under section 234B is not leviable. The appellant denies its liability to pay interest under section 234B. 11. Prayer 11.1. In view of the above and other grounds to be adduced at the time of hearing, the appellant prays that the order passed by the learned CIT (A) be quashed or in the alternative a) Exemption be allowed under section 11 or under section 10(23C) (iiiad) or under section 10(23C) (vi), b) Interest levied under section 234B amounting to Rs. 1,28,98,609 is to be deleted. The appellant prays accordingly." 3. In course of hearing of the appeal, it was submitted by ld. AR of assessee that the original assessment order u/s. 143(3) was passed by the AO on 12.05.2010, copy of which is available on pages 100 and 101 of the paper book. Thereafter, he submitted that first notice u/s. 148 was issued by the AO on 18.04.2013 as per copy available on page 102 of the paper book. He submitted that as per this notice issued by the AO u/s. 148, the AO was required to complete the assessment and in view of the provisions of section 153 of IT Act, the AO had time up to 31.03.2015 to complete the assessment pursuant t....
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.... filing Special Civil Application before Hon'ble Gujarat High Court which was disposed of by Hon'ble Gujarat High Court by an order dated 21.06.2016 and therefore, this judgment of Hon'ble Gujarat High Court is not applicable in the present case. He placed reliance on the judgment of Hon'ble Karnataka High Court rendered in the case of P. Dayananda Pai Vs. ACIT as reported in [2011] 15 taxmann.com 249 (Karnataka), copy available on pages 11 to 24 of the case law compilation filed by ld. DR of revenue. He submitted that when the judgment of Hon'ble Karnataka High Court is available, the same should be followed in preference to the judgment of any other High Court. He also placed reliance on the judgment of Hon'ble Apex Court rendered in the case of Comunidado of Chicalim Vs. ITO as reported in [2000] 113 Taxman 331 (SC), copy available on pages 1 and 2 of the case law compilation filed by ld. DR of revenue. He also placed reliance on one more judgment of Hon'ble Apex Court rendered in the case of Tapan Kumar Datta Vs. CIT as reported in [2018] 92 taxmann.com 367 (SC), copy available on pages 3 to 10 of the case law compilation filed by ld. DR of revenue. The ld. DR of revenu....
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....e Act was issued on 14/12/1992, which was served on the assessee on 24/12/1992. Even prior to the service of notice in the interregnum, the assessee filed his return of income on 22/12/1992, declaring income of Rs. 3 lakhs. In the usual course, within a period of two years i.e., by 31/3/1995, the assessment had to be completed. However, assessment order in the instant case was passed on 27/3/1997 and another notice under Section 148 was issued on 24/11/1994 and a revised return was filed on 31/3/1995. The contention of the counsel for the appellant is that the second notice dated 24/11/94 is barred by limitation since the time limit for the conclusion of the assessment was 31/3/1995 and after that date, since by then, no assessment order had been passed, it must be deemed to have been concluded and hence, the assessment order dated 27/3/1997 is invalid. Before answering the points for consideration, it would be necessary to refer to the documents annexed to the memorandum of appeal. 13. It is seen from the documents annexed, that as per Annexure-B dated 24.10.1992 statement of return of income as disclosed on 31.3.1992 at the time of search under Section 132(4) of the Act i....
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....y, a search was conducted in the premises of the appellant under Section 132 of the Act on 24.2.1992. A declaration of income of Rs. 3.00 lakh was made by the appellant but no return was filed till then. Since there was no return filed by the appellant notice under Section 148 of the Act was issued on 14.2.1992 as per Annexure-C which was served on the assessee on 24.12.1992. Therefore, when the notice under Section 148 of the Act was issued, the assessee had not filed his return of income only on 22.12.1992, the assessee filed his return declaring income of Rs. 3.00 lakh. If the appellant-assessee had filed his return in the usual course that is on or before 30.10.1991, then the assessment would have to be completed by 31.3.1994. But in the present case a return was filed only on 22.12.1992 after issuance of notice under Section 148 of the Act. The said return was therefore, filed subsequent to the issuance of notice dated 14.12.1992. Thereafter, on consideration of the return filed by the assessee on 22.12.1992, notice under Section 148 was issued on 24.11.1994. In response to which, a revised return was filed on 20.10.1995. On the facts of the present case, it becomes ....
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....bjected to by the appellant, but was also responded to by filing a revised return on 20/10/1995. Therefore, the notice dated 24/12/1994 was validly issued after considering the return filed by the appellant on 22/12/1992. Point No. 1 is accordingly answered against the appellant." 8. From above para reproduced from this judgment of Hon'ble Karnataka High Court, we find that in that case, first notice u/s. 148 was issued by the AO on this basis that even after expiry of the time fixed for filing the return of income u/s. 139(1) of IT Act which was 30.10.1991 in that case, no return of income was filed by the assessee and in between, search took place in that case of assessee on 24.02.1992. It is also noted in that case that the assessee in that case declared income of Rs. 3 Lakhs in course of search but there was no return of income filed by the assessee and therefore, notice u/s. 148 was issued on 14.12.1992 which was served on the assessee on 24.12.1992. This is also noted by Hon'ble High Court in that case that even before service of notice on 24.12.1992, the assessee filed return of income on 22.12.1992 declaring income of Rs. 3 Lakhs. In view of these facts....
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....ome of Rs. 3 Lacs was made but no return was filed. This is also a fact of that case that even before service of the first notice on 24.12.1992, the assessee filed return of income on 22.12.1992 declaring an income of Rs. 3 lacs and second notice in that case was issued by the AO for this reason that there is escarpment of income as per the AO as per the return filed on 22.12.1992. As per Para 17 of this judgment as reproduced above, it is categorically stated by Hon'ble Karnataka High Court that this judgment is having regard to peculiar facts of that case. These peculiar facts are these that the first notice was issued in view of non filing of return of income by the assessee even after expiry of time allowed u/s 139 (1) of I T Act and declaration of income of Rs. 3 lacs in course of search. This is also a fact of that case that even before the service of the first notice u/s 148 on 24.12.1992, the assessee had filed return of income on 22.12.1992 and because of these facts, a categorical finding is given by Hon'ble Karnataka High Court in the same Para 17 as reproduced above that notice dated 24/11/1994 is in fact not a "second notice", under Section 148 of th....
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....t rendered in the case of Tapan Kumar Datta Vs. CIT (supra). This judgment is not in respect of any notice u/s. 148 but this judgment is in respect of notice issued by the AO u/s. 158BD r.w.s. 158BC of IT Act. As per the facts of that case, it is noted by Hon'ble Apex Court that assessee was a partner in partnership firm by name "Nityakali Rice Mill" and on 06.11.1998, a search was conducted at the business premises of the firm by the department and several documents/books including a sum of Rs. 34 Lakhs were seized. It is also noted by Hon'ble Apex Court that on 09.09.1999, a notice was issued to the assessee by the AO u/s. 158BC of the IT Act. On the same date, a notice was issued by the AO to the said partnership firm also u/s. 158BC of the IT Act. On 20.11.2000, Block assessment order was passed by the AO in the case of the firm and in the same, it was held that in the case of the firm, Nil income reported by the firm should be accepted and this was also directed to initiate proceedings against the Appellant for the assessment of undisclosed income for the block period. Pursuant to the order dated 20.11.2000 passed by the AO in the case of the firm, a fresh notice u/s. 158....
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.... before Hon'ble Gujarat High Court and in this, the assessee challenged the validity of the fresh notice issued by the AO u/s. 148. Paras 17 and 18 of this judgment are relevant in respect of decision of Hon'ble Gujarat High Court on this aspect of the matter i.e. validity of the second notice issued by the AO u/s. 148 and therefore, these two paras from this judgment are reproduced hereinbelow. "17. When therefore in the present case the first notice of reopening of assessment was not withdrawn, there was no scope, nor permissible in law to issue fresh notice of reopening. Counsel for the Revenue, however, vehemently contended that such withdrawal of notice of reopening must be deduced from facts and attendant circumstances. His contention was that the Revenue had, all along, intended to withdraw the notice and the fact, that such notice was abandoned, was sufficient to establish withdrawal thereof. We, however, hold a slightly different belief. A notice of reopening which is once issued would remain in operation unless it is specifically withdrawn, quashed or gets time barred. First instance would be at the volition of the Assessing Officer as the person who had issued the noti....