TaxTMI 
TaxTMI 
2020 (1) TMI 1733
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....hout prejudice, the whole proceedings started by issuing notice u/s 148 dated 27-03-2015 is itself bad in law, void, ab initio and illegal and liable to be quashed. 3. That, the proceeding under 148 is itself bad in law and void in absence of any notice u/s 143(2) as not issued after the return of income buy the Appellant on 05-01-2016 and therefore, the proceeding is bad in law and void. 4. That, further the proceeding u/s 148 is bad in law and void since there is no such approval on record as per sec. 151 of the Income Tax Act." 3. When the matter was called for hearing, the learned AR for the assessee referred to the reasons recorded and challenged the validity of assumption of jurisdiction under s. 147 of the Act. The learned AR for the assessee submitted that the AO has wrongfully usurped jurisdiction under s. 147 of the Act contrary to the mandate of law for as many as three reasons; (i) the reasons recorded do not meet the requirement of law under s. 147 of the Act, (ii) the approval given by the superior authority under s. 151 of the Act is without any date and therefore it is not known whether such approval has been obtained after the issuance of notic....
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....essee has not furnished any reply till date. In view of the above facts, I have reason to believe that income chargeable to tax is escaped assessment to the extent of Rs. 15,05,500/- as stated above. Hence, notice u/s 148 is required to be issued in this case for A.Y. 2008-09." 7. On a reading of the reasons recorded, it is noticed that the assessee had deposited Rs. 15,05,500/- in cash in saving account for which no trail is available. The assessee has simultaneously not filed return of income. Therefore, the AO, in our view, rightly formed reason to believe that chargeable income has escaped income in the absence of return of income. The belief appears to be held in good faith based upon reasonable grounds and cannot be reckoned to be a mere pretense. The conditions did exist for reopening the assessment based on such grounds. As per the Section 147 of the Act, what is required is reason to believe but not the established fact of escapement of income. At the stage of issue of notice, the only question relevant would be, whether there was a relevant material on which a reasonable person could have formed the requisite belief. Whether material would conclusively prove t....
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.... to frame the re-assessment order under s. 143(3) r.w.s. 147 of the Act. In this regard, we find no reference to the issuance of such notice under s. 143(2) of the Act in the re-assessment order. We also notice that CIT(A) has requisitioned the assessment records and has come to a categorical finding that no such notice under s. 143(2) of the Act has been issued. The Revenue could not bring anything to contradict the allegation of non issuance of notice. It will be appropriate to reproduce the relevant finding of the first appellate authority in this regard: "4.2. I have considered the facts of the case and submission made by the appellant. It has been noticed that in this case notice u/s. 148 of the I.T. Act have been issued on 18.3.2014 to file the return of income and incompliance thereto the appellant vide his reply in Tapal on 24.4.2014 has stated that the original return filed by him on 17.12.2009 vide acknowledgement No. 0024600236 may be treated as return filed in compliance to the notice issued u/s. 148 of the T.T. Act. He also enclosed a copy of the acknowledgment of the original return of income filed. The appellant has objected the reassessment completed by the....
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....invalid. - The Hon'ble ITAT Delhi in the case of ITO Vs. M7s. Staunch Marketing Pvt. Ltd. in ITA No. l643/Del/2008 dtd. 12.5.2015 has held that for completing the assessment u/s.148 the compliance of the procedure laid down u/s.143(2) is mandatory. If there is failure on the part of the A.O. for not complying with the procedure laid down in Section 143(2) then the reassessment is not sustainable in the eyes of law and deserves to be cancelled. - The Hon'ble ITAT, Agra Bench in the case of ITO Vs. Alligarh Auto Centre 152 ITJ (Agra) 767 has also held the similar views. - The Hon'ble ITAT Mumbai Bench in the case of Sanjeev R. Arora Vs. ACIT in IT(SSA) No. l03/MUM/2004 dtd. 25.7.2012 has also held as under:- "We are of the view that the reassessments made for the assessment years under consideration have become invalid for not having served the mandatory notice u/s. 143(2) of IT. Act on the assessee" - The Hon'ble Madras High Court in the case of C1T Vs. C. Pakniappan 284 ITR 257 has also held that the reopening of assessment of assessee u/s. 147 and completion of assessment without issue of notice u/s. 143(2) within 12 mon....
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....ly the assessment order passed in pursuance thereto was also cancelled. - The Hon'ble ITAT Bangalore in the case of Shri G.N. Mohana Raju Vs. ITO in ITA No. 242 and 243/Bang/2013 dated November, 2014 has also held that in absence of issuance of issue of valid notice u/s. 143(2) of I.T. Act the assessment renders it invalid and the ITAT quashed the reassessment. - The Hon'ble Gujarat High Court in the case of CIT Vs. K.M. Ravji in Tax Appeal No. 771/2012 dtd. 18.7.2011. - The Hon'ble Gujarat High Court in the case of CIT Vs. Panorama Builders Pvt. Ltd. in Tax Appeal No. 435/20ll dtd. 30.8.2012. In view of the aforesaid discussion, the ground of appeal is allowed." 7. In view of the decision of the Hon'ble Gujarat High Court in the case of Sukhini P. Modi (supra) and other hosts of judgments, the legal challenge that re-assessment order which is subject matter of appeal as void ab initio is well settled. In the absence of notice under s. 143(2) of the Act issued to assessee, the re-assessment order passed under s. 144 r.w.s. 147 of the Act dated 26.03.2015 in question is rightly held to be without authority of law and consequen....