TaxTMI 
TaxTMI 
2025 (8) TMI 1718
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....or scrutiny and statutory notice U/s. 142(1) of the Act was issued on 09/03/2018 through email. In response to the notice, the assessee has failed to comply by filing the return of income for the AY 2017-18. Thereafter, on 20/07/2019 the assessee filed its return of income in response to notice issued U/s. 142(1) of the Act dated 18/07/2019. The Ld. AO did not consider the return of income. However, based on the bank account statement, Form-26AS, the Ld. AO treated an amount of Rs. 73,60,62,875/- as unaccounted income of the assessee-firm while estimating the profit percentage @ 8% on the entire income amounting to Rs. 5,88,85,030/ -. Thus, the Ld. AO determined the total income of the assessee at Rs. 5,88,85,030/- and passed the assessment order U/s. 144 of the Act, dated 18/12/2019. On being aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). 3. Before the Ld. CIT(A), the assessee responded to the various notices issued by the Ld. CIT(A). After examining the submissions made by the assessee, the Ld. CIT(A) in accordance with the provisions of section 251(1)(a) of the Act remitted the matter back to the file of the Ld. AO for fresh adjudica....
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....mitted that the Ld. AO has not considered the return of income filed by the assessee which was also intimated to the Ld. AO while submitting the response on 13/09/2019 as evident from the Screenshot available on Paper Book Page No. 64. He further argued that the Ld. AO has erred in concluding the assessment U/s. 144 of the Act without issuing notice U/s. 143(2) of the Act. On this issue, the Ld. AR relied on the decision of the Coordinate Bench of ITAT, Rajkot in ITA No. 115/RJT/2025 (AY: 2017-18), dated 21/05/2025 in the case of Haresh J Rathod vs. ITO. Further, the Ld. AR also placed reliance on the decision of the jurisdictional Bench in the case of Baanavatu Tulasi vs. ITO in ITA No. 451/Viz/2024 (AY: 2015-16), dated 07/03/2025. He therefore pleaded that since the assessment order was framed without issuing notice U/s. 143(2) of the Act, it is null and void- ab-initio and cannot be enforced. 5. Per contra, the Learned Departmental Representative (in short "Ld. DR") submitted that the assessee has not placed on record the return of income filed by the assessee on 20/07/2019 before the Ld. AO. In this situation, the Ld. CIT(A) remitted the matter back to the file of the Ld. AO....
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....ing on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,- (i) advance tax, if any, paid; (ii) any tax deducted or collected at source; (iia) any relief of tax allowed under section 89; (iii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iv) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section; (v) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (vi) any tax credit allowed to be set off in accordance with the provisions of section 115JAA or section 115JD. Explanation 1. - In this section, "due date" means the date specified in sub- section (1) of section 139 as applicable in the case of the assessee. Explanation 2. - In this sub-se....
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....ure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished." The Assessing Officer is mandated to serve on the assessee a notice requiring him to furnish any evidence on which the assessee may rely in support of the return of income. However, in the instant case, the Ld. AO has not issued notice U/s. 143(2) of the Act and has also not taken cognizance of the return of income filed in response to the notice U/s. 142(1) of the Act. The provisions of section 143(2) clearly stipulate the legal necessity of compliance of issue of notice U/s. 143(2) of the Act to complete the assessment U/s. 143(3) of the Act. At this juncture, we find it relevant to ext....
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....Tulasi vs. ITO in ITA No. 451/Viz/2024 (supra) has decided the identical issue and the relevant paras are extracted as under: "10. In the instant case, the Ld. AO has not issued notice U/s. 143(2) of the Act and has not considered the return of income filed in response to notice U/s. 142(1) of the Act. The above provisions of section 143(2) clearly stipulate the legal necessity of issuance of notice U/s. 143(2) of the Act to complete the assessment. It is an accepted legal proposition that where the return of income has been filed in response to notice U/s. 148 of the Act, the provisions of the Act shall apply as if such return was a return required to be furnished U/s. 139 of the Act. In the instant case, the Ld. AO did not consider the return of income filed by the assessee on 23/09/2021 stating that the return filed by the assessee is beyond the stipulated time frame of 30 days as specified in the notice U/s. 148 of the Act for filing the return of income. In our opinion, the return of income even though filed belatedly would still qualify as return furnished U/s. 139 of the Act and should be taken on record by the Ld. AO. In the instant case, the Ld. AO in his order ha....