TaxTMI 
TaxTMI 
2025 (12) TMI 675
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....t Departments. It is the allegation of the A.O. that as per information, during the course of assessment proceedings of M/s Vrindavan International Trade Private Limited, it was established that the company did not do any genuine business but had provided bogus accommodation entry in the form of sale and purchase of fabrics. During the year, the company (Vrindavan) has made sale to assessee i.e. M/s Mahalaxmi Light House which is held to be bogus purchase for the Appellant. Further, on perusal of the record of the assessee, it was seen that it has made purchase of Rs. 4,19,54,395/-during the year which includes bogus purchase from Vrindavan International Trade Private Limited for Rs. 41,82,341/-. In addition to this, as per 26AS, the gross total income is Rs. 14,60,45,404/- whereas as per ITR, the gross total income is 11,62,66,741/-. Hence, the assessee has declared short income of Rs. 2,97,78, 663/- for the year. On perusal of the Form-3CD it is found that the assessee is in the business of contractor and hence transactions for sale and purchase of fabrics are bogus transactions and not related to the business of the assessee. Hence, there is confirmed escapement of income to the....
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.... Ld. AO, NFAC has grossly erred on facts and in law in completing the reassessment proceedings u/s. 147/144/144B of the Act, 1961 without issuing mandatory notice u/s. 143(2) of the Act, 1961, and hence order of the reassessment passed u/s. 147/144/144B of the Act is unsustainable in law." 5. Since, the Assessee has challenged the assessment order in the Cross Objection on the ground of non-issuance of mandatory notice u/s. 143(2) of the Income Tax Act, 1961 ('Act' for short), we have heard on the Cross Objection filed by the Assessee. 6. The Ld. Counsel for the Assessee addressing on Cross Objection, submitted that, without issuing the mandatory notice u/s. 143(2) of the Act, A.O. framed the assessment u/s. 147 r.w. Section 144 r.w. Section 144B of the Act, which is in violation of provisions of law, therefore, it renders the assessment order erroneous, thus, sought for allowing the Cross Objection and dismissal of the Appeal of the Department. 7. Per contra, the Ld. Departmental Representative submitted that the assessment order has been passed under Section 147 of the Act by following the provisions of law strictly and the additions have been made on the taxable....
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....s demonstrated by the observations made in Principal Commissioner of Income-tax v. Shri Jai Shiv Shankar Traders (P.) Ltd. (2015) 64 taxmann.com 220 (Delhi): "12. The narration of facts as noted above by the court makes it clear that no notice under section 143(2) of the Act was issued to the assessee after December 16, 2010, the date on which the assessee informed the Assessing Officer that the return originally filed should be treated as the return filed pursuant to the notice under section 148 of the Act. 13. In DIT v. Society for Worldwide Interbank Financial Telecommunications [2010] 323 ITR 249 (Delhi), this court invalidated a reassessment proceeding after noting that the notice under section 143(2) of the Act was not issued to the assessee pursuant to the filing of the return. In other words, it was held mandatory to serve the notice under section 143(2) of the Act only after the return filed by the assessee is actually scrutinised by the Assessing Officer. 14. The interplay of sections 143(2) and 148 of the Act formed the subject matter of at least two decisions of the Allahabad High Court in Commissioner Of Income Tax-Ii Lucknow Petitioner v. Ra....
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....f the Act cannot obviate the requirement or complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under section 143(3) of the Act, it is necessary to issue a notice under section 143(2) of the Act and in the absence of a notice under section 143(2) of the Act, the assumption of jurisdiction itself would be invalid." 16. In the same decision in Salarpur Cold Storage (P.) Ltd. (supra), the Allahabad High Court noticed that the decision of the Supreme Court in Hotel Blue Moon (supra) where in relation to block assessment, the Supreme Court held that the requirement to issue notice under Section 143(2) was mandatory. It was not "a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with." 17. The Madras High Court held likewise in Sapthagiri Finance & Investments v. ITO [2012] 25 taxmann.com 341/210 Taxman 78 (Mad.) (Mag.). The facts of that case were that a notice under Section 148 of the Act was issued to the Assessee seeking to reopen the assessment for AY 2000-01. However, the Assessee did not file a return and therefore a notice was iss....