TaxTMI 
TaxTMI 
2025 (9) TMI 1739
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....e assessment completed without issuing a draft assessment order in terms of S.144C(1) of the Act is null and void. 3. The learned Commissioner of Income Tax (Appeals) ought to have held that the assessment completed u/s 144 of the Act without issue of notice u/s 143(2) of the Act is null and void. 4. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.65,50,000 made by the assessing office u/s 69A of the Act by considering the cash deposits as unexplained money. 5. The learned Commissioner of Income Tax (Appeals) ought to have held that the assessing officer is not justified in levying tax at increased rate of 60% u/s 155BBE of the Act and levying surcharge @25% in as much as the amended provisions of s. 115BBE are applicable only from A.Y. 2018-19 onwards. 6. Any other grounds that may be urged at the time of appeal hearing. 3. Succinctly stated, the AO based on the information gathered from the web portal of AIMS data that the assessee during the demonetization period, i.e. from 09.11.2016 to 30.12.2016, had though deposited a sum of Rs. 10,49,000/- in his bank account No. 154702000000158 with I....
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....M/s NNR Kalyana Mandapam (supra) were deposited by him in his personal bank account. Further, the AO was of the view that the return of income (declaring loss) of M/s NNR Kalyana Mandapam (supra) for the A.Y. 2017-18 that was filed on 31.03.2019 was an invalid return as it was filed beyond the stipulated time period. Also, the AO observed that the assessee ought to have filed his return of income in compliance to the notice issued u/s 142(1) of the Act, dated 15.03.2018 on or before 31.03.2018. The AO, further observed that though the notice u/s 142(1) of the Act dated 15.03.2018 was issued to the assessee, directing him to file his return of income on or before 31.03.2018, but it was only when the department had started probing into the details of the sources of the cash deposits made in his bank account during the demonetization period that he had filed the return of income for the subject year on 31.03.2019, and also came forth with the submission that the said cash deposits were sourced out of the collections of M/s NNR Kalyana Mandapam. The AO, holding a firm conviction that the explanation of the assessee about the source of the cash deposits in his bank account was the brain....
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....Rao bearing PAN: AAKFN3998G for AY 2017-18 filed on 31.03.2019. But it is found that this is invalid return as it was filed beyond the time limit. Even the Individual return of the assessee was also filed belatedly and not within the time frame. The assessee was issued notice u/s. 142(1) of IT Act on 15.03.2018 requesting him to file his return on or before 31.03.2018. But the return is filed only on 31.03.2019 . It is pertinent to mention that only after department has started probing in to the details of sources for deposit of cash in bank accounts, during demonetization period, the appellant has filed return of income for the A.Y. 2017-18 on 31.03.2019. Thus it is apparent that issue of notice from the department only triggered the assessee to file return belatedly which is invalid return. Therefore, the argument of the AO that this action on the part of the assessee is clearly an afterthought with an intention to avoid the consequences for not disclosing the sources for cash credits, has merit. 6. The submission of the appellant has been considered. As regards the reason for not filing the return of both the Firm and the appellant in time, it is submitted as under: ....
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....im had drawn our attention to the copy of the "return of income" that was filed by the assessee on 31.03.2019 (e-filing acknowledgment no. 459601620310319) pursuant to the notice issued by the A.O. u/s 142(1) of the Act, dated 15.03.2018, Page 4 of APB. 13. Per Contra, the Ld. DR, submitted that as the assessee had failed to file his return of income in compliance to the notice issued by the A.O. u/s 142(1) of the Act, dated 15.03.2018 within the prescribed period provided in the said notice, i.e., on or before 31.03.2018, Page 1 of APB, therefore, the return of income that was filed by him on 31.03.2019 was beyond the prescribed time limit and, thus, was not a valid return of income. The Ld. DR, submitted that as the assessee had failed to file his return of income in compliance to the notice issued u/s 142(1) of the Act, dated 15.03.2018 within the prescribed period i.e., on or before 31.03.2018, therefore, the A.O. by not taking cognizance of the said return of income had rightly not issued notice u/s 143(2) of the Act. The Ld. D.R., on being queried by the Bench that, now when it is a matter of fact borne from the record that the assessee had filed his return of income pursu....
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....on that merely for the reason that the assessee had delayed the filing of his "return of income" in compliance to the notice u/s. 142(1) of the Act, dated 15.03.2018, and had filed the same on 31.03.2019, i.e. after the lapse of the prescribed period allowed in the aforesaid notice, the same could by no means form a basis for treating the said "return of income" as invalid. Our aforesaid conviction is fortified by the fact that in case of a delay involved in filing the "return of income" in compliance to the notice under Section 142(1) of the Act, i.e. furnishing of the same after the period allowed in the notice, the assessee is visited with the levy of interest for the delayed period u/s. 234A of the Act. On a bare perusal of Section 234A(1) of the Act, it transpires that though the said statutory provision contemplates that the delay involved in the filing of a "return of income" in response to the notice under Section 142(1), i.e. furnished after the period allowed in the notice is to be subjected to levy of interest, but the same nowhere provides that the "return of income" so filed is to be held as invalid. Our aforesaid view is fortified by an analogy that can safely be draw....
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....ide order passed under Section 144 of the Act, dated 21.12.2019, therefore, we are of a firm conviction that there was no justification for the A.O. to have held the said "return of income" as invalid and non-est in the eyes of law. Also, support is drawn from the judgment of the Hon'ble High Court of Patna in the case of CIT Vs. Nagendra Prasad, (2023) 156 Taxmann.com 191 (Patna). The Hon'ble High Court, had observed that where the notice was used by the A.O. u/s 148 requiring the assessee to file his return of income within thirty days but the said return was filed after eight and a half months, since the return was filed by assessee in response to the said notice, though delayed, there should have been a notice issued under Section 143(2) as the requirement to issue notice could not be dispensed with. Also, we find that the issue involved in the present appeal, i.e., as to whether or not the A.O. could have dispensed with the statutory obligation cast upon him to issue notice u/s 143(2) of the Act, for the reason that the assessee had delayed the filing of the return of income in compliance to the notice issued u/s 142(1) of the Act is squarely covered by the order of th....
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....nn.com 4 (Del). Also, the Hon'ble High Court of Allahabad in the case of CIT Vs. Salarpur Cold Storage (P) Ltd. (2015) 228 Taxman 48 (Allahabad) had after relying upon the judgment of the Hon'ble Apex Court in the case of CIT Vs. Hotel Blue Moon (supra), held that the requirement of issuance of notice u/s.143(2) of the Act was mandatory and cannot be brought within the meaning of a procedural irregularity. The Hon'ble High Court of Madras in the case of Sapthagiri Finance & Investments Vs. ITO, (2012) 25 taxmann.com 341 (Mad), has held that where the A.O found that there was a problem in the "return of income" filed by the assessee u/s.148 of the Act, which required an explanation, then he ought to have followed up by a notice u/s. 143(2) of the Act. The Hon'ble High Court of Delhi in the case of Pr. CIT Vs. S.G Portfolio (P) Ltd. (2023) 454 ITR 761 (Del.) has, inter alia, held that where the assessee has filed a "return of income" in response to notice u/s. 148 of the Act, the A.O. was required to issue notice u/s. 143(2) of the Act for framing the assessment. We further find that Hon'ble High Court of Madras in the case of Amec Foster Wheeler Iberia SLU-India ....