AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 121
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.... on the following grounds of appeal: 1. The Order of the learned Commissioner of Income Tax (A), NFAC is not correct either on facts or in law and in both. 2. The Learned CIT(A), NFAC erred in upholding the action of the Assessing Officer in treating the return filed on 13.12.2021 as non-est though it was a valid return filed in response to notice under Section 148 and in the absence of a valid notice under Section 143(2) the assessment order is null and void. 3. a) The notice under section 148 for A.Y. 2013-14, though digitally signed on 31.03.2021, was actually issued through the ITBA portal only on 01.04.2021, and having been issued after 31.03.2021 under the old law instead of the amended provisions of section 148 read with section 148A, the notice issued U/s 148 dated 31.03.2021 is invalid and renders the reassessment proceedings void ab initio. b) Since the notice was served after 01.04.2021 it is deemed to fall under the amended regime which mandates compliance with Section 148A and sanction under the new Section 151 and in the absence of such compliance the notice is invalid and the reassessment proceedings are void. 4. The reass....
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.... legal issues based on the facts borne on record, therefore, the same be admitted. 3. We have given thought consideration and are of the view that as the assessee by raising the aforementioned additional grounds of appeal (forming part of the original grounds of appeal), i.e., ground Nos. 2, 3, 4 & 5 has sought our indulgence for adjudicating a legal issue, which requires looking no further beyond the facts available on record, therefore, we have no hesitation in admitting the same. Our aforesaid view is fortified by the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC). 4. Succinctly stated, the AO based on the information gathered in the course of the assessment proceedings in the case of the assessee for AY 2012-13, observed that she during the year under consideration along with her father and sister had though sold certain immovable properties along with GPA holder on 14/03/2013 vide Document No.1528/2013 registered with SRO, Renigunta for a consideration of Rs. 60,50,000/-, but had not filed her return of income for the subject year, initiated proceedings under section 147 of the Act. Notice unde....
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....espective documents. However, the AO held a conviction that the claim of the assessee that the matter was under litigation between the General Power of Attorney (GPA) holders and herself, her sister & her father did not carry any substance as the same had no relevance to the income tax proceedings. The AO held a conviction that, as the transfer transaction of the subject immovable property had taken place, the capital gains arising therefrom was liable to be brought to tax as per the provisions of the Act. 8. The AO based on his aforesaid deliberations, taking cognizance of the fact that the subject property was inherited by the assessee along with her other family members, thus, as per the provisions of section 49(1) of the Act determined the "cost of acquisition" of the subject property, i.e., the cost at which the same was acquired by the previous owner long period ago i.e., @ Rs. 75/- as per the sale deed document No.921/1946, dated 20/04/1946, and thus, determined the "indexed cost of acquisition" at Rs. 100/-. Accordingly, the AO worked out the longterm capital gains (LTCG) on the transfer of the subject property in the hands of the assessee at Rs. 20,16,567/-. The AO, vid....
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....Act was being dispensed with. 13. Per contra, Shri D. Praveen, Learned Senior Departmental Representative (for short, "Ld. Sr-DR") submitted that as the assessee had failed to file the return of income within the prescribed period contemplated under section 148 of the Act, the AO has rightly held the said return of income as non-est and refrained from taking cognizance of the same. Elaborating on his contention, the Ld. Sr-DR submitted that the view taken by the AO was correct, as in case an assessee would file a return of income on a day before the framing of the assessment, i.e., at the brink of the framing of the assessment, then, it will be impossible for the AO to take cognizance of the same. Accordingly, the Ld. Sr-DR relied upon the orders of the authorities below. 14. We have thoughtfully considered the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the authorities below. 15. As observed herein above, the controversy involved in the present appeal is double facet, viz., (i) that as to whether or not a return of income filed in response to the notice issued by the AO under section 148 of the Act, dated....
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.... 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 issued 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. Accordingly, based on our aforesaid observations, we are of the view that the "return of income" filed by the assessee company on 21.10.2021 i.e., in response to the notice u/s. 148 of the Act dated 27.03.2021, though delayed, did not cease to be a "return of income" in the eyes of the law. 20. We shall now deal with the core issue involved in the present appeal, i.e., whether the AO, in response to the return of income filed by the assessee company for the subject year, i.e., AY 2014-15, on 21/10/2021, in compliance to the notice issued under section 148 of the Act, before proceeding with and framing the impugned assessment was stat....
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....of income furnished under section 139 or under section 142(1) of the Act. 21. Although the Ld. CIT-DR had tried to impress upon us that for framing of assessment under section 148 of the Act, there is no obligation cast upon the AO to issue a notice under section 143(2) of the Act, but we are unable to concur with the same. We say so, for two reasons, viz., (i) as observed by us herein above, the return of income filed by the assessee in response to notice under section 148 of the Act is to be construed as if it is a return of income filed under section 139 of the Act; and (ii) that section 148 of the Act though provides for a notice to be issued to the assessee calling upon him to file his return of income, but the machinery for framing of the assessment is not provided in the said section and for the said limited purpose the return of income so filed by the assessee is to be construed as a return of income filed under section 139 of the Act, and, thus, for framing of the assessment pursuant to the return of income filed by the assessee in response to the notice under section 148 of the Act notice under section 143(2) of the Act is mandatorily required to be issued. ....
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....tion 143(2) is mandatorily required to be issue where the assessee has filed a return of income in response to notice under section 148 of the Act is supported by the judgment of the Hon'ble High Court Allahabad in the case of Commissioner of Income Tax (CIT) v. Rajeev Sharma (2011) 336 ITR 678 (All). It was observed that, where the return of income is filed by the assessee in response to notice under section 148 of the Act, the AO, before proceeding to decide the controversy with regard to the escaped assessment, is mandatorily required to issue notice under section 143(2) of the Act. Also, a similar view had been taken by the Hon'ble High Court of Madras in the case of CIT v. M. Chellappan (2006) 281 ITR 444 (Madras). The Hon'ble High Court had observed that where the assessee had filed a return of income in response to notice under section 148 of the Act, but no notice under section 143(2) was issued after filing of the said return of income, then, the same is a violation of the mandatory provisions of law, and therefore, the re-assessment order passed under section 147 of the Act was a nullity and was to be quashed. Also, we find that the Hon'ble High Court of Rajasthan in the ....
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....d in the case of CIT vs. Salarpur Cold Storage, [2015] 228 Taxman 48 (Allahabad) after relying upon the judgment of the Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon (2010) 321 ITR 362 (SC), held that the requirement of issuance of a notice under section 143(2) is mandatory and cannot be brought within the meaning of a procedural irregularity. Apart from that, we find that the "Special Bench" of the ITAT, Delhi in the case of Raj Kumar Chawla vs. ITO (2005) 1 SOT 934 (Delhi) (SB), had held that return of income filed pursuant to notice under section 148 of the Act must assume and treated to be a return of income filed under section 139 of the Act and the assessment must thereafter be made under section 143 or 144 of the Act after complying with the mandatory provisions. Also, it was observed that pursuant to the return of income filed by the assessee in response to notice under section 148 of the Act, it is incumbent upon the assessing authority to issue notice under section 143(2) of the Act within the prescribed time period. 25. Considering the aforesaid host of judicial pronouncements, wherein it has been held that pursuant to a return of income filed by....
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....9. Resultantly, the appeal filed by the assessee company is allowed in terms of our aforesaid observations." 16. In our view, as the facts and the issue involved in the present appeal remains the same as those involved in the aforesaid order of the Tribunal in ITA No. 1311/hyd/2025, dated 07/01/2026; or in fact stands on a better footing, as the AO in the present case while framing the assessment had at Page-2/Para-2 of his order specifically observed that the issuance of notice under section 143(2) of the Act was being dispensed with as the assessee had failed to file the return of income in compliance to the notice issued under section 148 of the Act, dated 31/03/2021, therefore, we respectfully follow the same. Accordingly, based on our aforesaid observations, we concur with the AR that the AO had grossly erred in law and facts of the case in assuming jurisdiction and framing the assessment vide his order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 31/03/2021 without considering the return of income filed by the assessee on 13/12/2021, and issuing a notice under section 143(2) of the Act. 17. We thus, in terms of our aforesaid observations, quash the as....