TaxTMI 
TaxTMI 
2026 (4) TMI 558
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....suant to the revisionary order under section 263 of the Act, which is considered mandatory. This decision was based on the judgment of the Honourable Supreme Court of India in Hotel Blue Moon (TS-113-SC-2010-O), resulting in the quashing of the assessment order. ii. The learned assessing officer has raised following grounds of appeal:- 1. The learned CIT(A) has erred in holding that the assessment order passed under section 143(3) read with section 263 of the Income Tax Act, 1961, is invalid merely on the ground that a notice under section 143(2) was not issued after the set-aside proceedings, without appreciating that the original assessment had already been preceded by a valid notice under section 143(2). 2. The Learned CIT(A) has erred in relying upon the decision of the Hon'ble Supreme Court in the case of ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC), which is not applicable to the facts of the present case. The said decision pertains to block assessments under Chapter XIV-B and not to reassessment or set-aside proceedings u/s 263. 3. The learned CIT(A) has failed to appreciate that in the case of set-aside assessments u/s 263, there is no r....
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....ch 2019 directed the learned assessing Officer to pass assessment bringing to tax the annual value of capital 1MG Mall as house property income after giving opportunity to the assessee company. ix. In pursuance to that, the learned assessing officer issued notice to the assessee of granting opportunity on 18 December 2019, the assessee submitted and submission on 21 December 2019 and after considering the submission the assessment was completed wherein the learned assessing officer computed the gross annual value of 1MG Mall at Rs. 100,251,881 instead of the gross annual value offered in the return of income at Rs. 81,994,392. x. Thus the assessment was completed at the total income of Rs. 131,358,751 against the original income as per assessment order dated 6 December 2016 pursuant to the order of the learned CIT - A dated 30 June 2017 determined at Rs. 30,425,242/-. The assessment order was passed under section 143 (3) read with section 263 of the income tax act on 20 December 2019. xi. This assessment order was challenged before the learned CIT - A by the assessee wherein assessee raised one ground of appeal (1) that the learned AO erred in passing an order under sectio....
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....sed by the AO was not valid and therefore he allowed the ground No. 1 of the appeal and quashed the assessment order. He held that since assessment order passed under section 143 (3) read with section 263 is treated as invalid, he did not adjudicate on any other grounds. xiv. Despite notice none appeared on behalf of assessee. Therefore the issue is decided on the merits of the case as per information available on record. xv. The learned Joint Commissioner Of Income Tax Shri N Balusamy, senior departmental representative, vehemently submitted that there is no requirement of issuing notice under section 143 (3) of the act where the assessment is passed in pursuance of the revisionary order under section 263 of The Income Tax Act passed by The Principal Commissioner Of Income Tax. He submitted that in plain reading of the provisions of the law, there is no such requirement. He further stated that it is not the case that the now the return of assessee is being questioned. It is only the direction of the learned CIT is given effect to. He referred to the provisions of section 143 (2) of the act and submitted that when the assessing officer would like to tinker with the return of ....
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....graph No. 7 of that the judgement of Honourable supreme court to state that the only issue before the Honourable supreme court was whether service of notice on the assessee under section 143 (2) within the prescribed period of time is a prerequisite for framing the block assessment under Chapter XIVB of The Income Tax Act 1961 or not. The Honourable Supreme Court answered that that it is mandatory. Therefore the reliance by the learned CIT - A on that decision to hold that same applies in case of order passed in pursuance of revisionary orders under section 263 of the act is invalid and order deserves to be set aside. xviii. He further stated that that assessee cited decision of the Honourable Bombay High Court in case of 115 taxmann.com 25 one (Bombay) in case of CIT versus Sodder builder and developers private limited dated 16 July 2019 which was also in respect of the assessment to be made under section 158BC of the act. In that case also the assessment of search was made by without issuing a notice under section 143 (2) of the act. He further stated that the assessee also filed return of income under section 158BC of the act which was required to be assessed. Therefore the f....
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....he act dated the 29 December 2019 assessing the income of the appellant at Rs. 131,358,751 by making the several adjustment to the income from house property by bringing the annual value of that property to tax under the head income from house property. xxiv. The assessee aggrieved with that order preferred an appeal before the learned CIT - A contesting that no notice under section 143 (2) of the act was served on the appellant and therefore the assessment order is invalid, deserves to be quashed. The learned CIT - A quashed the same holding that the learned assessing officer should have issued a notice under section 143 (2) of the act before passing an assessment order under section 143 (3) of the act pursuance to direction of revisionary order under section 263 of the act. he relied up on the decision of Assistant Commissioner of Income Tax and Another vs. Hotel Blue Moon (2010) 3 SCC 259. xxv. The issue at hand concerns whether, following a revisionary order under Section 263 of the Income Tax Act, it is mandatory for the assessing officer to issue a notice under Section 143(2) prior to passing an assessment order pursuant to Section 143(3) read with Section 263. It is un....
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....ome Tax under Section 143(3) of the Act. xxix. Section 143(2) empowers the Assessing Officer to issue a notice to the assessee when it is deemed necessary or expedient to verify that income has not been understated, losses have not been overstated, or taxes have not been underpaid. In such cases, the officer may require the assessee to produce evidence supporting their return. Therefore, notice u/s 143(2) is necessary. During search proceedings, the Assessing Officer may encounter situations where the assessee files a fresh return of income in response to a notice issued under section 158BC, 153A, or 153C of the Act, regardless of any original return previously filed under section 139. xxx. When the Principal Commissioner of Income Tax issues an order under Section 263 of the Act, the assessee neither submits a new return of income nor is required to do so. Consequently, whether the order pertains to the cancellation or modification of the assessment, Section 143(2) does not obligate the Assessing Officer to issue a fresh notice when acting upon a revisionary order passed under Section 263 by the Principal Commissioner of Income Tax. xxxi. Furthermore, the order issued by ....