TaxTMI 
TaxTMI 
2025 (9) TMI 1776
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....dated order for the sake of convenience and brevity. First, we take-up appeal ITA.No. 786/Hyd/ 2024 in the case of Gangaram Reddy Tekulapalli and both the parties are agreed to that the decision taken in this appeal be applicable in appeal ITA. No. 787/Hyd/2024. ITA. No. 786/Hyd./2024 - A.Y. 2014-2015 : 2. Facts of the case, in brief, are that the assessee is an individual and a non-resident Indian. As per the information available with the Department, the assessee and his wife sold immovable properties i.e., agricultural land admeasuring ac.0.05 gts and ac.0.12 gts in Survey No.297/EE situated at Puppalguda (v), Rajendranagar (M), Ranga Reddy District, for a total consideration of Rs. 29,50,000/- and Rs. 75,00,000/-. Since the assessee failed to disclose any income from capital gains on sale of the above mentioned properties, the assessment was reopened u/sec.147 of the Act by the Assessing Officer and notice u/sec.148 of the Act was issued and served upon the assessee on 26.03.2021. Since, there were no response from the side of the assessee, the Assessing Officer issued statutory notice u/sec.142(1) of the Act on 08.03.2022 calling the assessee to furnish his explanation. ....
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....al Assessment Order dated 02.11.2023 passedu/sec. 147 r.w.s. 144C(13) of the Act. 5. Aggrieved by the Final Assessment order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) and the learned CIT(A) dismissed the appeal of the assessee vide order dated 26.06.2024 on the ground that, against the directions of DRP the appeal lies with the Income Tax Appellate Tribunal and he lacks jurisdiction. Accordingly, the learned CIT(A) dismissed the appeal of the assessee in limine. 6. Aggrieved by the order of the learned CIT(A), the assessee has filed before the Tribunal. The ITAT, Hyderabad Benches, Hyderabad vide it's order dated 11.02.2015 in ITA.Nos.786 & 787/Hyd./2024 has disposed of the appeal filed by the assessee's and rejected the contentions of the assessee's. Thereafter, the assessee has filed Miscellaneous Application u/sec.254(2) of the Income Tax Act, 1961 against the Order of the Tribunal dated 11.02.2015 and the Tribunal vide it's order dated 19.05.2025 in M.A.Nos.16 & 17/Hyd./2025 has recalled the order of the Tribunal dated 11.02.2025 passed in ITA. Nos. 786 & 787/Hyd./2024 qua grounds nos.6 and 7 of assessee's appeals for re....
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....he Act for issuance of notice and in a faceless manner to the extent provided in section 144B of the Act. Since, notice issued under section 148 of the Act by the jurisdictional Assessing Officer i.e., Income Tax Officer, International Taxation-2, Hyderabad, which is contrary to the provisions of section 151A of the Act and Notification issued by the CBDT is illegal, void abinitio and liable to be quashed. In this regard, he relied upon the decision of Hon'ble High Court of Telangana in the case of S. Venkata Ramana Reddy Patloola vs., DCIT, Circle-1(1), Hyderabad in Writ Petition Nos.13353, 16141 and 16877 of 2024 Judgment dated 24.07.2024. 8. Learned Counsel for the Assessee further referring to ground no.7 of the assessee's appeal submitted that, the Assessing Officer has failed to issue notice u/sec.143(2) of the Act before completion of the assessment, which render the assessment order illegal, void abinitio and liable to be quashed. Learned Counsel for the Assessee referring to the decision of ITAT, Hyderabad A-Bench, Hyderabad in the case of Jahangir Syed, Hyderabad vs., ITO, Ward-8(2), Hyderabad in ITA.No.646/Hyd./2023 dated 30.06.2025 submitted that, once an assesse....
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....ed under the said notice, then, the question of issuance of notice u/sec.143(2) of the Act does not arise. In this regard, he relied upon decision of Hon'ble High Court of Jammu and Kashmir in the case of Pr. CIT vs., Broadway Shoe Company in ITA.No.10/2017, Order dated 11.10.2019. Learned Counsel for the Assessee further referring to third proviso to section 148 of the Act submitted that, any return of income required to be furnished by an assessee under this section and furnished beyond the period allowed in the said notice, shall not be deemed to be a return under section 139 of the Act. Once the return of income is not furnished within the time allowed under the notice issued under section 148 of the Act, then, issuance of notice under section u/sec.143(2) of the Act is not required because, as per sec.143(2) of the Act, where return has been furnished under section 139, or in response to notice under subsection (1) of section 142, the Assessing Officer, if, considers it necessary or expedient to ensure 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 requiri....
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....ted 13.08.2020 and 06.09.2021, the Faceless Assessment of income in respect of cases assigned to Central Charges or International Tax Charges are, excluded from the Scheme of Faceless Assessment. In other words, before issue of Notification dated 29.03.2022, issue of notice u/sec.148 or assessment of income of an assessee assessable under international tax charges is not mandated through Faceless Assessment Scheme. Only upon issue of Notification dated 29.03.2022, it was mandatory to issue notice u/sec.148 of the Act through Automated Allocation in accordance with Risk Management Strategy Formulated by the Board as referred to in sec.148 for issue of notice in a Faceless manner to the extent provided u/sec.144B of the Act. In the present case, admittedly, notice u/sec.148 of the Act was issued on 26.03.2021 by the Income Tax Officer, International Taxation-2, Hyderabad i.e., jurisdictional Assessing Officer and the assessment has also been completed without following the Faceless Assessment Procedure. Since the notice u/sec.148 has been issued prior to notification of Faceless Assessment Scheme vide notification dated 29.03.2022, in our considered view, the arguments advanced by th....
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....be issued only in a case, where a return has been furnished under section 139 or in response to notice under section 142(1) of the Act. Further, third proviso to section 148 of the Act, deals with return of income and as per the said proviso, any return of income required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return filed under section 139 of the Act. On a conjoint reading of section 143(2) r.w.s.148 of the Act and third proviso provided therein, the requirement of issuance of notice u/sec.143(2) of the Act arise only in a case where the return of income has been furnished under section 139 of the Act or within the due date provided in the notice issued under section 148 of the Act or notice issued under section 142(1) of the Act. 13. In the present case, although, the assessee has not furnished return of income on or before the due date provided under section 139 or even due date provided in notice issued under section 148 of the Act, but, the assessee has furnished a return, in response to notice issued under section 142(1) and furnished a return of income on 07.09.2022. Further, the Assessing Offi....
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.... contention that as the assessee had delayed the filing of his return of income in compliance to the notice issued under Section 148 of the Act, dated 27.03.2019 i.e. filed the same beyond the prescribed period of 30 days on 11.12.2019, therefore, the A.O. had rightly refrained from issuing notice u/s 143(2) of the Act, and had framed the assessment vide his order passed under Section 143(3) r.w.s. 147 of the Act, dated 31.12.2019. 15. It is a matter of fact borne from the record that the assessee pursuant to the notice u/s 148 of the Act, dated 27.03.2019, had filed his "return of income" beyond the prescribed period of 30 days i.e. on 11.12.2019. Admittedly, the A.O. not only in his order passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019 specifically mentioned that the assessee had filed his return of income for the subject year, but also had, inter alia, while quantifying the assessed income considered the "income from other sources" of Rs.3,47,921/- that was declared by the assessee in the said return of income. We are of the firm conviction, that merely for the reason that the assessee had delayed the filing of his "return of income" in compliance to the notic....
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....ial question of law. "Whether the return filed by the assessee beyond the period stipulated u/s 139(1)/139(4) or Section 142(1)/148 can be held as non-est in the eyes of law and has invalidated for the purpose of deciding exemption u/s 80P of the Income Tax Act, 1961 ?" The Hon'ble High Court answered the aforesaid issue, and held, that the "return of income" filed by the assessee beyond the period stipulated under Section 139(1) or Section 139(4) or Section 142(1) or Section 148 can also be accepted and acted upon provided further proceedings in relation to such assessment are pending in the statutory hierarchy of adjudication in terms of the provisions of the Income-tax Act. As in the present case before us, the "return of income" filed by the assessee in compliance to the notice issued under Section 148 of the Act, dated 27.03.2019 was filed on 11.12.2019, i.e during the pendency of the assessment proceedings which had thereafter culminated vide order passed under Section 143(3) r.w.s 147 of the Act, dated 31.12.2019, therefore, we are of the firm conviction that there was no justification for the A.O. to have held the said "return of income" as invalid and....
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.... income of the assessee and made additions in his hands remained under an obligation to have issued notice under Section 143(2) of the Act. 17. We shall now deal with the second facet of the controversy involved in the present appeal, i.e. as to whether or not the assessment framed by the A.O. vide his order passed 143(3) r.w.s. 147 of the Act, dated 31.12.2019, in the absence of a notice u/s. 143(2) of the Act having been issued by him is sustainable in the eyes of law? 18. Apropos the validity of the assessment framed by the A.O. vide his order passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019, wherein he despite taking cognizance of the "return of income" filed by the assessee on 11.12.2019 in response to the notice issued under Section 148 of the Act, dated 27.03.2019 (which has been held by us hereinabove to be a valid return of income), had by treating the said "return of income" as invalid, dispensed with the statutory requirement of issuing a notice u/s 143(2) of the Act and framed the assessment vide his order passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019, we find that the said issue is covered by the judgments of the Hon'ble Supre....
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....urisdiction for reopening and also the reference to the TPO were to be quashed. 20. Apropos the Ld. DR's claim that as the assessee in the course of the proceedings before the A.O had not objected to the assumption of the jurisdiction by him, and on the contrary participated in the assessment proceedings, therefore, the non-issuance of the notice u/s 143(2) of the Act will be saved by the provisions of Section 292BB of the Act, we are unable to concur with the same. We say so, for the reason that the deeming provisions of the said statutory provision only cure the infirmities in the manner of service of notice and is not intended to cure the complete absence of notice itself. Our aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Laxman Das Khandelwal (2019) 417 ITR 325 (SC). The Hon'ble Apex Court relying on its earlier order in the case of ACIT Vs. Hotel Blue Moon (supra), has held that the failure to issue a notice under Section 143(2) renders the assessment order void even if the assessee had participated in the proceedings. 21. We thus, based on our aforesaid deliberations conclude as under: (a). the "retu....