TaxTMI 
TaxTMI 
2026 (6) TMI 1032
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....pite of the fact that the AO/NaFAC has not issued jurisdictional notice under section 143(2) of the Act, as the Appellant has filed his return of income. The ld. CIT(A) ought to have held that the assessment made is without jurisdiction and bad in law and void abinitio. 3. The ld. CIT(A) erred is sustaining the validity of initiation of proceedings by issuing notice u/s. 148 of the Act by the Jurisdictional Assessing Officer, contrary to the circular issued by CBDT in violation of the provisions of section 151A of the Act. 4. Without prejudice, the Id. CIT(A) erred in sustaining the addition made by the AO of Rs. 54,01,000 as unexplained cash u/s. 69A of the Act. 5. The authorities below failed to appreciate that the sources for the cash deposits are out of appellants business income from manufacturing of gunny bags. 6. Any other ground that may be urged at the time of hearing." 2. Succinctly stated, the AO based on the information that the assessee during the subject year had made substantial cash deposits of Rs. 54,01,200/- in his bank account maintained with M/s. Renukamata Multistate Co-operative Urban Credit Society Limited, initiated pro....
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....days. The Ld. AR submitted that that since the reason for the delay in filing of the present appeal is not attributable to the assessee, as well as there is no negligence act on the part of the assessee, the delay may be condoned. On the other hand, the Ld. Sr-DR did not seriously object to the seeking of the condonation of delay. 8. We have given thoughtful consideration and are of firm conviction that, as the delay in filing of the present appeal had crept in for reasons beyond the control of the assessee, i.e., due to the change in the counsel for the assessee, merits to be condoned. Our aforesaid view is supported by the recent decision of the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal vs. The Income Tax Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31st January, 2025. The Hon'ble Apex Court, while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of the delay of 166 days by the Income-Tax Appellate Tribunal, Raipur Bench, had observed that a justice-oriented and liberal approach should be adopted while considering the application filed....
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....is return of income in compliance to the notice issued under section 148 of the Act, dated 27/03/2023, within the prescribed time period. 11. Per contra, Dr. Sachin Kumar, Learned Senior Departmental Representative (for short, "Ld. Sr-DR"). The Ld. Sr-DR relied upon the orders of the authorities below. It was 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 further on his contention, the Ld. Sr-DR submitted that as the "third proviso" to section 148 of the Act has been made available on the statute vide Finance Act, 2022, w.e.f., 01/04/2022, as per which a return of income filed beyond the prescribed time period allowed under section 148 of the Act shall not be deemed to be a return of income under section 139 of the Act, the AO had rightly refrained from considering the delayed return of income filed by the assessee on 11/10/2023 and framed the assessment vide his order passed under section 147 r.w.s 144 r.w.s 144B of the Act, dated 17/01/2024. 12. We have thoug....
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....iled on 21.10.2021, i.e during the pendency of the assessment proceedings which had thereafter culminated vide order passed under Section 147 r.w.s 144B of the Act, dated 30/03/2022, 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 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 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 "retu....
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....o a return of income filed under section 139 of the Act, therefore, the AO to ensure that the assessee had not under stated the income disclosed by him in the return of income filed in response to notice under section 148 of the Act remains under a statutory obligation to issue a notice under section 143(2) of the Act, i.e., in a similar manner as if he would have done in response to a return 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 s....
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....lature in all is wisdom had specifically provided that the return of income filed in response to notice under section 148 of the Act is to be treated as a return of income under section 139 of the Act, which, thus, would entail issuance of a notice under section 143(2) of the Act for framing of the assessment in the hands of the assessee. 24. Our aforesaid view that a notice under section 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 re....
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....equired an explanation, then he ought to have followed up by issuing notice under section 143(2) of the Act. Also, we find that the Hon'ble High Court of Delhi in the case of PCIT v. Dart Infrabuild Pvt. Ltd. (2024) 460 ITR 532 (Delhi)(HC) had observed that the issuance of notice under section 143(2) of the Act is mandatory for framing of an assessment. Also, the Hon'ble High Court of Allahabad 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, i....
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....thus cannot be sustained and is liable to be struck down for want of valid assumption of jurisdiction on his part. 28. As we have quashed the assessment for want of a valid assumption of jurisdiction by the AO, we refrain from adverting to and adjudicating the other grounds based on which the impugned assessment order has been assailed before us, which, thus, are left open. 29. Resultantly, the appeal filed by the assessee company is allowed in terms of our aforesaid observations." 14. In our view, as the facts and the issue involved in the present appeal remain the same as were involved in the aforesaid order of the Tribunal in ITA No. 1311/hyd/2025, dated 07/01/2026, we respectfully follow the same. 15. Before parting, we may herein observe that though it is the Ld. DR's claim before us that as the "3rd proviso" to section 148 of the Act has been made available on the statute vide Finance Act, 2022, w.e.f., 01/04/2022, as per which a return of income filed beyond the prescribed time period allowed under section 148 of the Act shall not be deemed to be a return of income under section 139 of the Act, the AO had rightly refrained from considering the delayed....