2019 (12) TMI 1503 - AT - Income Tax

Assessment u/s 153A - HELD THAT - Following the principles laid down in the case MEETA GUTGUTIA 2018 (7) TMI 569 - SC ORDER as no incriminating material has been found in the course of search in the case of the assessee for the assessment years under appeal, the addition as made by the AO is unsustainable. Consequently, the findings of the Ld.CIT(A) on this issue stands confirmed. Appeals filed by the Revenue are dismissed. Intimation u/s.143(1) - only restriction to the raising of the legal ground is that no new or fresh facts should be required to be brought into the proceedings or determined through the proceedings - HELD THAT - In the present case, all the facts are emanating clearly from the assessment order and no new facts have been produced by the assessee nor are being called for determination in the present proceedings. Consequently, the legal ground is liable to be admitted and we do so. A perusal of the provision of Section 142(1) clearly shows that the AO can issue a notice u/s.142(1) calling upon the assessee to file his return of income only when the assessee has not filed his original return of income under the provision of Section 139(1). In the present case, the assessee has filed his original return on 01.10.2015 which is a return u/s.139(1) and the said return has also been processed u/s.143(1) on 02.06.2016. The notice u/s.142(1) issued on 29.06.2016 asking the assessee to file the return of income consequently is an invalid notice and is liable to be quashed and we do so. The assessee having filed a valid return u/s.139(1) on 01.10.2015, the time limit calling for details u/s.143(2) for the purpose of assessment expired on 30.09.2016. The notice u/s.143(2) has been issued only on 09.11.2016 which is far beyond the time stipulated under the statute. Consequently, the said notice u/s.143(2) being barred by limitation is liable to be quashed and we do so. As the notice u/s.143(2) has been quashed, the assessment becomes unsustainable and the same stands quashed.

Summary

Issues involved:
1. Validity of notice u/s.153A for Assessment Year 2011-12.
2. Timeliness of notice u/s.143(2) for Assessment Year 2015-16.

Analysis:

Issue 1: Validity of notice u/s.153A for Assessment Year 2011-12:
The appellant challenged the notice u/s.153A issued for the Assessment Year 2011-12, contending that no incriminating material was found during the requisition u/s.132A. The appellant relied on the Supreme Court's decision in Principal Commissioner of Income Tax vs. Meeta Gutgutia, emphasizing the need for incriminating material for invoking section 153A. The Tribunal agreed, noting that no incriminating material was found for the relevant assessment year. Following the Supreme Court's precedent, the Tribunal held the notice u/s.153A as unsustainable, thereby quashing the assessment for the said year.

Issue 2: Timeliness of notice u/s.143(2) for Assessment Year 2015-16:
The appellant raised a legal ground regarding the timeliness of the notice u/s.143(2) for the Assessment Year 2015-16. The appellant argued that the notice was issued beyond the prescribed time limit, rendering the assessment liable to be annulled. The Tribunal allowed this ground, stating that the notice u/s.142(1) calling for the return was invalid as the original return had been filed within the prescribed time. Additionally, the notice u/s.143(2) was issued after the expiration of the statutory time limit, leading to the quashing of the assessment for the said year.

In conclusion, the Tribunal allowed both appeals of the assessee, emphasizing the importance of adhering to statutory requirements and legal precedents in tax assessments.