2017 (11) TMI 1977 - AT - Income Tax

Validity of assessment framed u/s 143(3) r.w.s. 153C - assessee has submitted that the search was conducted on 6.2.2012 and in pursuant to the search the AO issued a Notice u/s 153C for the AY 2012-13 which is not valid as this assessment year is the current year in which the search itself was carried out - HELD THAT - Undisputedly when the search was carried out on 6.3.2012 then the provisions of Section 153C are not applicable for the assessment year under consideration i.e. 2012-13 therefore, the assessment framed in question for the assessment year under consideration will be treated only u/s 143(3) and mere mention of section 153C in the assessment order will not render the assessment invalid or void ab-initio. It is apparent that this is a case of only a mistake of mentioning the assessment framed under Section 143(3) r.w.s 153C and no other material or procedural defect either pointed out or found on the record to suggest that the Assessing Officer has not followed the procedure for framing the assessment u/s 143(3). Hence, this ground raised by the assessee is devoid of any merit and accordingly we dismiss the Ground No.1 of the additional ground. Validity of Notice issued u/s 142(1) - as contended that when the assessee has already filed the return of income on 26.9.2012 then the Notice issued by the Assessing Officer under Section 142(1) on 12.9.2013 is not valid - HELD THAT - We are of the view that even if the assessee filed the return of income on 26.9.2012 and the AO has subsequently issued a Notice under Section 142(1), the same will not effect the validity of the assessment in question framed u/s 143(3) of the Act. Accordingly, we do not find any merit or substance in additional ground No.2 and the same is dismissed. Validity of assessment due to the reason that the Notice issued u/s 143(2) on 21.10.2013 is beyond the limitation provided under law and consequently the assessment framed on the basis of the said time barred Notice - We find that the assessee filed its return of income by efiling on 26.9.2012. This fact of e-filing of return has not been disputed by the AO and it is also matter of record as a copy of the said return has been now filed by the Assessing Officer along with the record. There is no dispute that the return of income was filed by the assessee under Section 139 of the Act and it was not filed in response to the Notice under Section 142(1). The assessee only intimated the Assessing Officer vide its letter dt.8.10.2013 that he has also filed its return of income and a copy of which was also filed before the Assessing Officer. The fact of filing the return of income by the assessee on 26.9.2012 is not in dispute and therefore, the limitation for issuing the Notice under Section 143(2) would expire by six months from 31.3.2013 which would be on 30.9.2013. Notice issued under Section 143(2) was beyond the period of limitation then consequent assessment is not valid and liable to be quashed. - Appeal of assessee allowed.

Summary

Issues Involved:
1. Validity of assessment framed under Section 143(3) r.w.s. 153C of the Income Tax Act, 1961.
2. Validity of Notice issued under Section 142(1).
3. Validity of assessment due to Notice issued under Section 143(2) beyond the limitation period.

Detailed Analysis:

1. Validity of assessment framed under Section 143(3) r.w.s. 153C:
The first objection raised by the assessee concerns the validity of the assessment framed under Section 143(3) read with Section 153C of the Income Tax Act, 1961. The assessee contended that the search was conducted on 6.2.2012, and the Assessing Officer issued a Notice under Section 153C for the Assessment Year 2012-13, which is invalid because the assessment year is the same as the year in which the search was conducted. The Departmental Representative agreed that Section 153C does not apply for the assessment year under consideration, but argued that the mention of this Section in the order is merely a mistake covered under Section 292BB of the Act. The Tribunal found that since the search was conducted in the relevant previous year, Section 153C does not apply for the Assessment Year 2012-13. However, the mere mention of Section 153C does not render the assessment invalid as it was framed under Section 143(3) without any procedural defects. Therefore, this ground raised by the assessee was dismissed.

2. Validity of Notice issued under Section 142(1):
The second ground raised by the assessee was the invalidity of the Notice issued under Section 142(1). The assessee argued that since the return of income was already filed on 26.9.2012, the Notice issued on 12.9.2013 is invalid. The Departmental Representative contended that the return was filed electronically, and the Notice under Section 142(1) was rightly issued. The Tribunal concluded that even if the return was filed on 26.9.2012, the subsequent Notice under Section 142(1) does not affect the validity of the assessment framed under Section 143(3). Therefore, this ground also lacked merit and was dismissed.

3. Validity of assessment due to Notice issued under Section 143(2) beyond the limitation period:
The third ground concerned the validity of the assessment due to the Notice issued under Section 143(2) on 21.10.2013, which the assessee claimed was beyond the limitation period. The Departmental Representative argued that the limitation should be reckoned from 8.10.2013, when the assessee intimated the filing of the return. The Tribunal found that the return was filed electronically on 26.9.2012, and the limitation for issuing the Notice under Section 143(2) expired six months from 31.3.2013, i.e., on 30.9.2013. Therefore, the Notice issued on 21.10.2013 was beyond the limitation period, rendering the assessment invalid. The Tribunal cited the Delhi Special Bench decision in Rajkumar Chawla & Others Vs. ITO, which held that no assessment can be made if the Notice under Section 143(2) is invalid due to being issued beyond the limitation period. Consequently, the assessment framed was quashed as bad in law for want of jurisdiction.

Conclusion:
Since the assessment was quashed due to the invalid Notice under Section 143(2), the Tribunal did not address the other grounds raised by the assessee. The appeal of the assessee was allowed, and the order was pronounced in the open court on 21st Nov., 2017.