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2018 (5) TMI 847 - AT - Income TaxReassessment u/s 147 - Assessee contended that, AO had not issued notices sec. 143(2) and sec. 142(1) - another appeal against Revision u/s 263 - Held that - The very auditor had been continuing to represent the assessee s right from reassessment to section 263 proceedings as well as the consequential assessment framed on 26.07.2014. We take note of the assessee s reply filed before the CIT as well defending the above assessment to have been completed after calling necessary books, bills, vouchers as well as supporting documents for examination as produced at its behest followed by notice / summons issued u/s. 133(6) and 131 of the Act; respectively. We are of the view in these facts that the assessee could not have placed on record the required documents within any notice at all before section 133(6)/131 process. The assessee s instant substantive ground therefore appears to be as well worded one wherein it has sought to reiterate the CIT s observation only that the AO had not issued the said statutory notice(s) before completing the assessment in question. We conclude in view of these facts that the CIT s said observation is against the assessment records. Mere on non production of the notice(s) in question; in our considered view, is not sufficient to conclude that the Assessing Officer had not issued sec. 143(2) and sec. 142(1) notices which is view of the above overwhelming supportive evidence in the nature of assessment proceedings before us. We quote sec. 136 of the Act to conclude that the legislature has indeed treated proceedings before us Income Tax authorities to be judicial proceedings as well.
Issues Involved:
1. Validity of the order passed under Section 263 of the Income Tax Act, 1961. 2. Jurisdiction of the Commissioner of Income Tax (CIT) to revise the assessment. 3. Service and validity of notices under Sections 143(2) and 142(1). 4. Adequacy of enquiry conducted by the Assessing Officer (AO). 5. Limitation period for passing the order under Section 263. 6. Territorial jurisdiction of the CIT. 7. Validity of assessment order in the absence of proper enquiry. Detailed Analysis: 1. Validity of the Order Passed Under Section 263: The assessee challenged the CIT's order under Section 263, terming it arbitrary, illegal, and without jurisdiction. The tribunal upheld the CIT's order, stating that the AO's failure to conduct a proper enquiry rendered the assessment erroneous and prejudicial to the interest of the Revenue. The tribunal emphasized that inadequate enquiry is as good as no enquiry, thus empowering the CIT to revise the assessment order. 2. Jurisdiction of the CIT to Revise the Assessment: The tribunal confirmed that the CIT had the jurisdiction to revise the assessment order under Section 263. It was noted that the CIT's jurisdiction was upheld up to the apex court, affirming the CIT's power to direct the AO to conduct a thorough enquiry. 3. Service and Validity of Notices Under Sections 143(2) and 142(1): The assessee argued that no notices under Sections 143(2) and 142(1) were issued, rendering the assessment null and void. However, the tribunal found that the assessment records indicated the issuance of these notices. The tribunal relied on Section 114(e) of the Indian Evidence Act to presume that the AO performed the official act of completing the re-assessment as per the prescribed procedure. 4. Adequacy of Enquiry Conducted by the AO: The tribunal held that the AO's enquiry was inadequate, and the CIT was justified in revising the assessment order. The tribunal noted that the AO's failure to give a logical conclusion to the enquiry warranted the CIT's intervention under Section 263. 5. Limitation Period for Passing the Order Under Section 263: The tribunal observed that the limitation period for passing the order under Section 263 should be counted from the date of passing the order under Section 147 read with Section 143(3) and not from the date of intimation issued under Section 143(1). It was confirmed that the orders were passed within the time limit. 6. Territorial Jurisdiction of the CIT: The tribunal upheld that the CIT having jurisdiction over the AO who passed the order under Section 147 read with Section 143(3) had the territorial jurisdiction to pass the order under Section 263. 7. Validity of Assessment Order in the Absence of Proper Enquiry: The tribunal concluded that the AO's failure to conduct a proper enquiry rendered the assessment order erroneous and prejudicial to the interest of the Revenue. The tribunal rejected the assessee's claim that the re-assessment was non est and void, affirming that the CIT's observation about the non-issuance of statutory notices was against the assessment records. Conclusion: The tribunal dismissed the assessee's appeal, upholding the CIT's order under Section 263. The tribunal emphasized the importance of proper enquiry by the AO and confirmed the CIT's jurisdiction to revise the assessment order, thereby protecting the interest of the Revenue. The tribunal's decision was based on a detailed examination of the case records, relevant legal provisions, and judicial precedents.
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