2022 (7) TMI 429 - AT - Income Tax

Reopening of assessment u/s 147 - period of limitation - Notice issued before or after expiry of time limit available with the AO for issuance of notice u/s. 143(2) - HELD THAT - As we noted that the assessee filed its return of income on 22.10.2003 u/s. 139(1) of the Act. This return was processed and intimation u/s. 143(1) was issued vide dated 05.03.2004. However, the AO did not serve notice u/s. 143(2) of the Act on the assessee before 31.10.2004, despite the fact that the time limit was available for sending notice u/s. 143(2)(ii) of the Act. But before that, the notice u/s. 148 was issued on 03.06.2004 before the expiry of time limit for completion of assessment. As the issue is covered and the facts are very clear that once the time limit for issuance of notice u/s. 143(2) of the Act was available with the Assessing Officer up to 31.10.2004, the AO can resort to the notice u/s. 143(2)(ii) of the Act and no need for issuing of the notice u/s. 148 of the Act as held in TCP LTD. 2009 (4) TMI 396 - MADRAS HIGH COURT and we quash the assessment proceedings and allow this CO of the assessee.

Summary

Issues:
1. Condonation of delay in filing appeal by Revenue.
2. Jurisdiction issue raised by assessee regarding reassessment proceedings.
3. Validity of assessment order passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961.

Analysis:

1. The appeal filed by Revenue was found to be 13 days beyond the limitation period. The Revenue filed a condonation petition stating the delay was unintentional due to inability to trace records in time. The delay was condoned considering its small extent and reasonable cause, and the appeal was admitted.

2. The assessee raised a jurisdiction issue regarding reassessment proceedings under section 147 r.w.s. 148 of the Act. The issue was initially dismissed by CIT(A). The assessee contended that the assessment order was not valid as the notice for reopening was issued before the time limit for assessment based on the original return had expired. Citing decisions of the Hon'ble Madras High Court, the assessee argued that the notice u/s. 148 was premature. The CO by the assessee was allowed based on these arguments.

3. The assessee had filed the return for AY 2003-04 declaring a nil income under normal computation. The AO issued a notice u/s. 148 of the Act after processing the return. The issue revolved around the timing of the notice u/s. 148 in relation to the time limit for issuing a notice u/s. 143(2). Referring to decisions of the Madras High Court, it was concluded that the notice u/s. 148 was premature as the time limit for issuing notice u/s. 143(2) had not expired. Consequently, the assessment proceedings were quashed, and the CO of the assessee was allowed. The appeal of the Revenue was dismissed as infructuous.

This detailed analysis of the judgment from the Appellate Tribunal ITAT Chennai highlights the key issues addressed in the case, including the condonation of delay, jurisdiction issues raised by the assessee, and the validity of the assessment order under the Income-tax Act, 1961.