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2015 (6) TMI 830 - AT - Income TaxValidity of assessment u/s 143(2) - non issue of notice - Held that - The Assessing Officer was supposed to issue notice u/s 143(2) within a period of 12 months from the end of the month in which the return was filed by the assessee. In the present case, the return was filed on 15/09/2006 by way of filing of letter before the Assessing Officer to the effect that the original return filed by the assessee should be treated as return filed in compliance to notice u/s 148 of the Act. Hence, it has to be taken that the return in question was filed by the assessee on 15/09/2006 and therefore, notice issued by the Assessing Officer u/s 143(2) on 05/09/2006 cannot be considered as notice after filing the return of income. Since no further notice u/s 143 (2) was issued by the Assessing Officer, we are of the considered opinion that this issue is covered in favour of the assessee by the judgment of Hon ble Apex Court rendered in the case of ACIT vs. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT OF INDIA . - Decided in favour of assessee.
Issues involved:
1. Validity of assessment due to notice u/s 143(2) not being issued within the prescribed time. 2. Deletion of addition made on account of unexplained investment u/s 69 of the IT Act 1961. 3. Initiation of valid proceedings u/s 147 of the IT Act 1961. 4. Assessment order passed in absence of compliance by the assessee. Detailed Analysis: 1. The appeal by the Revenue challenged the validity of the assessment due to the non-issuance of notice u/s 143(2) within the prescribed time. The Revenue contended that the CIT(A) erred in allowing the assessee's appeal by holding the assessment invalid. The Revenue argued that no return was filed in response to the notice u/s 148, making the issuance of a fresh notice u/s 143(2) not mandatory. However, the CIT(A) held that the assessment was not valid as no proper notice was issued by the Assessing Officer after the return was filed. The ITAT Lucknow upheld the CIT(A)'s decision, citing the judgment in ACIT vs. Hotel Blue Moon, emphasizing the necessity of issuing notice u/s 143(2) after the return is filed for a valid assessment. 2. The Revenue also contested the deletion of the addition made on account of unexplained investment u/s 69 of the IT Act 1961. Despite providing opportunities, the assessee did not furnish proof to explain the sources of investment made. The CIT(A) held the assessment invalid and deleted the addition. The ITAT Lucknow upheld the CIT(A)'s decision, emphasizing the importance of proper assessment procedures and the necessity of providing proof for unexplained investments. 3. The issue of valid proceedings u/s 147 of the IT Act 1961 was raised by the Revenue, stating that the A.O. initiated valid proceedings and provided reasons to the assessee, who failed to furnish proof of the sources of income invested. The CIT(A) held the assessment invalid and deleted the addition. The ITAT Lucknow upheld the CIT(A)'s decision, emphasizing the requirement for the assessee to provide proof in such cases. 4. Lastly, the Revenue argued that the assessment order was passed in the absence of compliance by the assessee, despite information gathered from the Investigation Wing. The A.O. issued notices, but the assessee failed to discharge the onus as required by law. The CIT(A) held the assessment invalid and deleted the addition. The ITAT Lucknow upheld the CIT(A)'s decision, highlighting the importance of compliance and providing necessary information during assessments. In conclusion, the ITAT Lucknow dismissed the appeal by the Revenue and the Cross Objection of the assessee, affirming the CIT(A)'s decision to invalidate the assessment due to procedural irregularities and lack of compliance, emphasizing the significance of following proper procedures and providing necessary proof during assessments.
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