2016 (7) TMI 316 - AT - Income Tax

Reopening of assessment - Held that - It is quite clear that the Assessing Officer has to issue and serve a notice under section 148 of the Act to the assessee before making assessment under section 147 of the Act. The notice under section 148 of the Act requires the assessee to furnish his return of income within the time specified in the notice. This return has to be in the prescribed form and in the prescribed manner. It has been very categorically provided in the section that afterwards the provisions of this Act shall so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 of the Act. Therefore, the provisions of section itself negate the arguments taken by the learned D.R. that once issuing notice under section 148 of the Act, the Assessing Officer cannot go into the provisions of other sections. Once the assessee files return in pursuance of notice under section 148 of the Act, which is deemed to be filed under section 139 of the Act and in case the Assessing Officer wants to proceed with the return filed by the assessee, he has to issue a notice under section 143(2) of the Act. Any assessment framed without issue of notice under section 143(2) of the Act, suffers from Jurisdictional error. In view of the above, we hereby quash the order of the Assessing Officer, which was made without issue of notice under section 143(2) of the Act. - Decided in favour of assessee.

Summary

Issues Involved:
Cross appeals by two different assessees against separate orders of Commissioner of Income Tax (Appeals) for assessment year 2011-12 regarding provisions of Section 250(6) of the Income Tax Act, 1961.

Detailed Analysis:

ITA No.102/Chd/2016 (Assessee's Appeal):
The assessee challenged the assessment under section 147 r.w.s. 143(3) of the Act, citing non-issuance of notice under section 143(2). The CIT (Appeals) dismissed the ground based on section 292BB deeming notice served if the assessee cooperated. The appellant argued that section 292BB only applies to service, not non-issuance, citing relevant case law. The Tribunal noted that absence of statutory notice cannot be cured by section 292BB and quashed the assessment, emphasizing the necessity of notice under section 143(2) for jurisdiction.

ITA No.169/Chd/2016 (Revenue's Appeal):
The Tribunal's decision in ITA No.102/Chd/2016 rendered the Revenue's appeal moot, leading to its dismissal without further adjudication.

ITA No.103/Chd/2016 (Assessee's Appeal):
Similar to ITA No.102/Chd/2016, the Tribunal quashed the order of the Assessing Officer due to non-compliance with the notice under section 143(2), resulting in the allowance of the assessee's appeal.

ITA No.170/Chd/2016 (Revenue's Appeal):
Following the decision in ITA No.103/Chd/2016, the Revenue's appeal was deemed infructuous and dismissed without additional review.

In conclusion, the Tribunal allowed the appeals of the assessees in ITA Nos.102 & 103/Chd/2016 while dismissing the appeals of the Revenue in ITA Nos.169 & 170/Chd/2016, emphasizing the criticality of complying with statutory notice requirements under the Income Tax Act for valid assessments under section 147.