2023 (10) TMI 330 - HC - Income Tax

Validity of reopening of assessment - assessment proceeding u/s 143(3) r.w.s. 153C of the Act was completed qua the respondent/assessee - In the original appellate proceedings, as carried out before CIT(A) assessee succeeded on the ground that the Assessing Officer (AO) had wrongly assumed jurisdiction u/s 153C - CIT(A) set aside the assessment order as there was no tangible material available with the AO, the sanctioning authority had not applied its mind, independently, to appraise the material based on which reasons to believe have been recorded by the AO and that no notice under Section 143(2) of the Act had been issued to the respondent/assessee, although there was material on record to show that the respondent/assessee had communicated to the AO that the return originally filed by it on 31.08.2007 should be treated as a return in response to the notice issued u/s 148 - ITAT appraised the aforementioned observations and findings returned by the CIT(A) AND dismissed the appeal of the appellant/revenue. HELD THAT - We find upon perusal of the record that, apart from anything else, the appellant/revenue had not raised any ground before the Tribunal which assailed the finding returned by the CIT( A ) that the sanctioning authority had not applied its mind independently to the approval granted by it for triggering the reassessment proceeding. The grounds that the appellant/revenue took before the Tribunal were confined to whether the respondent/assessee had communicated to the AO that the return originally filed should be treated as a return in response to the notice issued under Section 148 of the Act. During the hearing, we are told appellant/revenue, that the revised grounds were filed; a hard copy of the same was furnished to us in the course of the hearing, but none of the revised grounds contained in the appeal dealt with the issue concerning the sanction accorded by the specified authority u/s 151 of the Act. Be that as it may, qua the aspect concerning the issue as to whether or not the respondent/assessee had communicated to the AO that the return originally filed should be treated as a return in response to the notice issued under Section 148 of the Act, the CIT(A) recorded the findings of fact which were again, sustained by the Tribunal that No notice u/s 143(2) is found on the record maintained by the AO which proves that the AO has not issued statutory notice u/s 143(2) of the Act. Once a return has been filed u/s 148, AO is bound to issue a notice u/s 143(2) in order to assume jurisdiction to frame assessment u/s 143(3) or u/s 144 which has not been done by the AO in the present case - also the assessment so completed without issuance of notice u/s 143(3) does not empower the AO to complete an assessment u/s 143(3) or u/s 144 of the Act. When assessment is completed u/s 143(3) or u/s 144 of the Act, issuance of notice u/s 143(2) is mandatory and in case no such statutory notice is issued, the AO cannot assume jurisdiction to frame assessment u/s 143(3). These findings of fact have not been disputed by the Tribunal. We also find that there is no ground taken in the instant appeal that the findings returned by the CIT(A) on the aforementioned aspect, which are, as noticed above, affirmed by the Tribunal, were perverse. A broad question has been proposed by the appellant/revenue that no return was filed by the respondent/assessee, without assailing the details given in CIT(A) s order. For the moment, even if we were to agree with the appellant/revenue that the respondent/assessee had never communicated to the AO that the original return should be treated as a return as against the notice dated 143(2) of the Act, the impugned order will still stand as the assessment order was set aside by the CIT(A) on other grounds, including the ground that the sanctioning authority has not applied its mind independently. No ground, even according to Mr Menon, was taken before the Tribunal assailing the conclusion reached by the CIT(A) in that regard. Thus no interference is called for with the impugned order passed by the Tribunal. No substantial question of law arises for our consideration.

Summary

Issues:
The judgment involves applications seeking condonation of delay in re-filing appeals, and appeals concerning Assessment Years (AYs) 2007-08 and 2008-09.

Delay Condonation:
The appellant/revenue sought condonation of delay of 421 days in re-filing the appeals. Despite the substantial delay, the court decided to hear the matter on merits and condoned the delay.

Assessment Years 2007-08 and 2008-09:
The appeals challenged a common order dated 22.03.2021 concerning AYs 2007-08 and 2008-09. The issues arising in these years were found to be common. The assessment proceedings revealed additions made on various grounds, including unexplained share application money and other deposits. The CIT(A) set aside the assessment order on grounds related to jurisdictional errors and lack of tangible material. The Tribunal upheld the CIT(A)'s findings, dismissing the appeal of the appellant/revenue.

Grounds and Findings:
The appellant/revenue raised grounds related to the absence of a notice under Section 143(2) and the jurisdictional error in issuing the assessment order. The CIT(A) findings on communication with the AO regarding the return filed were upheld by the Tribunal. The appellant/revenue did not challenge the conclusions on the sanctioning authority's independent appraisal. The court found no substantial question of law and closed the appeals, noting that the findings of fact by the Tribunal and CIT(A) were not perverse.