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TMI Blog2011 (5) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... hese appeals are arising out of the reassessment orders passed by the A.O. u/s. 147/143(3) of the I.T. Act, 1961. There is no dispute to the fact that the A.O. recorded reasons before initiating reassessment proceedings and the said issue of initiation of reassessment proceedings is not before us. It is also not in dispute that the assessee filed the returns pursuant to notices issued u/s. 148 of the Act. 4. In all these appeals there is a common issue as to whether the ld. C.I.T.(A) has erred to hold that the reassessment proceedings are invalid as the A.O. had not issued notice u/s. 143(2) of the Act for all the assessment years under consideration, after initiation of reassessment proceedings u/s. 148 of the Act. 5. At the time of hearing, the ld. Departmental Representative submitted that nonissuance of notice u/s. 143(2) of the Act does not make the reassessments invalid as the assessee was afforded reasonable opportunity by the A.O. before passing the assessment orders for all the assessment years under consideration. The ld. Departmental Representative relying on the decision of Hon'ble Madras High Court in the case of Areva T & D India Ltd. vs. ACIT [294 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment and non-issuance of notice u/s. 143(2) of the Act after filing of return by the assessee in response to notice u/s. 148 of the Act vitiates the reassessment proceedings. The ld. A/R further submitted that similar issue had also been considered by Special Bench of I.T.A.T., Delhi in the case of Raj Kumar Chawla vs. ITO [94 ITD 1 (SB-Del)], wherein it was held that issuance of notice u/s. 143(2) of the Act within the time prescribed, to the return filed pursuant to sec. 148 of the Act is mandatory and if such a notice is not issued within the time prescribed, the assessment is a nullity. The ld. A/R further referred the decision of Hon'ble Bombay High Court in the case of CWT vs. HUF of H.H. Late J.M.Scindia [300 ITR 193 (Bom)] and submitted that in the said case the reassessment proceeding was initiated under the Wealth-tax Act, 1957 and the A.O. completed the assessment without issuing notice u/s. 16(2) of the W.T. Act within the time prescribed under the provision and in the said circumstances it was held that the reassessment was not valid. He submitted that the provisions of sec. 16(2) of W.T. Act are in pari materia with the provisions of Sec. 143(2) of I.T. Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been inserted by the Finance Act, 2008 w.e.f. 1st April, 2008, i.e.applicable for assessment year 2008-09 and whereas the assessment years under consideration are 2000-01, 2001-02 and 2003-04. 8. Now coming to the issue as to whether non-issuance of notice u/s. 143(2) of the Act goes to the very root of the validity of the reassessment order or not, we find that by virtue of Sec. 143(2) of the Act, the assesses have been given opportunity to substantiate the return filed. As per proviso to sub-sec. (2) of sec. 143, no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return u/s. 139 or in response to notice u/s. 142(1) is furnished. Therefore, for initiating scrutiny and/or reassessment proceeding, service of notice u/s. 143(2) of the Act is a condition precedent. In the instant cases, admittedly no notice u/s. 143(2) of the Act had ever been served upon the assessee and this fact is also evident from the remand report of the A.O. stating that notice u/s. 143(2) of the Act was not issued after issuing of notice u/s. 148 of the Act. We find that the I.T.A.T., Mumbai Bench as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was that the notice u/s 143(2) should be issued in those cases only where the assessee has filed a fresh return in response to notice u/s 148 of the Act and not in those cases where the return already filed is deemed to have been filed in response to notice u/s 148 of the Act. On the other hand, Shri Amit Shukla, Advocate, ld. Counsel for the assessee submitted that before making assessment under Section 143(3) read with Section 147 of the Act, the AO was obliged under the law to issue notice under Section 143(2) and serve the same on the assessee within a stipulated period of one year. According to the ld. Counsel for the assessee, the 'issue' is no longer res integra that such a notice is mandatory and in the absence of such mandatory notice being served on the assessee, the AO does not get jurisdiction to make an assessment under Section 143(3) read with Section 148 of the Act. We find substantial force in the above submission of Shri Amit Shukla, Advocate,ld. Counsel for the assessee. It is seen that while deciding the issue in favour of the assessee, the ld.CIT(A) has relied on the decisions of Hon'ble Supreme Court in the case of ACIT and another vs. Hotel Blue Moon (2010) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(2) of the Act had been served on the assessee within the stipulated period and as such his return had become final. In view of the amendment made in section 147 of the Act with effect from April 1, 1989, the Assessing Officer could not only assess or reassess the escaped income in respect of which proceedings under section 147 have been initiated but also any other income chargeable to tax which may have escaped assessment and which comes to his knowledge subsequently in the course of such proceedings. From the letter dated July 30, 1998, it was evident that the Assessing Officer was seeking general information on other issues merely to verify the return. Such general inquiry could only be made by issuing a notice under sub-section (2) of section 143 within the stipulated period which in the present case had already expired." 8.2. Considering the facts of the case before us and respectfully following the aforesaid judicial pronouncements including that of Hon'ble Apex Court in the case of ACIT vs. Hotal Blue Moon (supra), we are of the considered view that the A.O. is bound to serve on the assessee a notice u/s. 143(2) of the Act requiring him, on a date to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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