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TMI Blog2012 (12) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 143(3) for which notice under section 142(1) had already been issued and the assessment proceedings had already been started. Therefore, the notice issued u/s 148 by the AO was bad in law and therefore, assessment so framed was bad in law and therefore, assessment so framed is quashed - in favour of assessee. - I.T.A. No.578(Asr)/2011 - - - Dated:- 5-6-2012 - SH. H.S. SIDHU, AND SH. B.P. JAIN, JJ. Appellant By: Sh. Surinder Mahajan, CA Respondent By: Sh. Amrik Chand, DR ORDER PER BENCH: This appeal of the assessee arises from the order of the CIT(A), Jalandhar, dated 22.11.2011 for the assessment year 2006-07. 2. The assessee has raised following grounds of appeal: 1. That on the facts ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals), Jalandhar has grossly erred in law in confirming the addition made by the A.O. 2.1. That the Ld. CIT(A) has grossly erred in holding that the agreement dated 26.5.2005 was valid although the same was not signed by the purchaser. 2.2. That the Ld. CIT(A) has grossly erred in holding that the affidavit of Sh. Jagdish Rai denying the execution of the agreement dated 26.5.2005 was inconsequential. 2.3. That the Ld. CIT(A) has grossly erred in law in holding that the sale value of the property at RS.22.29 lakhs was justifiable taken by the Ld. AO on the basis of surrounding circumstances . The addition has been confirmed by the Ld. CIT(A) on the basis of his own assumptions, presumptions, conjectures and surmises. 2.4. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to file return of income for the A.Y. 2006-07 which was served on the assessee on 15.12.2006. Copy of notice enclosed at page 33 of the paper book. Assessee filed return of income in response to notice u/s 142(1) of the Act on 29.12.2006. Return was processed u/s 143(1) on 20.03.2007 . No notice u/s 143(2) of the Act was issued despite of the fact that the Assessing Officer at the time of filing of the return was in possession of information received from CIT, Jalandhar, on the basis of which statement of assessee was recorded and after recording statement, notice u/s 142(1) of the Act was issued. 3. Issue of notice u/s 148 of the Act after initiation of assessment proceedings by issue of notice u/s 142(1) of the Act is illegal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C). 5. That the Ld. CIT(A) has not appreciated full facts and law laid down by the Hon ble Jurisdictional Punjab Haryana High Court in the case of M.P. Singh 217 CTR 487 with his observations in para 4.3 page 14 of the appellate order. Case of the Ld. CIT(A) while holding that decision of the Hon ble Jurisdictional Punjab Haryana High Court in the case of M.P. Singh 217 CTR 487 does not apply to the facts of the present case is that use of the term may in section 143(2) of the Act implies that when no notice u/s 143(2) of the Act is issued, assessment proceedings of return filed in response to notice u/s 142(1) of the Act stood terminated. Ld. CIT(A) has lost sight of the fact that in section 143(2) (ii) no where term may has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee have been incorporated and page 3 to 5 of the assessment order wherein reasons recorded on 23.05.2008 have been incorporated. 4. The Ld. counsel for the assessee, therefore, prayed to quash the assessment made under section 143(3) of the Act by the A.O. on 26.12.2008. 5. The Ld. DR, on the other hand, relied upon the orders of the CIT(A) and that of the A.O. 6. We have heard the rival contentions and perused the facts of the case. The issue before us is that the notice u/s 142(1) had been issued, then issue of notice u/s 148 of the Act is illegal or not since the machinery for assessment has already been set in motion by issue of notice u/s 142(1) of the Act. In the present case, the assessee has been issued a notice under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act before the expiry of limitation period u/s 153(1) of the Act. The limitation in the present case expired on 31.12.2008. At the same time, the AO recorded the reasons under section 148 of the Act on 23.05.2008 and notice under section 148 was issued on 23.05.2008, when machinery provision for making assessment had been set in motion by issuance of notice u/s 142(1) of the Act. The AO was not authorized to enter into recording the reasons under section 148 of the Act with a view that income had escaped assessment and then making the assessment u/s 143(3) of the Act and not under section 143(3) read with section 147 of the Act. Both the provisions of the Act are distinct and separate and the assessments are made under different circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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