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TMI Blog2013 (12) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 5-11-2013 - Chandra Poojari And Saktijit Dey, JJ. For the Appellant : Sri Solgy Jose T Kottaram For the Respondent : Sri A V Raghuram ORDER:- PER : Chandra Poojari This appeal by the Revenue is directed against the order of the CIT(A)-V, Hyderabad dated 15.2.2011 for A.Y. 2005-06. 2. The Revenue raised the following grounds: i) The order of the CIT(A) is erroneous both on facts of the case and in law. ii) The CIT(A) ought to have sustained the addition made on account of unexplained investment made by the assessee. iii) The CIT(A) erred in allowing the appeal of the assessee on the grounds that the notice u/s. 142(1) was issued beyond the prescribed time and in holding that assessment as not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd void. Since the assessment itself was quashed, the CIT(A) did not adjudicate the other grounds. Against this, the Revenue is in appeal before us. 5. The learned Departmental Representative submitted before us that the CIT (A) is totally incorrect in holding that the notice issued u/s 142(1) of the Act beyond a period of one year from the end of the relevant assessment year to be invalid as the proviso inserted to section 142(1) of the Act by Finance Act 2006 with retrospective effect from 1-4-1990 has clearly done away with any limitation with regard to the issuance of notice u/s 142(1) of the Act. In this context, the learned Departmental Representative relied upon a decision of Hon ble Delhi High Court in case of DIT vs. KLM Royal Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be invalid in view of the proviso to clause (i) of section 142(1) inserted by Finance Act, 2006 with retrospective effect from 1-4-1990. The said proviso reads as under:- Provided that where any notice has been served under this sub-section for the purposes of this clause after the end of the relevant assessment year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under sub-section (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this subsection . On a plain reading of the provision contained u/s 142(1) of the Act along with the proviso introduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be construed to mean that the Assessing Officer can issue a notice u/s 142(1) at any time after the end of the assessment year irrespective of the limitation prescribed u/s 153(1) of the Act. So far as the observation made by the CIT (A) that the provision contained u/s 147 of the Act would become redundant if section 142(1) is interpreted to mean that the Assessing Officer can issue a notice at any time after expiry of the relevant assessment year, in our view is misplaced. This is because of the fact that the provision contained u/s 147 of the Act can only be invoked for assessment of escaped income and hence to be applicable in a particular situation. Therefore, the provision contained u/s 142(1) and section 147 are independent provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year commencing on or after the 1st day of April, 1990 to a person who has not made a return within the time allowed under subsection (1) of section 139 or before the end of the relevant assessment year, any such notice issued to him shall be deemed to have been served in accordance with the provisions of this sub-section The proviso to section 142(1) was introduced by Finance Act, 2006 with retrospective effect from 1-4- 1990. The aforesaid amendment as explained in the Notes on clauses to the Finance Bill, 2006 is reproduced below:- Clause 35 of the Bill seeks to amend section 142 of the Income-tax Act relating to inquiry before assessment. The existing provisions contained in clause (i) of subsection (1) of said secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind any substantial force in the argument of the learned AR of the assessee that notices u/s 142(1) cannot be issued when no return of income was filed. The provision u/s 142(1) is very much clear in this respect. The decision of ITAT, Calcutta Bench in the case of Shaw Wallace Co. Ltd. Vs. DCIT (2006) 101 TTJ 258 relied upon by the learned AR is of no help to the assessee as it was rendered prior to the insertion of proviso to section 142(1) of the Act. We are therefore of the view that the CIT (A) was not correct in holding the issuance of notice u/s 142(1) to be ab initio void. Since the CIT (A) has decided the appeal on technical issue without going into merits of the case, we think it proper to set aside the matter to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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