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TMI Blog2015 (10) TMI 2317X X X X Extracts X X X X X X X X Extracts X X X X ..... of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the assessment under Section 147 read with Section 148 of the Act as the same has been passed without proper service of statutory notice under Section 148 of the Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the reopening of the assessment and consequently making reassessment without complying with the statutory conditions prescribed under Section 147 read with Section 148 of the Act. 4. On the facts and circumstances of the case, the CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the reassessment proceedings are bad in law and on facts as the reasons recorded for reopening the assessment do not meet the requirements of Section 147 of the Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the order assed by the AO despite the fact that the same has been passed without issue of statutory notice under section 143(2) of the Act. 6. On the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Affidavit, Bank Account copy of M/s Bhavani Portfolio (P) Ltd., the share applicant company, before the AO. After considering the reply filed by the assessee and the documentary evidence supporting the claim of the assessee, the AO completed the assessment and made the addition of ₹ 1 Crore to the income return filed by the assessee as unexplained credit u/s. 68 of the I.T. Act and AO completed the assessment on 31.12.2010 u/s. 143(3)/147 of the I.T. Act, 1961. 3. Aggrieved with the aforesaid order dated 31.12.2010, assessee filed the Appeal before the Ld. CIT(A), who impugned order dated 31.10.2012 dismissed the Appeal of the Assessee. 4. Against the aforesaid order dated 31.12.2010 passed by the Ld. CIT(A), assessee is in appeal before the Tribunal. 5. At the time of hearing Ld. Counsel of the assessee argued only on the issue involved in ground no. 5 relating to non-service of notice u/s. 143(2) of the I.T. Act. Ld. Counsel of the assessee stated that the assessment order has been passed without issuing the notice u/s. 143(2) of the I.T. Act. He stated that this Bench can peruse the assessment order and the record which clearly shows that the AO has not even issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of High Court of Allahabad. 6. Ld. DR relied upon the order passed by the Ld. CIT(A) and stated that the Ld. First Appellate Authority has passed a well reasoned order on the basis of the records and as per the provisions of law, therefore, the impugned order may be upheld by dismissing the Appeal filed by the Assessee. 7. We have heard both the parties and perused the relevant records especially the order passed by the Revenue Authorities alongwith the documentary evidence filed by the assessee in the shape of Paper Book containing pages 1 to 179 attaching therewith the various documentary evidence supporting the claim of the assessee as well as the various decision rendered by the Hon ble Supreme Court and Hon ble High Court on the legal issue in dispute. No doubt assessee has raised 12 grounds of appeal in which the assessee challenged the non-service of the notice u/s. 148 dated 30.3.2010 which was received back unserved. In support of his contention he has also cited various decisions. Assessee has also challenged the addition in dispute on merit also by producing various documentary evidence supporting its claim before the Revenue Authority as well as before us in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27.12.2010 has been received and placed on record. With regard to share application money of ₹ 60 lakhs from M/s Rishab Soes P Ltd., the assessee company has filed an affidavit dated 16.12.2010 from its Director Shri Tarun Aggarwal, stating that the company has not entered into any transaction with M/s Rishab Shoes (P) Ltd.. The said fact was also confirmed by the Director of the said company vide his letter dated 8.12.2010. In this case an information was received from the DIT(Inv.), New Delhi that Sh. Tarun Goyal has created a number of private limited companies and firms for providing accommodation entries. The Directors of these companies were his employees who worked in his office as peons, receptionists etc. All the documents were got signed from these employees. A number of Bank accounts in various banks were opened in the names of these companies and his employees, in which huge cash deposits were made. Later cheques were issued to various beneficiaries, disguising the whole transaction as genuine. All the companies floated by Sh. Tarun Goyal are not carrying out any genuine activity and are merely being used to provide accommodation entries. Hence, all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d credits in the books of the assessee. Since the assessee has introduced an amount of ₹ 1 crore as cash credit in its books and could not explain the above transaction, penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961 are being initiated for filing inaccurate particulars of income. With these remarks, the income of the assessee is computed as under:- Income of assessee 14,151/- Add: unexplained credit as discussed 1,00,00,000/- Above Total income 1,00,14,151/- Assessed at ₹ 1,00,14,151/-. Issue necessary forms. Charge interest as per law. Initiate penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961 separately. 7.2 Keeping in view of the aforesaid assessment order, we are of the view that the AO has not issued notice u/s. 143(2) of the I.T. Act which is mandatory. We are also of the view that in completing the assessment u/s. 148 of the Act, compliance of the procedure laid down u/s. 142 and 143(2) is mandatory. As per record, we find that there was no notice issued u/s. 143(2) of the I.T. Act which is very much essential for reassessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act 1961. CIT vs. M/s Panorama Builders Pvt. Ltd. in Tax Appeal no. 435 of 2011 of Hon'ble Gujarat High Court Issue Involved: Whether non-issuance of the notice u/s 143(2) within the prescribed time, made the whole block assessment order null and void and bad in law, despite the assessee not having raised any objection before the passing of the assessment order and despite the provisions of section 292BB of the Act? Held: In this case, Hon'ble High Court has held that section 292BB cures the defects in service of notice but section 292BB is 'confined to only service of notice under this Act and this section does not apply to 'Issuance of notice' under the provisions of Act. It does not lay down that if a mandatory notice is required to be issued by the assessing officer and it has not been issued within the period of limitation fixed under the law, then such notice shall be deemed to have been issued within time. It has been further held that resort cannot be taken by the Revenue to section 292BH to give a go-bye to mandatory requirement of issuance of notice within the statutory fixed by the proviso to section I43(2) of the Act. CIT vs Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of undisclosed assessment filed by the assessee issuance of a notice under section 143(2) is a prerequisite for framing the block assessment order under chapter XlV B of the Income Tax Act, 1961. We are also of the view that if an assessment order is passed in such a situation without complying with section 143(2), it would be invalid and not be merely irregular. RAJ KUMAR CHA WLA AND ORS. VS. ITO - (2005) 94 ITD 1 (Del)(SB) Limitation for re-assessment- Service of notice u/s143(2) in time - A.Y.1995-96. It was presumed by legal fiction that a return filed uls 148 of the Income Tax Act 1961 would be treated as a return filed u/s 139 of the Act. The assessee had filed its return in response to a notice issued u/s 148 of the Income Tax Act 1961. The service of notice u/s143(2) of the Act within 12 months of filing the return u/s 148 of the Act was mandatory, but the notice had been served beyond 12 months. Therefore, as the re-assessment was barred by limitation, no re-assessment could be made u/s 143(3) r/w S.147 of the Act.- ITAT Delhi F Special Bench. 8. In the background of the aforesaid discussions and precedents relied upon, we are of the considered view that t ..... 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