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TMI Blog2016 (2) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... of impugned re-assessment order. we are of the considered view that in the absence of return filed in accordance with law or any valid return being on record, the objections raised by the assessee is not sustainable in law and is thus without any merit. - Decided against assessee Addition on advances to sister concern instead of using the fund on the object of the Trust - Held that:- The assessee trust has correctly utilized the funds for the purpose of the object of trust. When the amount has been spent by the assessee for the construction of the building that was for its stated education purpose, then the amount claimed can be considered as utilized for the purpose of the object of trust and the requirements of section 11(2) r.w.s. 11(3)(a) of the Act stands fulfilled. Thus, the relief claimed under section 11(2) of the Act has been rightly allowed by the CIT(A) as noted above. The advance of ₹ 13,00,000/- made to VISEA Trust therefore can be said to be out of surplus accumulated and remained at the disposal of the assessee and does not offend provisions of section 11(2) of the Act in any manner. Hence, we are not inclined to interfere with the order of the CIT(A) - Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order of the CIT(A) dated 02.12.2010. 4. Accordingly, the assessee is once again in appeal before us against the orders of the authorities below as per the Grounds of Appeal taken hereunder :- 1. The learned CIT(A) has erred in confirming the assessment made by the AO on 03.12.2009 u/s 143(3) r.w.s. 147 which is without jurisdiction in the absence of notice u/s 143(2) was not served. 2. In the absence of condition precedent for issuance of notice u/s 148 of the Income Tax Act, 1961, the impugned assessment order is bad in law, null, and void ab initio and without jurisdiction and hence the same may please be vacated/ annulled. 3. The learned CIT(A) erred in holding a loan given of ₹ 13,00,000/- as income of the appellant treating the transaction as non-genuine. 4. The appellant craves leave to amend or alter any of the grounds of appeal or add to the same, if demand necessary. 5. The Ld. Authorized Representative for the assessee, at the outset, submitted that notice under section 143(2) has not been served upon the assessee and therefore impugned re-assessment order dated 03.12.2009 framed under section 143(3) r.w.s. 147 of the Act is void a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under section 143(2) will invalidate the re-assessment order framed under section 143(3) r.w.s. 147 of the Act in the facts of the case set out or not. We notice that the return of income filed dated 09.03.2007 is not a return under section 139(1) or under section 139(4) of the Act. The return has been filed beyond the time limit available under the scheme of the Act and is therefore nonest and invalid in the eyes of law. This position of law is supported by judicial precedent in the case of Kumar Jagdish Chandra Sinha vs. CIT, (1996) 220 ITR 67 (SC). 7.1 In the context of the facts of the case, it would be pertinent to refer to section 143(2) which reads as under :- [Assessment 143. [(1) xxxxx [(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall,- (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormal request was made to treat the earlier return filed after lapse of statutory time as return in response to such notice. Thus, no valid return is on record from the Assessee either under S. 139(1) or under S. 139 (4) or under S. 148 of the Act. It is a case of the Revenue that since the requirements of section 147/148 are duly met with, the provisions of section 143(2) are rendered procedural and does not affect the validity of the assessment. As noted above, return filed in response to notice under section 148 is deemed to return filed under section 139 and all the provisions of the Act shall apply accordingly. As a consequence, the notice for assessment has to be necessarily issued as mandated under section 143(2) of the Act in so far as the return filed in response to S. 148 is concerned. 7.4 As can be seen, section 143(2) provides that where a return were made in section 139 or in response to notice under section 142(1), the provisions of section 143(2) will come into play in appropriate cases. However, in the same vain, we notice that the assessee has not filed any return falling within the ambit of section 139 at all. The return filed was not under S. 142(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not, in our view, impinge upon the legality of impugned re-assessment order. 7.8 Ld. AR also advanced that AO has not completed the assessment on the premise that no return was filed at all. As per the Ld. AR, the AO has proceeded on the basis of return filed on 09/03/2007. We find no virtue in such arguments. Merely because an invalid return filed previously has been referred by AO, this would not validate such return with taking recourse provided under law. The AO is not precluded in law from taking note of facts provided in an invalid return so long as re-assessment order is framed in accordance with law. 7.9 In view of the aforesaid discussion, we are of the considered view that in the absence of return filed in accordance with law or any valid return being on record, the objections raised by the assessee is not sustainable in law and is thus without any merit. 8. In the result, the Grounds No.1 and 2 of the appeal of the assessee are dismissed. 9. Having dealt with the legal objection raised on behalf of the assessee, we shall now proceed to adjudicate the issue on merits as per Ground No.3 of the appeal. 10. As per para 3 of the assessment order, it is observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue date of filing the return. Due date was 31/07/2004 whereas the return was filed on 09/03/2007. Another reason given by the AO is that the appellant has failed to spend more than 85% of the income this year on the objects of the Trust. From the income and expenditure account the total income admitted this year is ₹ 45,43,948/-, the appellant has given the following particulars of the expenditure incurred during the year. Total income---------------------------------------- Rs.4543948/- Income Expenditure Rs.29,13,771/- As per asstt. Order. Taxes, Rent, etc. ₹ 35,698/- Fixed Assets (Education) Building Construction Rs.38,03,965/- Furniture fixtures, etc. Rs.13,65,354/- Rs.51,74,319/- Rs.51,74,319/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the AO was not justified in not considered properly the said Form No.10B before finalizing the impugned assessment order. The AO's action therefore in not considering the particulars of income and expenditure given in the said form is not justified in view of the direct judgement on the issue by the Hon ble Supreme Court in the case CIT vs. Nagpur Hotels Owners Association (supra). The appellant is found to have spent this year more than 85% as required under the law. Consequently, the impugned addition of ₹ 9,48,585/- is unjustified and the same is deleted. This ground of appeal is allowed. 12. We find ourselves in agreement with the reasonings provided by the CIT(A) noted above, which is self explanatory. From the aforesaid findings returned by CIT(A), we notice that the assessee trust has correctly utilized the funds for the purpose of the object of trust. When the amount has been spent by the assessee for the construction of the building that was for its stated education purpose, then the amount claimed can be considered as utilized for the purpose of the object of trust and the requirements of section 11(2) r.w.s. 11(3)(a) of the Act stands fulfilled. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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