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TMI Blog2006 (4) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire complexion of the matter and the order though passed under section 139(9) would legitimately be termed as an order under section 143(3) and hence it was appealable - we answer both the questions referred to above accordingly in the affirmative, i.e., in favour of the assessee and against the Department - - - - - Dated:- 21-4-2006 - Judge(s) : A. K. YOG., PRAKASH KRISHNA. JUDGMENT The Income-tax Appellate Tribunal, Allahabad, has referred the following two questions of law for the opinion of this court, under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"): "1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that an appeal lay a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually an order under section 143(3) as it was passed only after notice under section 143(2) dated March 28, 1990, was accepted and it was held by the Commissioner of Income-tax (Appeals) that although the order before him was passed under section 139(9) of the Act it was in fact an order under section 143(3) of the Act. The Commissioner of Income-tax (Appeals) further directed the Assessing Officer to pass a fresh assessment order. The Department filed an appeal before the Tribunal on the ground that notwithstanding the issue of notice under section 143(2), the order passed under section 139(9) of the Act was not appealable. The said contention was repelled by the Tribunal and it confirmed the order passed by the Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the income-tax returns filed by the assessees were defective inasmuch as the profit and loss accounts submitted by the assessee were provisional in nature. The question as to whether an appeal would lie when a notice for assessment under section 143(2) of the Act was issued even in the case of defective return and the Assessing Officer passed the order under section 139(9) of the Act subsequently was not involved therein even remotely. Similarly in the case of National Insurance Co. Ltd. v. CIT [1995] 213 ITR 862 (Cal), it has been held that when the income-tax return of a company has not been signed and verified by the managing director, the return is not valid, has no application to the controversy at hand. For the same reasons Sud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal has recorded a categorical finding that notwithstanding the failure on the part of the assessee to remove the defects as pointed out by the Assessing Officer, the Assessing Officer issued a notice under section 143(2) of the Act. The very opening words of sub-section (2) of section 143 reads "where a return has been made under section 139 ... serve on the assessee a notice requiring him ..." to produce any evidence on which the assessee may rely in support of the return. The Tribunal has found that unquestionably a notice purporting under section 143(2) of the Act was issued by the Assessing Officer. The assessee in view of the said notice, rightly entertained the belief that the assessment proceedings has commenced and the return th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd regional offices and the assessee was still sorting out the details when it received the notice under section 143(2) which naturally conveyed to the assessee that now concentration is on compliance with the notice under section 143(2) of the Act. The Tribunal is right in making observation that the Department cannot put back the entire machinery in the reverse gear and it cannot take recourse to an order under section 139(9) which for all intents and purposes was a closed chapter when a notice under section 143(2) was issued by the Assessing Officer. At this juncture, it may be noted that though the order is titled as one passed under section 139(9) of the Act we are of the opinion that the said order, in the eyes of law, was an order un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee filed the return of income for the relevant assessment year declaring the total loss of Rs. 2,07,42,000 and brought forward losses of Rs. 1,30,22,140. The effect of treating the return as invalid and non est after issuing of the assessment notice under section 143(2) is that the assessee would not be entitled to carry forward the losses in the subsequent years. The Tribunal has also noticed that in the earlier years also similar returns had been filed. In view of the above discussion we are of the opinion that issuance of notice under section 143(2) of the Act has changed the entire complexion of the matter and the order though passed under section 139(9) would legitimately be termed as an order under section 143(3) and hence it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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