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TMI Blog2018 (6) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... days is hereby condoned and appeal memos are admitted to be heard. 2. The issue in these appeals is whether notice u/s. 143(2) of the Income Tax Act [Act] was issued within time or not for selection of scrutiny, in these batch of appeals. 2.1. Briefly stated, there were survey proceedings u/s. 133A of the Act conducted on 26-10-2010 at the premises of M/s. Red Rose group of cases. These group of assessees are running various businesses and notice u/s. 148 of the Act was issued on 24-11-2011, after recording the reasons. Assessees filed letters requesting the AO to treat the returns originally filed as return in response to notice u/s. 148. Thereafter, assessees were directed to get their accounts audited u/s. 142(2A) of the Act by the Addl. CIT, Range-9, Hyderabad, vide letter dt. 27-12-2011 and M/s. Jawahar & Associates were appointed as special auditors for this purpose. Assessees herein filed writ petitions challenging the above direction before the Hon'ble High Court of Andhra Pradesh. The Hon'ble High Court stayed further proceedings vide order dt. 23-02-2012. The Hon'ble High Court finally disposed-of the writ petitions vide order dt. 23-01-2014, wherein the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the prescribed time limit and the assessment proceedings are time barred and void ab-initio. However, AO passed the order u/s. 143(3) r.w.s. 147 on 31-10- 2014 by making various additions in each of the assessments. 5. Before Ld CIT(A), Assessees have raised objections on merits and also filed additional grounds on the issue of notice u/s. 143(2). According to assessees, the notices were not issued within time as prescribed and relied on various case law as reported by the CIT(A) in para 5.2 of the order. The matter was remanded to AO, who in turn relied on various other case law to justify the proceedings. Subsequently, Ld.CIT(A) consolidated the facts and gave the order holding that the assessments are bad in law on the reason that no notice u/s. 143(2) was issued within the prescribed time limit and therefore, the orders were quashed. His order in para 7 onwards is as under: (For the sake of record, the order in the case of Shri Syed Irfanuddin in ITA No. 568/Hyd/2016 for the AY. 2007-08 is reproduced). "7. The submissions of the assessee and the remand report of the Assessing Officer are considered. The following factual matrix arises for consideration: i) The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard, it is seen that the implication of non issuance of notice u/s 143(2) within the time limits prescribed after the assessee has filed his return of income is no more res-integra as this has now been settled by the Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon reported in 321 ITR 362. The law as laid down is that once the assessee has filed his return of income, the notice u/s 143(2) have to be served upon the assessee within the time period prescribed in proviso to section 143(2). If such a notice is not served within the statutory time prescribed in the proviso to section 143(2), the entire assessment order becomes null and void. Such an issuance and service of notice is not a mere procedural irregularity but it is a mandatory requirement which has to be complied with. The Hon'ble Allahabad High Court in the case of CIT vs. Rajeev Sharma reported in 336 ITR 678 after considering the series of judgments on this issue including that of the Hon'ble Supreme Court in the case of Hotel Blue Moon (supra) has held that where statute provides for a particular procedure, the authority has to follow the same and they cannot be permitted to act in contrav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue has raised originally the following grounds, which are common in all the appeals: "(1) The order of the learned CIT(A) is erroneous in law and on facts. (a) The learned CIT(A) erred in holding that the assessment order passed u/s.143(3) r.w.s.147 dated 31.10.2014 is invalid for the reason that no notice u/s.143(2) was issued within the prescribed time limit. (b) When the special audit u/s.142(2A) was ordered by the Assessing Officer on 27.12.2011, the assessee challenged the action of the Assessing Officer by filing a writ petition before the Hon'ble High Court of Andhra Pradesh. (c) The Hon'ble High Court vide their order dated 23.02.2012 granted interim stay of further proceedings in the matter; (d) The special audit could be completed in the case only in June 2014. (e) Hence under the facts and circumstances of the case, when the circumstances are squarely covered by clause (iii) of the Explanation to Section 153 of the I.T. Act, whether the CIT(A) is correct in holding that notice u/s.143(2) was not issued within the prescribed time?" Ground No. 2 is general in nature. 7. Revenue also raised additional grounds which are as under: "1) The Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see after the expiry of twelve months from the end of the month in which the return is furnished" i.e., 12 months from 01-01-2012 to 31-122012. 12 Months (From 29-12- 2011 to 31-12-2012) 5 Interim order of AP HC - Dtd. 23-01-2014 decision as "We are unable to accept the contention of the learned counsel for the respondents, and accept the contention of the learned counsel for the petitioners that in this case personal hearing is required. We therefore set aside the impugned communication and direct the 1st respondent to hear the petitioners each of them by fixing the dates. ................in the event appearance is made, after hearing the 1st respondent shall pass a speaking order. This entire exercise shall be completed within a period of 4 weeks from the date of communication o this order" 23-01-2014 6 The A.P. Hon'ble High Court vide orders dtd. 10-06-2014 directed the department to complete the assessment as per law. 10-06-2014 7 Date of issue and Service of Notice u/s. 143(2) and Notice u/s. 142(1) within time specified as per the provisions of Sec. 143(1)(ii) 7-10-2014 8 Assessee's reply notice 13-10-2014 9 Asst. order passed on 31- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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