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TMI Blog2018 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... see : Sh. Salil Kapoor, Sumit Lal Chandani And Ms. Ananya Kapoor, Advs For The Revenue : Sh. G. K. Dhall, CIT DR ORDER Per N. K. Saini, AM: The appeals by the assessee are directed against the separate orders each dated 15.10.2010 passed by the AO u/s 143(3) r.w.s. 144C(5) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for the assessment years 2004-05 and 2005-06 and another appeal is against the order dated 28.09.2012 for the assessment year 2005-06 passed by the AO u/s 154 of the Act. 2. Since, the appeals were heard together, so, these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. At the first instance, we will deal with the appeal in ITA No. 5163/Del/2010 for the assessment year 2004-05. Following grounds have been raised in this appeal: 1. That the notice issued U/s 148 is illegal, bad in law and without jurisdiction and the reassessment order passed is also illegal, bad in law, without jurisdiction and liable to be quashed. 2. There is no escapement of income as the earlier assessment was completed U/s 143(3) after considering all relevant material and facts. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide letter dated 17.07.2017: 11. That without prejudice, the income has been wrongly computed as the reimbursement of expenses has also been treated as fees for technical services and tax thereon has been wrongly and illegally charged on the total amount. 5. The main grievance of the assessee relates to the validity of the assessment framed u/s 143(3) of the Act on the basis of the notices issued u/s 143(2) of the Act much before the service of notice u/s 148 of the Act. 6. Facts of the case in brief are that the assessee filed the original return of income on 31.10.2004 declaring an income of ₹ 74,23,837/- which was processed u/s 143(1) of the Act on 05.05.2005. The assessment was completed u/s 143(3) of the Act on 18.12.2006 at an income of ₹ 93,03,655/-. Thereafter, the AO noticed that the income chargeable to tax had escaped assessment as per clause (i) and (ii) of Explanation 2 to Section 147 of the Act. Accordingly, the AO recorded the reasons on 17.03.2009 and notice u/s 148 of the Act was issued on 23.03.2009. The assessee filed the return of income u/s 148 of the Act on 19.11.2009 declaring an income of ₹ 97,66,700/- and also filed the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in issue of notice was not fatal to the assessment made by the AO as provided by the amended Section 292BB of the Act, which says that where the assessee appeared in any proceedings or cooperated in any enquiry relating to an assessment or reassessment it shall be deemed that any notice which was required to be served upon him has been duly served in time in accordance with the provisions of the Act and such assessee will be precluded for taking any objection on this account. The reliance was placed on the decision of the ITAT Delhi Bench in the case of Kuber Tobacco Product reported at 117 ITD 273 (Del.) (SB). Accordingly, the objections of the assessee were rejected. Thereafter, the AO passed the impugned assessment order. 9. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the assessment proceedings were initiated by the AO on the basis of the notice issued u/s 143(2) of the Act much before the service of notice u/s 148 of the Act. It was further submitted that the notice was issued u/s 143(2) of the Act on 08.09.2009 while the return was filed by the assessee in response to the notice issued u/s 148 of the Act on 19.11.2009. Therefore, the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04-05. The assessee is a company incorporated under the laws of United Kingdom. It carries on business of providing consultancy services. In the case of the assessee, assessment order u/s 143(3) of the Act for the A.Y. 2004-05 was passed on 18.12.2006 at the total income of ₹ 93,03,655/- as against the returned income of ₹ 74,23,837/-. During the year, the assessee was Involved in the execution of five projects namely Ahmedabad-Vadodra Project (contract dated 07.08.2000), Srinagar-Nagpur Project, Grand Trunk Project(contract dated 19.03.2002), Panagarh-Palsive Project (contract dated 06.03.2002) and West Bengal State Highways (contract dated 24.05.2002). In the assessment order, receipts from all the projects have been taxed @ 41% on net profit as business income except receipts of West Bengal State Highways Project Receipts from West Bengal State Highways Project have been correctly taxed as per Section 44D r.w.s. 115A. As the receipts from other projects were also of the nature of FTS and effectively connected to the PE (i.e. Project Offices) of the assessee, the provisions of Section 44D r.w.s.115A should have been applied upon those receipts. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I, therefore, propose to assess/reassess the income for the said Assessment Year and I hereby require you to deliver to me within 30 days from the date of service of this notice, a return in the prescribed form of your Income, In respect of which you are assessable for the said assessment year. This notice is being issued after obtaining the necessary satisfaction of the Addl. Director of Income Tax, Range-1, International Taxation, New Delhi. Yours faithfully, Sd/- ( NISHTHA TIWAR1) Assistant Director of Income Tax Circle-1(2), International Taxation, New Delhi. 13. It is also noticed that the AO issued the notice u/s 143(2) of the Act on 08.09.2009, copy of which is placed at page no. 41 of the assessee s paper book which read as under: Sir/Madam, There are certain points in connection with the return of income submitted by you for the Assessment Year 2004-05, on which I would like some further information. 2. You are hereby required to attend my office on 24.09.2009 at 3.15 PM either in person or by a representative duly authorized in writing in this behalf or produce or cause there to be produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the return filed in response to the notice u/s 148 of the Act. Therefore, prior to the issuance of notice u/s 143(2) of the Act on 12.10.2011, there was no valid return of income filed by the assessee in response to the notice u/s 148 of the Act. 10. On a similar issue the Hon ble Jurisdictional High Court in the case of DIT Vs Society for Worldwide Inter Bank Financial Telecommunications (2010) 323 ITR 249 (supra) held as under: that in the memorandum of appeal, the Revenue had stated that the return was filed by the assessee on March 27,2000 and the notice under section 143(2) was served upon the authorized representative of the assessee by hand when the authorized representative of the assessee came and filed return and that the date of the notice was mistakenly mentioned as March 23,2000. Even if it was true, the notice was served on the authorized representative simultaneously on his filing the return which clearly indicated that the notice was ready even prior to the filing of the return. The provisions of section 143(2) make it clear that the notice could only be served after the Assessing Officer had examined the return filed by the assessee. Thus, even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, it does not obviate the mandatory requirement of the Assessing Officer having to issue to the assessee a notice under section 143(2) of the Act before finalizing the order of reassessment. A reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by 13 the Assessing Officer to the assessee under section 143(2). The requirement of issuance of such notice is a jurisdictional one. It does go to the root of the matter as far as the validity of the reassessment proceedings under section 147/148 of the Act is concerned. Section 292BB was inserted in the Income-tax Act, with effect from April 1, 2008. It talks of the drawing of a presumption of service of notice on an assessee and is basically a rule of evidence. It introduces a fiction that once the assessee appears in any proceeding or has cooperated in any enquiry relating to assessment or reassessment it shall be deemed that any notice under any provision of the Act that is required to be served has been duly served upon him in accordance with the provisions of the Act and the assessee in those circumstances would be precluded from objecting that a notice that was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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