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TMI Blog2018 (12) TMI 1754X X X X Extracts X X X X X X X X Extracts X X X X ..... icipated in the assessment proceedings in response to the notice u/s143(2), then subsequently the assessee cannot take the objection of notice issued u/s 143(2) was not properly served on the assessee. Since it is a case of non-issuance of notice under section 143(2), therefore, the initiation of scrutiny proceedings itself was without jurisdiction conferred by the provisions of section 143 - Decided in favour of assessee. - ITA No. 834/JP/2017 - - - Dated:- 19-12-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For the Appellant : Shri Rajeev Sogani (CA) For the Respondent : Shri A.K. Mahala (JCIT) ORDER PER VIJAY PAL RAO, JM: This appeal by the assessee is directed against the order dated 4th September, 2017 of ld. CIT (A)-1, Jaipur for the assessment year 2009-10. The assessee has raised the following grounds :- 1. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the actions of the ld. AO in reopening the assessment u/s 147 of Income Tax Act, 1961. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has first time raised this ground without explaining the reasons as to why the same was not raised before the authorities below, therefore, the same cannot be accepted at this stage. 4. We have considered the rival submissions as well as the relevant material on record as it is apparent from the additional ground that the assessee has raised the issue of validity of re-assessment passed under section 143(3) read with section 147 of the IT Act without issuing notice under section 143(2) of the Act. Thus the issue raised in the additional ground is purely legal in nature and all the relevant facts for adjudication of this issue are already on record, as no new fact is either required to be investigated or to be verified for the purpose of adjudication of this issue raised by the assessee, then there is no reason as to why the additional ground raised by the assessee should not be admitted for adjudication on merits. Accordingly, in the facts and circumstances of the case and by following the decision of the Hon ble Supreme Court in the case of NTPC vs. CIT (supra), we admit the additional ground raised by the assessee for adjudication. Validity of re-assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of any notice under section 143(2) of the Act. Thus it is clear that the AO did not issue any notice under section 143(2) prior to completion of the reassessment proceedings in the case of the assessee. The Notice under section 143(2) is a mandatory requirement and gives the jurisdiction to the AO to proceed with the scrutiny assessment. Thus the notice under section 143(2) is a jurisdictional condition and in the absence of notice under section 143(2), the order passed by the AO is invalid for want of jurisdiction. The ld. D/R has submitted that the assessee did not file any return of income in response to notice under section 148 of the Act, however, it is not in dispute that the assessee has duly responded to the notice under section 148 and submitted that the return of income filed under section 139 of the Act may be treated as return in response to notice under section 148. Therefore, there is a due compliance on the part of the assessee for filing the return in response to notice under section 148 of the Act. Hence, we do not find any merit or substance in the contention of the ld. D/R. The Hon ble Supreme Court in the case of ACIT vs. Hotel Blue Moon (supra) while consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speaks of subsections which are to be followed by the assessing officer. Had the intention of the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have or could have indicated that also. A reading of the provision would clearly indicate, in our opinion, if the assessing officer, if for any reason, repudiates the return filed by the assessee in response to notice under Section 158 BC(a), the assessing officer must necessarily issue notice under Section 143(2) of the Act within the time prescribed in the proviso to Section 143(2) of the Act. Where the legislature intended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14 August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-sections (2) and (3) of section 143. 17. Section 158BH provides for application of the other provisions of the Act. It reads : Save as otherwise provided in this Chapter, all the other provisions of this Act shall apply to assessment made under this Chapter . This is an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. The provisions which are specifically included are those which are available in Chapter XIV-B of the Act, which includes section 142 and sub-sections (2) and (3) of section 143. 18. On a consideration of the provisions of Chapter XIV-B of the Act, we are in agreement with the reasoning and the conclusion reached by the High Court. Thus the requirement of notice under section 143(2) of the Act is a mandatory condition and cannot be dispensed with. It was also held that the omission on the part of the AO to issue notice under section 143(2) cannot be a procedural irregularity and same is not curable. The ld. D/R has contended that the assessee has participated in the assessment proceedings and did not raise any objection. Therefore, once the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Greater Noida Industrial Development Authority [2015] 379 ITR 14 (All.), wherein it was held as under: Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. 34. The only benefit that Section 292BB obtains to the assessing officer is that after the issuance of such notice the assessee appears and participates in the proceedings, then he shall not he heard, subject to the proviso to the said section, that he had not been properly served with notice. We have no hesitation in holding that the Assessing Officer can claim and avail the benefit under Section 292BB and the assessee will be burdened by the rigour of estoppel contained therein only after a notice under Section 143(2) had been validly issued. When it is virtually admitted that no such notice had been issued, the Assessing Officer loses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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