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TMI Blog2020 (1) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... indirectly proves that the assessee, in fact, has filed the letter stating that the return filed originally may be treated as return filed in response to notice u/s 148, therefore, we hold that the assessment order passed by the Assessing Officer is not in accordance with law and has to be quashed. The legal ground raised by the assessee challenging the validity of the assessment order is accordingly allowed. Decided in favour of assessee. - ITA No.6485/Del/2019 - - - Dated:- 29-11-2019 - Shri R.K. Panda, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Assessee : Shri Dr. Rakesh Gupta, Advocate, Shri Kailash Mittal, Advocate, Shri Priyansh Jain, CA Shri Deepesh Garg, Advocate For the Revenue : Ms Ratchi Bimal, Sr. DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 27th June, 2019 of the CIT(A)-34, New Delhi, relating to assessment year 2011-12. 2. Facts of the case, in brief, are that the assessee company is a Joint Venture between Flovel India and MECAMIDI SA, France. It provides all inclusive solut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,85,28,300/- b) Unaccounted scrap - ₹ 13,85,556/- c) Excess payment over and above debited in the P L A/c - ₹ 6,77,918/- 3. Before the CIT(A), the assessee, apart from challenging the addition on merit, challenged the validity of the reassessment proceedings and also challenged the validity of the assessment on the ground of non-issuance of notice u/s 143(2). However, the ld.CIT(A) dismissed the appeal filed by the assessee and upheld the validity of the reassessment proceedings as well as the validity of assessment on account of non-issuance of notice u/s 143(2). So far as the order of the CIT(A) dismissing the ground raised by the assessee on account of non-issuance of notice u/s 143(2) is concerned, he rejected the same by observing as under:- 6.3 I have considered the facts of the case, finding of the AO, remand report and submission of the appellant. The appellant has objected the initiation of reassessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned reassessment order and that too without assuming jurisdiction as per law and without complying the statutory conditions as stipulated u/s 147 to 151 of Income Tax Act, 1961, more so when passing of four weeks was not allowed to the assessee after disposal of objections before passing the assessment order. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned reassessment order u/s 147/143(3) even though no notice u/s 143(2) has been issued/served within the statutory allowable period as per law and by recording incorrect facts. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making disallowance of ₹ 1,85,28,300/- on account of business procurement expenses and that too by recording incorrect facts findings and by disregarding the submissions, evidences and material placed by the assessee and in violation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its reply dated 23rd March, 2015 that the return filed earlier be treated as return in response to notice u/s 148. He submitted that both the letters were sent through speed post. The letter for assessment year 2010-11 was posted on 23rd March, 2015 with receipt No.EH600331750IN, copies of which are at paper book page 200 and 201. Similarly, copy of the receipt for the letter posted on 23rd March, 2015 with postal receipt No.EH600331746IN is at page 40 and 41 of the paper book for A.Y. 2011- 12. Referring to the copies of the letter to the Assessing Officer dated 29th February, 2016, he submitted that it was replied by the assessee that the return had already been filed on 23rd March, 2015. The letter for assessment year 2010-11 is placed at pages 202 to 204 whereas the letter for assessment year 2011-12 is placed at paper book pages 93 and 94. He submitted that the assessee, vide reply dated 9th March, 2016 had submitted that the return had already been filed on 23rd March, 2015. The copy of such letter for assessment year 2010-11 is placed at pages 205 to 207 and for assessment year 2011-12, the same is placed at paper book page 95. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even in reassessment proceedings and absence of issue of notice within the statutory period makes such assessment invalid and bad in law:- i) Mrs. C. Malathy vs. ITO (2004) 89 TTJ 938 (Chennai); ii) B.D. Gupta vs. Dy. CIT (2004) 90 TTJ 915 (Agra); iii) ACIT vs. Hotel Blue Moon (2010) 321 ITR 362 (SC); iv) Raj Kumar Chawla vs. ITO (2005) 94 ITD 1 (Del-Trib); v) ACIT vs. Greater Noida Industrial Development Authority (2015) 379 ITR 14 (All); vi) CIT vs. M. Chellappan (2005) 281 ITR 444 (Mad); vii) ITO vs. DLG Enterprises (2011) 53 DTR 65 (Lkw-Trib); viii) ACIT vs. Kalyan Janata Sahakari Bank Ltd. (2015) 128 DTR 136 (Mum-Trib); ix) Alpine Electronics Asia (P) Ltd. vs. DGIT (2012) 341 ITR 247 (Del); x) ACIT vs. Ashed Properties Investments Pvt. Ltd. (2015) 62 taxmann.com 340 (Bangalore-Trib) 8. Referring to the following decisions, he submitted that the return filed after the expiry of given time prescribed in notice u/s 148 is also a valid return:- i) Late Janak K. Kansara vs. DCIT (2008) 116 TTJ 415 (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vey and no incriminating material was found. So far as the excess payment of interest is concerned, he submitted that the assessee is paying 12% interest per annum to the loan creditors which has been debited in the P L Account and the Revenue, merely on the basis of presumptions and surmises, is adopting such interest @ 36% per annum. He accordingly submitted that even on merit the addition so sustained by the CIT(A) should be deleted. 13. The ld. DR, on the other hand, strongly challenged the arguments advanced by the ld. counsel for the assessee and heavily relied on the order of the CIT(A). She submitted that the non-issuance of notice u/s 143(2) was never raised before the Assessing Officer during the course of assessment proceedings. Further, there was no reason for keeping the orders for both the assessment years together since the facts of this year are different from that of the preceding assessment year inasmuch as in the preceding assessment year the reply filed by the assessee was traceable whereas for the impugned assessment year such reply is not on the records of the Department. Referring to the decision of the Hon'ble Delhi High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR is accepted for a moment, then, it has to be held that the assessee has filed the reply in response to notice u/s 148 which is evidenced by the speed post receipt. Therefore, the order of the Tribunal for the preceding assessment year has to be followed and the assessment order has to be quashed for non-issuance of notice u/s 143(2). Referring to the decision of the Hon'ble Calcutta High Court in the case of Mayadevi Bansal vs. CIT, reported in 117 ITR 125, he submitted that the proposition laid down by the Hon'ble High Court is that in absence of non-filing of the return, assessment has to be completed u/s 144. It has further been held that even if the return has been filed in a wrong form, the assessment cannot be made u/s 143(3) and it has to be passed u/s 144 of the Act. Therefore, the Assessing Officer, in the instant case, having not passed the assessment order u/s 144, the inevitable conclusion is that the assessee has filed the return in response to notice u/s 148 of the IT Act. It has been held in various decisions that in terms of section 27 of the General Clauses Act, if a notice is properly addressed and dispatched through registered post, there is a presumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had filed the reply before the same Assessing Officer on the same date and the assessment order was also passed by the same Assessing Officer on the same date, the order disposing of the objections filed by the assessee is also on the same date and the order of the CIT(A) was also passed on the same date for both the assessment years, therefore, it cannot be said that the assessee has filed the reply only for assessment year 2010-11 stating that the return filed originally may be treated as the return filed in response to the notice u/s 148 and no such reply was filed for assessment year 2011-12. 16. We find some force in the arguments advanced by the assessee. A chronology of dates for both the assessment years shows that the notice u/s 148 was issued on the same date, the objection of the assessee for such reopening was disposed of by the Assessing Officer by passing a speaking order on the same date, the reassessment orders for both the years were passed on the same date and the CIT(A) also has passed the appellate orders for both the years separately on the same date. Therefore, it cannot be said that the assessee has filed the reply for treating the earlier re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the material available on record. We find that the judgment of Broadway Shoe Co . 99 Taxmann 83 relied by the ld. DR i s not applicable to the facts of the case as in that case the assessee has not filed a return in response to the notice issued u/s 148 of the Act whereas in the instant case, the assessee has filed return u/s 139(1) of the Act in regular course and al so replied to the notice that the return filed by them on 15.10.2010 may be treated as returned filed in response to the notice u/s 148 issued on 09.01.2015. Under such circumstances, it is incumbent upon the Assessing Officer to issue notice u/s 143(2) within the time stipulated as per the provisions of the Act which he failed to observe. Hence, keeping in view the judgment o f Jurisdictional High Court in the case of Alpine Electronics Asia Pvt. Ltd. 341 ITR 247 wherein the judgment of Hotel Blue Moon 321 ITR 362 (SC) has been duly referred to, we hereby hold that omission to issue notice u/s 143(2) is not curable and the requirement cannot be dispensed with. It is mandatory to issue notice u/s 143(2) even in the case of reassessment u/s 148. Similarly, Section 292BB incorporates the principle of estoppel and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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