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TMI Blog2019 (3) TMI 1811X X X X Extracts X X X X X X X X Extracts X X X X ..... invalid. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s ABC' (seized material) had been found from the possession and control of Shri Vishwa Nath Gupta. b) Wherever the name of Dolphin Developers Ltd. (the appellant here) appeared in the said books of account the same were exclusively referable to the gains and losses of Sri Vishwa Nath Gupta alone in his individual capacity; and c) the entries/transactions appearing in the books of M/s ABC had nothing to do with the affairs of M/s Dolphin Developers Ltd. (the appellant here) and the averments so made in the sworn statement having not been rebutted, nor even put to cross examination, the authorities below could not have made addition/uphold addition on account of entries appearing in the said seized material. 6.1 BECAUSE the authorities below have erred in law and on facts in making/sustaining addition for sums aggregating ₹ 35,02,27,426/- made up as under:- i) cash alleged to have been received in the form of 'on-money' 30,96,27,426 ii) cash alleged to have been paid to Sri Aditya Raj Maheshwari, CA. for getting accommodation entries 4,06,00,000 to the income of the appellant on the basis of seized material referred to above. 6.2. BECAUSE there were no such su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2) of the Act. It was also observed and held in the same case that A.O has the basic jurisdiction to assess the income u/s. 147 and 148 of the Act. Similar view is also observed by the Hon'ble Madras High Court in the case of Areva T&D India Ltd. Vs ACIT (Mad.) 294 ITR 233. The cases relied upon by the Ld. AR are on their own footings; and distinguishable on facts and are not applicable to the present case. Therefore, in view of the above, legal objection of the appellant is rejected and dismissed." 4. In the proceedings before us, Shri Raghu Nath Gupta, one of the promoters of the assessee company, had filed an affidavit, in which also, the same grievance had been raised. This affidavit is at APB: 1-12 of the paper book. The assessee has also filed a copy of A.O's order sheet notings. The order sheet noting dated 5/2/2016 (APB:168) reads as follows:- "Notice u/s 142(1) issued for compliance on 11/2/2016 along with questionnaire." This order sheet noting is also scanned and reproduced here, for ready reference: (stress, by way of asterisk, supplied) 5. The Department has filed a reply to the aforesaid affidavit of the assessee. This has been placed in the appeal file. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department. Further, even in the assessment order, in para 4 thereof observed that "It is needless to mention that submitting a letter like this (in response to notice under section 148) amounts to filing of "return" in due compliance with the notice under section 148". The ld. CIT(A) has also duly taken into consideration the non-service of notice, when in the impugned order, in the above quoted para 5.5 thereof, the ld. CIT(A) has observed that 'As regard of the issue of the notice u/s. 143(2) of the Act, it is stated that this will not invalidate the proceeding u/s. 147 of the Act, as proper notice u/s. 148 is issued by the A.O………..'. From this, it is evident that the ld. CIT(A) has himself accepted the nonservice of the notice on the assessee. Thus, the averment made by the Department before us in its reply (supra) to the affidavit is misconceived as being against the record. 11. The issue is as to whether non-service of notice under section 143(2) of the Act is detrimental to the validity of the assessment proceedings under section 147 of the Act. The ld. CIT(A) has relied on 'CIT vs. Madhya Bharat Energy Corporation Ltd.' 337 ITR 389 (Del) and 'Arev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lip;……………………………………………… ……………………………………………………………………………………………. 12. As far as the contention of the Revenue that failure to issue notice under Section 143(2) of the Act is only curable defect is concerned, the decision relied on by the assessee reported in Hotel Blue Moon's case (supra), also covers the said issue. It is no doubt true that the said decision dealt with the assessment done under Chapter XIV relating to block assessment. The assessee therein raised a contention that the failure to issue notice under Section 143(2) within the prescribed time for the purpose of block assessment could be fatal to the validity of the assessment made under Chapter XIVB of the Income Tax Act, 1961. In other words, the assessee contended that the issuance of notice under Section 143(2) within the prescribed period of time for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions under Sections 142 and 143 (2) and (3) strictly for the purpose of block assessment, the Apex Court held that in completing the assessment, when the officer repudiates the return filed under Section 158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142 and 143 (2) and (3) of the Act." 14. The above position has been taken into consideration in 'Pr. CIT vs. Oberopi Hotels Pvt. Ltd.', order dated 22/6/2018 passed by the Hon'ble Calcutta High Court in ITA No.152 of 2015, as follows:- "The Revenue has sought to rely on a Madras High Court judgment reported at 294 ITR 233 (Areva T & D India Ltd. v. ACIT) where the view taken was that "the non-issuance of a notice under section 143(2) of the Act, will not make the reassessment nullity in law, which is validly initiated under section 148 of the Act". However, such judgment of the Madras High Court was noticed and discussed in a later judgment of the same reported at 2010 Taxman 78 (Sapthagiri Finance & Investments v. ITO). It was held therein that the view taken in Areva T & D India Ltd was no longer good law in view of the Supreme Court judgment in Hotel Blue Moo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with regard to income escaping assessment; that thus, after receipt of return in response to notice u/s 148, it is mandatory for the A.O to serve a notice u/s 143(2), assigning reasons therein; and that in the absence of a notice u/s 143(2) after receipt of fresh return, the entire procedure adopted for escaped assessment shall be invalid. "Shri Rajeev Sharma (supra) has been followed in "UPSIDC vs. CIT", rendered, again, by the Hon'ble Jurisdictional High Court, in ITA No. 11/2015. "Shri Rajeev Sharma" (supra) and "UPSIDC" (supra), therefore, are squarely applicable to the present case. Hence, in keeping with the provisions of the Act, as considered hereinabove and in accordance with "Shri Rajeev Sharma" (supra) and "UPSIDC" (supra), both rendered by the Hon'ble jurisdictional High Court, to both of which, no contradictory decision has been cited, we hold that since the assessee had, in the reassessment proceedings, requested the A.O to treat the original return filed as a return filed in the reassessment proceedings, and that this being so, it was incumbent on the A.O to issue and serve a notice u/s 143(2) to the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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