9911796707
TMI Blog2022 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... void and deserves to be annulled. Even otherwise we do not find any reason and material to controvert the findings of the Ld. Commissioner and therefore are not inclined to interfere with the impugned order consequently, the appeal filed by the revenue department stands dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... and its clear circulation of funds between two societies in the form of unsecured loan and repayment which resulted into difference between loan amount of Assessee society and patronage welfare and educational society. Further the original bills and vouchers were not presented by the Assessee and the expenses claimed of Rs. 38450457/- by the Assessee is not supported by original bills and vouchers for verification. 4.3 Ultimately, the AO vide Assessment order dated 28-03-2013 passed u/s 143(3) of the Act, made the additions of Rs. 38450457/- (3,55,71,267 + 28,79,190) on account of difference between original and revised balance sheet and Rs. 15 lakhs on account of cash withdrawn and also held "that the activities of the society are not in accordance with its objects and accordingly, the Assessee society is not entitled for the claim of exemption u/s 11 of the Act and accordingly it is denied. A proposal for withdrawal of registration u/s 12AA has been moved separately to DIT(Exemptions) as the organization can no longer be regarded as a charitable organization within the meaning of provision of section 2(15)." For brevity and ready reference, the concluding part of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawal is being added to your total income for the year. 4. Original bills and Vouchers not presented and Poor maintenance of Books Of Accounts:- The expense claimed of Rs. 3,84,50,457/- by the assessee is not supported by original bills and vouchers for verification. These expenses have not been accounted for in the books of accounts and no valid explanation for incorrect recording of accounts have been given by the assessee. The assessee has claimed that the original bills and voucher are with the bank for the taking the term loan from Central bank of India, but his claim has also not been supported by any letter or explanation from the Bank authorities. In absence of documentary' evidence for the expense incurred and not reflected in the original Audited accounts arc being added to the total income of the assessee. 5. Therefore, from the activities of the assessee vis-a-vis its objects, it is held that the activities of the Society are not run, in accordance with its objects and accordingly, the assessee Society is not entitled for the claim of exemption u/s 11 of the I.T. Act and accordingly it is denied. A proposal for withdrawal of registration u/s 12AA has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2009-10 in which various inconsistencies were noted. It was also noted that the books of account of the assessee were re-audited from assessment year 2005-06 onwards but were not submitted to revenue till the time the inconsistencies were recorded. Further, in response to notice under section 148, return was not submitted within 30 days from the date of the notice and the assessee failed to file the return on time. The return filed on 12/10/2012 was declared to be non-est. Further, it was noted that the explanation given by the assessee about the difference in the amounts as per the original return & accounts and as per the re-audited accounts was unacceptable since no reason for not maintaining the books of account correctly has been given by the assessee. It was also noted that no explanation has been given regarding transfer of fund between die assessee society and the Patronage Society, which was a specified person within the meaning of section 13(3). No vouchers were presented, and the books of accounts were maintained poorly as a result of which expense incurred and not reflected in the original audited accounts were added to the total income. It was held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposits amounting to Rs. 15,00,000/- which were ignored by the Assessing Officer. Copy of bank statement has been given in support of the contention. From the copy of the said statement, it is seen that there are indeed cash deposits subsequently but, in this regard, again the appellant has failed to establish that the source of the cash for the subsequent deposits made was from the cash withdrawal. In absence of any satisfactory explanation, the addition of Rs. 15,00,000/- is sustained. 4.1.6 As regards the issue of treating the assessee as an AOP, it is apparent from the facts and circumstances of the case the activities of the assessee were not run in accordance with its objects and there is no satisfactory explanation for mismanagement of funds since the books of account were maintained poorly and none of the expenditure incurred was verifiable. In view of this the finding of the Assessing Officer that the society' was not entitled for the claim of exemption cannot be faulted. It is to be noted that even besides the issue regarding loan from the Patronage Society on the basis of which the Assessing Officer has invoked the provisions of section 13, which in turn is a tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment framed in response to the said notice is also bad in law. 2. That the Ld. AO has erred in holding that the return filed on 12.10.2012 in response to notice u/s 148 after specified time limit of 30 days is non-est particularly considering the facts that the order u/s 147 was passed on 28.03.2013. 3. That the Ld. AO has erred in framing assessment u/s 148 read with section 143(3) after treating the return filed in response to notice u/s 148 on 12.10.2012 as nonest. 4. That the reasons recorded and the reopening u/s 148 is bad in law since, no proper approval as required in section 151 has been obtained. 7. Ld. AR on behalf of the Assessee, though argued the case on merits however emphasized on the additional grounds of appeal as legal grounds and submitted that notice issued u/s 143 (2) on dated 01.05.2012 is bad in law and consequential assessment framed in response to the said notice in un-sustainable and assessment framed u/s 148 read with section 143(3) after treating the return filed on dated 12.10.2012, in response to notice u/s 148 of the Act, as non-est, is unwarranted and liable to be set aside as it is settled law that notice u/s 143(2) of the Act is not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 9.4 The Hon'ble Supreme Court in ACIT v. Hotel Blue Moon (2009) 321 ITR 362, has laid down the dictum that the requirement to issue notice under Section 143(2) is mandatory and non-issuance of notice is not a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. 9.5 As relied by the Assessee, Hon'ble Gujarat High Court in the case of Pr. CIT Vs. March Bio-schences Ltd (2019) 106 taxmann.com 399 (Gujarat), while dealing with the situation where the assessment order was passed without issuance of valid notice u/s 143(2) of the Act after filing of return of income, has held that section 143read with section 292 BB of the Act on non-issuance of notice u/s 143(2) is not a procedural irregularity and same cannot be cured u/s 292 BB of the Act. Notice issued u/s 143(2) of the Act to the Assessee prior to filing of return of income, being invalid notice and assessment order passed in pursuance to the notice deserves to be set aside. 9.6 Hon'ble High Court of Bombay in the case of ACIT, Circle-2(1) Vs. Geno Pharmaceuticals Ltd (2013) 32 taxmann.com 162 (Bombay) approved the view of the ITAT where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished. S.no. 1. No remand report was passed by this office. S.no. 2. No rejoinder was filed by the assessee. S.no.3. No notice u/s 143(2) of the I.T Act was issued subsequent to the submission of ITR filed by the assessee in response to notice u/s 148 of the I.T Act. However, notice u/s 142(1) of the Income Tax Act, was issued on 19.08.2008 & 24.11.2008 which was served on 21.08.2008 & 28.11.2008 respectively." 9-11……………………………………..…………………………………… …………………………………………………………………………… …………………………………………………………………………… ……………………& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s 144 of the Act, meaning thereby the AO has proceeded with the return filed in response to the notice u/s 148 of the Act and therefore we are of the considered view that on acceptance of the revised return of income filed by the Assessee on dated 12-10-2012 in response to the notice issued on dated 27-03-2012 u/s 148 of the Act and before framing the Assessment against the Assessee on dated 28-03-2013, as per the provisions of the Act, the AO was under obligation to issue the notice u/s 143(2) of the Act, which the AO has failed to do, hence we are inclined to quash the assessment order on this count itself. Thus ordered accordingly. 9.13 Since we have quashed the assessment order on additional ground no. 1 itself, hence no useful purpose is going to be served while deciding other grounds raised by Assessee including on merits, as the same have become infructuous, hence we are not proceeding to decide the same. 10. In the result, both the appeals i.e. ITA nos. 7598 & 7599/Del/2018 filed by the Assessee stands allowed. ITA No. 166/Del/2015 (Filed by Revenue) (Assessment Year 2007-08) 11. In this case, brief facts of the case relevant for adjudication of the instant appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return on 27/03/2008for a.y 2007-08. Copy of roi filled is enclosed. So notice u/s 142/143(1) should be issued by 31/03/2009 so this notice is time barred and no assessment can be made. Prayed Accordingly, Submitted on behalf of the Assessee. " 7.6. It is further noticed that the AO vide letter F.No. ADIT(E)TCII/ AAAT14207R/09- 10/425 dt. 20.11.2009 replied the objection of the appellant as under: "However subsequently Shri Jeevesh Krishna, filed an objection stating that the issue of the notice u/s 143(2) dated 12.08.2009 was barred by limitation. The objection is not sustainable on the following grounds. 1. The proceeding was initiated vide issue of notice u/s 143(2) dated 30.07.2008. The notice was issued to the society at its registered address at B-19, Defence Colony, New Delhi. This address was mentioned as your registered address in you return dated 27.03.2008. This address is also the address available in the PAN records maintain by the Department. This information is confirmed from the copy of registration under Societies Registration Act and Registration order u/s 12A of the I T. Act. Subsequently another notice u/s 143(2) was issued to the same add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh issued within 12 months but served after the expiry of 12 months from the end of the month in which the return was furnished is invalid and the assessment completed on the basis of such notice cannot be sustained. In the case of Dy. CIT vs. National Refinery (P) Ltd. (2010) 134 TTJ 109 / 38 SOT 36 / 45 DTR 325 (Munu)(Trib.), it was held that: Assessing officer had issued notice under section 143(2), after expiry of twelve months from the end of month in which return was filed, notice issued was barred by limitation and therefore, assessment made in pursuance of said notice was quashed. In the case of Dy. CIT vs. Maxima Systems Ltd. (2010) 40 DTR 49/236 CTR 443 (Guj.), it was held that: Notice having been served after the expiry of 12 months from the end of the month in which the return is furnished, Assessing Officer had no jurisdiction to frame the assessment. In the case of CIT vs. PaiVaibhav Hotels (P) Ltd. (2010) 42 DTR 121 (Kar.), it was held that: Omission on the part of the assessing authority to issue notice under section 143(2), within prescribed time cannot be a mere procedural irregularity and the same not curable, as the notice under section 143(2), was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to of passing assessment order dated 23.012.2009 u/s 143(12) of the ACT. The notice u/s 143(2) was supposed to be issued by 31/03/2009, however the same was issued to the Assessee only on dated 12/08/2009 and therefore the same was held as barred by limitation by the Ld. Commissioner. As the provisions of section 139 read with section 143 of the Act, mandates issuance of notice u/s 143(2) of the Act and also held by us in the ITA nos. 7598 & 7599/Del/2018 that issuance of notice u/s 143(2) of the Act is mandatory before passing assessment order against the Assessee, therefore we have to see as to whether in this case, the notice u/s 143(2) of the Act was issued and served upon the Assessee by the AO with the time prescribed by law. 13.1 Before the Ld. Commissioner, the Assessee challenged the assessment order on merit as well as on legal grounds and mainly focused that assessment order has been passed without serving statutory notice u/s 143(2) of the Act within statutory period. Though the AO in the assessment order mentioned that notice u/s 143(2) was issued to the Assessee on 30.07.2008 however, no such notice was ever issued by the AO within the time barring period. The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 30.07.2008. The ld. Commissioner found the enclosed copy of the notice dated 30.07.2008 is nothing but unsigned copy of notice u/s 142(1) only. Even the unsigned copy of the notice u/s 143(2) of the Act does not find place neither as enclosure of the AO's letter nor anywhere in the assessment record. Ultimately, the Ld. Commissioner held that statutory requirement of section 143(2) has not been complied with and consequently, assessment finalized on the basis of subsequent notice dated 143(2) dated 12.08.2009 which is barred by limitation and held to be null and void. 14.6 We find that the Ld. Commissioner thoroughly considered the factual positions of the case and even examined the assessment record and also called for the comments of the AO and thereafter only came to the conclusion, on which we are having concurrence that no notice u/s 143(2) was served upon the Assessee within the statutory period prescribed in the Act and notice u/s 143(2) issued on dated 12.08.2009 is time barred and no assessment can be made on such notice and consequently the Assessment order held to be null and void and deserves to be annulled. Even otherwise we do not find any reason and material t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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