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TMI Blog2023 (9) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, this is not curable defect u/s 292BB. Thus reassessment order passed u/s147 r.w.s 143(3) was bad in law since the required notice under Section 143(2) of the Act not issued by the Assessing Officer which is prerequisite and mandatory under the provisions of Income Tax Act, however the assessment have been completed without issuing of the impugned notice. Decided in favour of assessee. - Shri Ravish Sood, Judicial Member And Shri Arun Khodpia, Accountant Member For the Appellant : Shri S. R. Rao, Adv. For the Respondent : Shri Satya Prakash Sharma, Sr. D.R. ORDER PER ARUN KHODPIA, ACCOUNTANT MEMBER: This captioned appeal along with Cross Objection filed by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-3, Bhopal for Assessment Year 2010-11 dated 12.07.2021, arose out of the order of Learned Assistant Commissioner of Income-tax (Central), Bilaspur under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal, Learned AO issued notice under Section 148 of the Act dated 17.03.2017 advising to assessee to file the return in the prescribed form for the aforesaid assessment year. In response to this notice, the assessee requested for extension of time to file the return. Later on, a notice under Section 142(1) of the Act dated 19.04.2017 was issued to the assessee but no response was received from the assessee. The case of the assessee was later on transferred from ACIT, Circle 2, Raipur to ACIT (Central), Bilaspur, Chhattisgarh. Again, a notice under Section 142(1) dated 09.10.2017 was issued fixed the case for hearing on 13.10.2017. In response, the assessee requested to extend the date of hearing. Subsequently, a letter dated 24.10.2017 was issued on the assessee to produce the required documents regarding post search and seizure fixing the case for hearing on or before 01.11.2017. In response to this notice, assessee replied vide letter dated nil that the return filed originally under Section 139 vide Ack. No.171138351141010 dated 14.10.2010 may be treated as return filed in response to the notice under Section 148 of the Act. It is also stated that the amount of Rs. 8,98,300/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2017 was bad in law since the required notice under Section 143(2) of the Act not issued by the Assessing Officer which is prerequisite and mandatory under the provisions of Income Tax Act, however the assessment have been completed without issuing of the impugned notice. In support of its contention, Learned AR of the assessee placed reliance on the case of Hon ble Apex Court reported in the case of Commissioner of Income tax vs. Laxman Das Khandelwal dated 13.08.2019 reported in 2019 (8) TMI 660 Supreme Court, wherein a question about legality of the assessment was raised by the assessee that; (1) Whether on the facts and in circumstances of the case the issuance of notice under Section 143(3) of the Income Tax Act, 1961 within the prescribed time-limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory? 6. While discussing this issue and answering the question raised by the assessee, Hon ble Apex Court interrupted the provision of Section 292BB of the Act, regarding valid service of notice was discussed and has observed as under: 6. The question, however, remains whether Section 292BB which came into effect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter. 8. In order to substantiate that no order under Section 143(2) of the Act was issued. Assessee drew our attention to the assessment order wherein no mention pertaining to issue of notice under Section 143(3) of the Act was found. Assessee reiterated and drew our attention to additional Ground No.2 raised before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is incorporated in the compilation of case laws for ready reference. 3.3 Under these circumstances, it is humbly prayed that impugned order may kindly be quashed in the interest of justice. 9. With such submissions Learned AR of the assessee argued that under such circumstances when notice u/s 143(2) was not issued to the assessee, the order issued under Section 147 r.w.s 143(3) of the Act is invalid in accordance with principle of law of Hon ble Apex Court in the case of CIT vs. Laxman Das Khandelwal (supra). Therefore, it was the request that the order under Section 147 of the Act should be quashed on its illegality itself and therefore, no addition made under such order can sustain against the assessee. 10. Against the submissions of the Learned AR of the assessee, Ld Department Representative vehemently supported the order of AO and has assailed that the order of Learned CIT(A) was not justified in deleting the additions of Rs. 1,51,46,200/-, was on error in deciding the issues on merits. However, observations with regard to legal additional grounds of the assessee, the observations of Learned CIT(A) were justified and therefore, on merits the additions made by Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned case:- With the reference to the above subject, Reason of non-issuance of notice u/s 143/2) of the Act in the above mentioned case:- I. A notice u/s 148 of the Income Tax Act, 1961 (hereinafter mentioned as the Act) was issued to the assessee on 17.03.2017 after obtaining approval of the Jt. CIT. In response to the notice, the assessee has not filed its return of income. Then, notice u/s 142(1) of the Act on 19/04/2017 to the assessee for filing of return of income u/s 148 of the Act. In response to the notice, the assessee had requested for short adjournment. Therefore, the assessee was show-cause notice on 28/07/2017 and given further opportunity to file the return on or before 08.08.2017. II. Thereafter, the case was centralized in this Circle vide order dated 26/09/2017 of the Pr. CIT(Central), Bhopal u/s 127 of the Act and the case was transferred in this office on 04.10.2017. Subsequently, notice u/s 142(1) of the Act was issued the assessee on 09.10.2017 and given further opportunity to file return of income on or before 13/10/2017. In response to the notice, the assessee had filed adjournment letter on 11.10.2017 Thereafter, the assessee was issued let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analysis of this sub-section indicates that, after the return is filed, this clause enables the AO to complete the assessment by following the procedure like issue of notice under s. 143(2)/142 and complete the assessment under s. 143(3). This section does not provide for accepting the return as provided under s. 143(1)(a). The AO has to complete the assessment under s. 143(3) only. In case of default in not filing the return or not complying with the notice under s. 143(2)/142, the AO is authorized to complete the assessment ex parte under s. 144. Clause (b) of s. 158BC by referring to ss. 143(2) and 143(3) would appear to imply that the provisions of s. 143(1) are excluded. But s. 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under s. 143 (2). However, if an assessment is to be completed under s. 143(3) r/w s. 158BC, notice under s. 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under s. 143(2) ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed u/s 143(1)(a)of the Act and not notice under sub-section (2) of Section 143) of the Act thereafter is served on the assessee within the stipulated period of 12 months, the assessment proceedings u/s 143 come to an end and the matter becomes final. Thus, although technically no assessment is framed in such a case yet the proceedings for assessment stand terminated. 15. Under such circumstances, since the assessee s legal ground which was dismissed by the Learned CIT(A) is again assailed by the assessee under the Cross Objection, we are of the considered opinion that in absence of notice under Section 143(2) of the Act, the assessment framed under Section 143(2) r.w.s 147 of the Act is liable to be held as invalid and thus no addition on the foundation of such invalid assessment can be sustained. In the result, Ground No.2 of the Cross Objection of the assessee is allowed. 16. Since, we have held the assessment order framed under Section 147 r.w.s 143(3) of the Act is invalid in the present case in terms of our observations supported with the ratio of law laid down by the Hon ble Apex Court in judgments referred to supra, the additions made are consequently deleted. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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