9911796707
TMI Blog2023 (9) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... is erroneous both in law and on facts. 3. Any other ground that may be added at the time of hearing of appeal." 3. The brief facts of the case are that the assessee is a company, engaged in the business of construction and transporting contracts. The assessee has electronically filed its return of income for A.Y. 2010-11 on 14.10.2010 declaring total income of Rs. 4,72,73,995/- . Subsequently, the case of assessee was selected for scrutiny and assessment was completed under Section 143(3) of the Income-tax Act, 1961 dated 26.03.2013 assessing the total income of the assessee at Rs. 4,96,70,700/-. Subsequently, the case of the assessee was picked up for reopening the assessment under Section 147 of the Act according to the reasons to believe that the assessee has incurred expenditure on salary and wages in cash during the year from undisclosed sources, assessee incurred bogus sub- contract expenses and SD/EMD deposits were made in cash through sources in the name of sub-contractors. Therefore, Learned AO believe that income chargeable to tax for A.Y. 2010-11 has escaped assessment and by reason of the failure on the part of the assessee to make a return under Section 139 to disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on or before 16.12.2017. In response, the assessee himself submitted the reply stating that all the necessary documents along with proper details and evidence were already submitted on 21.12.2017 thus it was observed by Learned AO that the assessee has nothing to say in response to the final show-cause notice issued and relied upon on the submission made earlier on 21.12.2017. Therefore, it was concluded that the assessee failed to discharge the onus lies on him. With such observations, Learned AO made all the three disallowances making the total assessed income to the tune of Rs. 6,48,16,900/-. 4. Aggrieved with the order of Assessing Officer under Section 143(3) r.w.s 147 of the Act, assessee preferred an appeal before Learned CIT(A), wherein relief was granted by Learned CIT(A) on merits to the assessee. However, legal additional grounds of the appeal raised by assessee i.e. Ground Nos.4 & 5 were dismissed by the Learned CIT(A). Since the additions made by the Assessing Officer were vacated by the Learned CIT(A). Aggrieved by the order of Learned CIT(A), Revenue is now in appeal before us challenging the decision of Learned CIT(A). At the same time, the assessee has also fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was - (a) Not served upon him; or (b) Not served upon him in time; or (c) Served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." 7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Senior Advocate, since the Respondent had participated in the proceedings, the provisions of Section 292BB would be a complete answer." 7. After discussing Section 292BB of the Act, Hon'ble Apex Court noted the submissions of the Learned Advocate on behalf of the assessee/respondent that the notice under Section 143(2) of the Act was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant filed letter requesting to treat the return filed u/s. 139 of the Act as return filed in response to u/s. 148. (Annexure-3). The Ld. Assessing Officer recorded this fact in the assessment order (Page No.2 Para No.2 (11th line from the bottom)] and proceeded to make the assessment. However, he did not issue notice u/s 143(2), which is mandatory. 3.2 The appellant obtained copy of order sheet of the assessment proceedings and the same is submitted herewith as ANNEXURE-4 The fact of non-issuing of notice u/s. 143(2) is verifiable from the order sheet for there is no entry in this regard. It is also verifiable from the assessment order as the Ld. Assessing Officer did not mention anything regarding issue of notice of 143(2) of the Act endorsing the fact that notice u/s. 143(2) was never issued. Therefore, the appellant filed specific application along with copying fee to supply copy of notice issued u/s. 143(2). Copy of the application is enclosed herewith as ANNEXURE-5. The Ld. Assessing Officer replied to said request and stated that he is busy with time barring assessments and said document is not readily traceable. Copy of Ld. Assessing Officer's letter dated 25/06/2021 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 143(2) was issued or not during the hearing on 26.04.2023. The Learned DR was directed to produce the assessment record so as to verify the status. Again, on 03.07.2023, Learned DR was directed to produce the assessment record, however, despite specific directions, the assessment records have not been produced. Considering importance of the facts once again, the Department is directed to produce the assessment record on next hearing of appeal and the appeal is adjourned to 20.07.2023. On next hearing dated 20.07.2023, wherein the assessee-respondent/cross objector has inter alia assailed the validity of jurisdiction assumed by the AO for framing the assessment order under Section 147 r.w.s 143(3) dated 29.12.2017 for the reason that no notice under Section 143(2) of the Act was issued by him. Therefore, the Learned DR is directed to obtain a report from the AO i.e. ACIT (Central), Bilaspur and case was adjourned. In compliance with the said directions of the Bench, Learned ACIT(Central), Bilaspur has submitted copy of a letter having F. No. ACIT(Central)/BSP/BPL/ITAT/2023-24 dated 22.08.2023, wherein Learned AO in para II, has categorically mentioned that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had not any objection during assessment proceeding regarding issuance of notice u/s 143(2) of the Act and attended the reassessment proceedings and submitted the written reply with supporting documents. The AO has following the proper procedure before completing the assessment. 3. The case record in one volume alongwith letter is being submitted for kind perusal and necessary action." 12. Again, on 23.08.2023 Learned Sr. D.R. submitted a letter pertaining to submission of report received from Ld AO in the case of assessee/respondent enclosed therewith of letter to JCIT, ITAT dated 22.08.2023 written by ACIT(Central Circle), Bilaspur having clarification in respect of notice under Section 143(2) of the Act in the case of assessee. On perusal of the said letter in para 5, Learned AO again accepted that no notice under Section 143(2) of the Act could have been issued on the assessee during the assessment proceedings. Since, the Learned AO has specifically accepted that while conducting the assessment under Section 143(3) r.w.s 147 of the Act, no notice under Section 143(2) of the Act was issued and served on the assessee. Therefore, in terms of additional grounds raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the notice the AO has passed the assessment order, it is very settled legal position that when the assessee filed the return in response to the notice u/s 148 of the Act. It is mandatory on the part of the AO to issue the notice u/s 143(2) when the AO has taken cognizance of such return. He has not treated the return as non-est or invalid. We also found that as no notice u/s 143(2) was sent to the assessee for reassessment u/s 148 before completion assessment or the deadline i.e. 30/09/2016, so the return submitted by the assessee has to be deemed as accepted as such. 9. We also observe that the CBDT circular No.549 dated 31/10/1989 (1990) 823 CTR (SC) (1) makes it abundantly clear that once an assessee does not received a notice u/s 143(2) within the period stipulated then such an assessee "can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return". The position emerges from this CBDT circular was referred to and clarified by Hon'ble Punjab and Haryana High Court in the case Vipan Khanna Vs. CIT (2002) 175 CTR (P&H) 335. The Hon'ble High Court referred the circular in this case and observed that in case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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