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TMI Blog2024 (7) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas in the orders and judgements relied upon by D.R., no return or reply was filed by the assessees and, therefore, the above said order and judgements are not similar to the facts of the present case. In the result we accepted the legal issue and held that the assessment order are not sustainable, hence allowed the appeal filed by the assessee. - Shri Waseem Ahmed, Accountant Member And Shri Soundararajan K., Judicial Member For the Assessee : Shri Zain Ahmed Khan, CA For the Revenue : Shri V. Parithivel, JCIT-DR ORDER PER: SOUNDARARAJAN K., J.M. This appeal filed by the assessee challenges the order of the CIT(A)-11, Bengaluru dated 28.12.2023 in respect of the Assessment Year (AY) 2014-15. 2. The brief facts of the case are that the assessee filed her return of income on 28.07.2014. Thereafter a survey u/s. 133A was conducted at the company M/s. Intact Developers P. Ltd., in which the assessee is a Director and based on the survey it was found that the assessee had lent unsecured loans to the company and in support of the unsecured loans the assessee filed confirmation letters from the company. Insofar as the source for the loan, the assessee submitted that she got capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the capital gains were reinvested in agricultural land in satisfaction of conditions laid down in section 54B of the IT Act. 6 Without prejudice to the above grounds, the Ld. AO erred in not issuing statutory notice u/s. 143(2) of the IT Act 5. At the time of hearing the learned A.R. of the assessee first argued on the legal plea that the order of the ld. AO is bad in law and not in accordance with the provisions and judgements of various High Courts since no notice u/s. 143(2) was issued. It is his further contention that the judgement relied on by the ld. AO is also not on the facts and circumstances of the case. The learned A.R. further submitted that before passing the assessment order u/s. 144 r/w sec 147 of the Act the assessee had sent a request to treat the return filed u/s. 139(1) of the Act as the return filed in response to notice u/s. 148 of the Act and, therefore, the ld. AO ought to have considered that the return was filed pursuant to the notice u/s. 148 and, therefore, he ought to have issued a notice u/s. 143(2) of the Act before passing the assessment order. The learned A.R. further contended that the finding of the AO that no return was filed in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reason that the same was not filed with the time prescribed after issuing of notice u/s. 148 of the Act. 8. Before proceeding further, let us have a look at the provisions dealing with this issue. Section 148: Before making the assessment, reassessment or recomputation under Section 147, the assessing officer shall serve a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this act shall, so for as may be, apply accordingly as if such return were a return required to be furnished under section 139; Section 143(2) :Where a return has been furnished under section 139, or in response to a notice under sub section(1) of section 142, the assessing officer shall,- (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, he ought to have issued notice u/s 143(2) of the Act before passing the order. It is immaterial whether the AO had passed the order u/s 143 or 144, when there is a return and the AO wanted to disallow some claim, it is mandatory that he should issue a notice u/s 143(2) of the Act. In this case the AO while computing the income had taken into consideration the return and therefore we are of the view that the AO ought to have issued notice u/s 143(2) of the Act. 10. In our view the ld. AO failed to consider that the assessee had replied to the notice u/s. 148 before passing the assessment order on 30.08.2019 and the return of income filed on 28.06.2014 was also taken into consideration by the ld. AO while passing the assessment order. Once the return of income was filed by the assessee or the assessee had requested the AO to treat the return of income filed u/s. 139(1) of the Act as the return in response to notice u/s. 148 of the Act, then the ld. AO ought to have issued a notice u/s. 143(2) of the Act. So in the present case before passing the assessment order the assessee had given her option to treat the return filed u/s. 139(1) as the return of income filed in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above judgment made it clear that notice u/s 143(2) of the Act is mandatory before passing the order. 13. We have also perused the following orders cited by the learned D.R. in support of his arguments that the non issuance of notice u/s. 143(2) of the Act is not fatal. (i) In the order dated 15.05.2020 in the case of Rakesh Aggarwal v. ITO, the ITAT Delhi Bench has given a finding that From the perusal of records, the Ld. AR could not point out that the notice was not duly served upon the assessee. In fact, the records show that the notice was served to the assessee, but the assessee could not attend the assessment proceedings which leads to passing of Assessment Order u/s. 144 of the Act. The reliance of case laws by the Ld. AR will not help in the present case, as the assessee could not demonstrate that the notice was not served to him at his address mentioned in the records. Thus Ground No. 3 is dismissed . (ii) In the case of Uday Bhagwan Industries cited supra, relied on by the learned D.R., the facts are that the assessee had not filed the return of income pursuant to the notice u/s 144 or not filed any reply seeking the AO to treat the return already filed as the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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