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TMI Blog2024 (9) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... USTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petitioner Through: Mr. Sandeep Goel, Adv., Mr. Prakash Kumar, Adv. For the Respondents Through: Mr. Vipul Agrawal, SSC with Mr. Gibran Naushad and Ms. Sakshi Shairwal, JSCs. JUDGMENT YASHWANT VARMA, J. (ORAL) 1. These two writ petitions impugn the reassessment action as initiated by the respondents in terms of the notices dated 27 March 2022 and 26 July 2022 under Section 147/148 of the Income Tax Act, 1961 [Act]. 2. The writ petitioners also assail the final and draft orders of assessment drawn pursuant thereto. The principal ground of challenge to the reassessment action was based upon a conceded failure on the part of the respondents to comply with the requirements of Section 143 (2) of the Act. It was thus contended that a failure to issue a notice referable to that provision would be fatal and render the entire proceedings invalid. 3. While considering these two writ petitions, we had in W.P.(C) 10298/2022 taken note of a contention addressed on behalf of the respondents who had sought to canvass the contention that the challenge would not sustain bearing in mind the decision rendered by the Court in Ashok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be cannot be stretched to the extent of mandatory issue of notice under section 143 (2). As is noted, a specific notice was required to be issued under clause (a) of sub-section (1) of section 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under section 143 (2) could be contemplated for assessment under section 153A. 14. No specific notice was required under section 143 (2) of the Act when the notice in the present case as required under section 153A(1)(a) of the Act was already given. In addition, the two questionnaires issued to the assessee were sufficient so as to give notice to the assessee, asking him to attend the office of the Assessing Officer in person or through a representative duly authorized in writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him. 5. Mr. Vipul Agrawal, learned counsel appearing for the respondents, had submitted that bearing in mind the similarity in the language of the two provisions, the decision in Ashok Chaddha is clearly an authority for the proposition that a failure to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Commissioner of Income-tax v. Laxman Das Khandelwal, (2019) 108 taxmann.com 183 (SC). For convenience, the relevant reasoning made in this behalf is set forth hereafter: 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. On the other hand, Mr. Ankit Vijaywargia, learned Advocate, appearing for the Respondent submitted that the notice under Section 143 (2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143 (2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid. 8. The law on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 143 (2) of the Act was not issued to the assessee pursuant to the filing of the return. In other words, it was held mandatory to serve the notice under section 143 (2) of the Act only after the return filed by the assessee is actually scrutinised by the Assessing Officer. 14. The interplay of sections 143 (2) and 148 of the Act formed the subject matter of at least two decisions of the Allahabad High Court in CIT v. Rajeev Sharma it was held that a plain reading of section 148 of the Act reveals that within the statutory period specified therein, it shall be incumbent to send a notice under section 143 (2) of the Act. It was observed (page 687): The provisions contained in sub-section (2) of section 143 of the Act is mandatory and the Legislature in its wisdom by using the word reason to believe had cast a duty on the Assessing Officer to apply mind to the material on record and after being satisfied with regard to escaped liability, shall serve notice specifying particulars of such claim. In view of the above, after receipt of return in response to notice under section 148, it shall be mandatory for the Assessing Officer to serve a notice under sub-section (2) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court held likewise in Sapthagiri Finance and Investments v. ITO . The facts of that case were that a notice under section 148 of the Act was issued to the assessee seeking to reopen the assessment for the assessment year 2000-01. However, the assessee did not file a return and therefore a notice was issued to it under section 142 (1) of the Act. Pursuant thereto, the assessee appeared before the Assessing Officer and stated that the original return filed should be treated as a return filed in response to the notice under section 148 of the Act. The High Court observed that if thereafter, the Assessing Officer found that there were problems with the return which required explanation by the assessee then the Assessing Officer ought to have followed up with a notice under section 143 (2) of the Act. It was observed that: Merely because the matter was discussed with the assessee and the signature is affixed it does not mean the rest of the procedure of notice under section 143 (2) of the Act was complied with or that on placing the objection the assessee had waived the notice for further processing of the reassessment proceedings. The fact that on the notice issued under section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed in the notices issued under Section 148 of the Act, the said returns were invalid and were rightly ignored by the AO. He submitted that in the circumstances no notice under Section 143 (2) of the Act was required to be issued to the Assessee. He further submitted that the present assessments were framed under Section 144 (1) (b) of the Act - on account of failure on the part of an Assessee to comply with all terms of a notice issued under Section 142 (1) of the Act or failure to comply with directions issued under Section 142(A) of the Act - and issuance of notice under Section 143 (2) of the Act is not a necessary precondition for the same. He contended that the position would be no different even if the returns were filed in the regular course. Mr Dileep Shivpuri relied on the decision of this Court in Ashok Chaddha v. ITO: (2011) 337 ITR 399 (Delhi) in support of its contention that no notice under Section 143 (2) was required to be issued. 12. Having noticed the aforesaid contention, the Division Bench proceeded to hold as under:- 9. It is now well established that if the AO does not accept the return filed by the Assessee on its face and he is required to issue a noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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