9911796707
TMI Blog2008 (12) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Hence, this appeal before us. 3. The learned counsel for the assessee contended before us that in this case admittedly no notice under s. 143(2) has been issued before making assessment under s. 143(3) r/w s. 147. Relying upon the decision of the Special Bench of the Tribunal in the case of Raj Kumar Chawla vs. ITO (2005) 92 TTJ (Del)(SB) 1245 : (2005) 94 ITD 1 (Del) (SB), it was contended that reassessment made in this case is bad in law. 4. It was further contended that the assessee had filed the return of income in respect of which no assessment has been made before the issue of notice under s. 148, the assessment therefore, on that ground was also invalid. The learned counsel for the assessee further contended that disallowance of interest also was not justified in this case, as the firm and partners constitute same entity and therefore, it cannot be said that share income from the firm is exempt from taxation. 5. The learned Departmental Representative, on the other hand. contended that the issue of notice under s. 143(2) was procedural and therefore, non-issue of the same would not render the reassessment as invalid. Reliance was also placed on the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was permissible was correction of errors apparent on the basis of the documents accompanying the return. The AO had no authority to make adjustments or adjudicate upon any debatable issues. In other words, the AO had no power to go behind the return, accounts and documents, either in allowing or in disallowing deductions, allowance or relief. Though technically the intimation issued was deemed to be a demand notice under s. 156, that did not preclude the right of the AO to proceed under s. 143(2) that right is preserved and not taken away. With effect from 1st April, 1998, the second proviso to s. 143(1)(a) was substituted. During the period between 1st April, 1998 and 31st May, 1999 sending of an intimation was mandatory. The legislative intent is very clear from the use of the word 'intimation' as substituted for 'assessment' that two different concepts emerge. While making an assessment, the AO is free to make any addition after grant of opportunity to the assessee. By making adjustments under the first proviso to s. 143(1)(a) no addition which is impermissible by the information given in the return could be made by the AO. The intimation under s. 143(1)(a) cannot be treated to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Asstt. CIT, yet the same is binding upon us insofar as the jurisdictional High Court of Delhi has not reversed the decision of the Special Bench of the Tribunal. It is also pertinent to mention that the Hon'ble Supreme Court in the case of CIT vs. Jai Prakash Singh (1996) 132 CTR (SC) 262 : (1996) 219 ITR 737 (SC) had considered the issue about the nature of notice issued under s. 143(2). In this case, the Hon'ble Supreme Court held that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions (charging sections). Any such omission or defect may render the order made irregular depending upon the nature of the provision not complied with but certainly not void or illegal. What is the impact of the above judgment when there is time-limit for issue of notice under s. 143(2) would be a matter to be considered by the Appropriate Authority. As far as the Division Bench of the Tribunal is concerned, it is bound by the decision of the Special Bench of the Tribunal, until it is superceded by any superior authority. As pointed out earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e months specified in the proviso to cl. (ii) of sub-s. (2) of s. 143, but before the expiry of the time-limit for making the assessment, reassessment or recomputation as specified in sub-s. (2) of s. 153, every such notice referred to in this clause shall be deemed to be a valid notice.] (Explanation.-For the removal of doubts. it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October. 2005 in response to a notice served under this section.) [(2) The AO shall, before issuing any notice under this section, record his reasons for doing so.) 10. It is evident from the above provisions that where a notice under s. 143(2) has been served even after the expiry of twelve months but before expiry of the time-limit for completion of the assessment, the assessee would be precluded from raising the issue of validity on the ground of late service of notice under s. 143(2). So, however, the above amendment does not come to the rescue of the Revenue, insofar as it is a case where admittedly no notice under s. 143(2) has been issued. As pointed out earlier, the Special Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
