Search Results For: 143(2)


CIT vs. Laxman Das Khandelwal (Supreme Court)

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DATE: August 13, 2019 (Date of pronouncement)
DATE: August 14, 2019 (Date of publication)
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CITATION:
S. 143(2)/ 292BB: The failure to issue a notice u/s 143(2) renders the assessment order void even if the assessee has participated in the proceedings. S. 292BB does not save complete absence of notice. For S. 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

According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, 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.

PCIT vs. Maruti Suzuki India Limited (Supreme Court)

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DATE: July 25, 2019 (Date of pronouncement)
DATE: July 27, 2019 (Date of publication)
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CITATION:
S. 170/ 292BB: A notice issued in the name of the amalgamating entity after amalgamation is void because the amalgamating entity ceases to exist. Participation in the proceedings by the assessee cannot operate as an estoppel against law. This is a substantive illegality and not a procedural violation of the nature adverted to in s. 292BB. There is a value which the court must abide by in promoting the interest of certainty in tax litigation. Not doing so will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable.

In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment

Anil Kisanlal Marda vs. ITO (ITAT Pune)

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DATE: July 1, 2019 (Date of pronouncement)
DATE: July 3, 2019 (Date of publication)
AY: 2009-10
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CITATION:
S. 143(2) Notice/ Rule 127: There is a difference between "issue" of notice and "service" of notice. Service of notice is a pre-condition for assuming jurisdiction to frame the assessment. Under Rule 127, service at the PAN address is valid even if it is different from the address in the Return. If a notice is issued but is returned unserved by the postal authorities and thereafter no effort is made to serve another notice before the deadline, it shall be deemed to be a case of "non-service" and the assessment order will have to be quashed

Section 27 provides that service by post shall be deemed to be effected by properly addressing, pre-paying and posting by registered post. It means that when a letter containing the document is properly addressed, pre-paid and posted by a registered post, it will be considered as a valid service. It is not the end of the provision. There is a specific mention of the words `unless the contrary is proved’. It means that the presumption of valid service on properly addressing, pre-paying and positing by registered post is not irrebuttable. It can be rebutted if the contrary is proved. Extantly, we are dealing with a situation in which the contrary has been proved inasmuch as the Department has itself accepted that the notice sent by the registered post was returned by the postal authorities. Under such circumstances, there can be no presumption of valid service of notice in terms of the above provisions

Sudhir Menon vs. ACIT (ITAT Mumbai)

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DATE: October 3, 2018 (Date of pronouncement)
DATE: October 18, 2018 (Date of publication)
AY: 2010-11
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CITATION:
S. 148: A notice u/s 143(2) issued by the AO before the assessee files a return of income has no meaning. If no fresh notice is issued after the assessee files a return, the AO has no jurisdiction to pass the reassessment order and the same has to be quashed

In view of consistent view of jurisdictional High Court and Delhi High Court, in the absence of pending return of income, the provisions of section 143(2) of the Act is clear that notice can be issued only when a valid return is pending for assessment. Accordingly, this notice has no meaning

Halcrow Group Ltd vs. ADIT (ITAT Delhi)

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DATE: July 2, 2018 (Date of pronouncement)
DATE: July 18, 2018 (Date of publication)
AY: 2004-05
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CITATION:
S. 147/ 143(2): If the notice u/s 143(2) is issued prior to the furnishing of return by the assessee in response to notice u/s 148, the notice issued u/s 143(2) is not valid and the reassessment framed on the basis of said notice has to be quashed. S. 292BB does not save the assessment (All judgements considered)

The proposal to reopen an assessment under section 147 of the Income-tax Act, 1961, is to be based on reasons to be recorded by the Assessing Officer. Such reasons have to be communicated to the assessee. Merely because the assessee participates in the proceedings pursuant to such notice under section 148 of the Act, it does not obviate the mandatory requirement of the Assessing Officer having to issue to the assessee a notice under section 143(2) of the Act before finalizing the order of reassessment. A reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the Assessing Officer to the assessee under section 143(2). The requirement of issuance of such notice is a jurisdictional one. It does go to the root of the matter as far as the validity of the reassessment proceedings under section 147/148 of the Act is concerned

Sunrise Academy of Medical Specialities (India) Private Limited v. ITO (Kerala High Court)

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DATE: May 22, 2018 (Date of pronouncement)
DATE: May 31, 2018 (Date of publication)
AY: 2015-16
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CITATION:
S. 143(2) Limited scrutiny: The CBDT Circulars which restrict the right of the AO in limited scrutiny cases apply only in cases where the AO seeks to do comprehensive scrutiny to find if there is potential escapement of income on other issues. However, if the s. 143(2) notice seeks information on whether the share premium is from disclosed sources and is correctly offered to tax, the AO can also inquire into whether the premium exceeds the FMV and is taxable u/s 56(2)(viib)

In a case of this nature, the assessee cannot be heard to contend that the assessing officer has exceeded its jurisdiction in the matter of passing the impugned order merely for the reason that the funds received by them in the form of share premium have been assessed as provided for under Section 56(2)(viib) of the Act. The circulars relied on by the petitioner have no application to the facts of this case and the same would apply only in cases where the assessing officer needs to take the case of the assessee for a comprehensive scrutiny on a finding that there is potential escapement of income on other issues

ITO vs. NVS Builders Pvt. Ltd (ITAT Delhi)

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DATE: March 8, 2018 (Date of pronouncement)
DATE: March 21, 2018 (Date of publication)
AY: 2006-07
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CITATION:
S. 143(2) Notice: The issue of a s. 143(2) notice by an AO not having jurisdiction over the assessee is irrelevant. If the proper AO does not issue the notice within the time limit, the assessment is null and void. The argument that the non-jurisdictional AO issued the s. 143(2) notice as per PAN or computerized system or internal procedure is not relevant as it violates the law

The contention of the Ld. D.R. has no merit that ITO, Ward-1(1), Faridabad was empowered to issue notice as per PAN or it was issued as per Computerized System of the Department because it is against the provisions of Law. As such the issue would be in violation of the principles of law and as such the internal procedure provided by the department would not justify the illegality committed by the ITO, Ward-1(1), Faridabad

ITO vs. Dharam Narain (Supreme Court)

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DATE: February 19, 2018 (Date of pronouncement)
DATE: February 27, 2018 (Date of publication)
AY: 2005-06
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CITATION:
S. 143(2) service of notice: If the assessee is not available to take service of the s. 143(2) notice, service on the authorized representative is sufficient to draw inference of deemed service of notice on the assessee. The fact that the authorized representative is disowned by the assessee is irrelevant

The non-availability of the respondent – Assessee to receive the notice sent by registered post as many as on two occasions and service of notice on 19th October, 2006 on the authorized representative of the respondent Assessee whom the respondent Assessee now disowns, in our considered view, is sufficient to draw an inference of deemed service of notice on the respondent – Assessee and sufficient compliance of the requirement of Section 143(2) of the Income Tax Act, 1961

Cameron (Singapore) Pte Ltd vs. ADIT (ITAT Jaipur)

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DATE: July 27, 2017 (Date of pronouncement)
DATE: August 24, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 143(2)/ 144C: Though service of the notice is not a condition precedent to conferment of jurisdiction upon the AO to deal with the matter, it is a condition precedent to making of the order of assessment. Accordingly, the s. 143(2) notice has not only to be issued before the expiry of the limitation period but has also to be served upon the assessee before the expiry of the limitation period. Conflict between VRA Cotton Mills (P&H) and Lunar Diamonds 281 ITR 1 (Del) explained in light of CBDT Circular No. 549 dated 31.10.1989

Service under the 1961 Act is not a condition precedent to conferment of jurisdiction in the ITO to deal with the matter but it is a condition precedent to making of the order of assessment. The Hon’ble High Court, in our opinion, lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Devi’s case

ITO vs. Gravity Systems Pvt. Ltd (ITAT Delhi)

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DATE: March 30, 2017 (Date of pronouncement)
DATE: June 27, 2017 (Date of publication)
AY: 2004-05
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CITATION:
S. 143(2) notice: If the Department fails to produce evidence relating to the issue and service of the s. 143(2) notice, an adverse inference has to be drawn as per s. 114 of the Evidence Act. The s. 143(3) assessment order has to be held invalid and void ab initio

Once this Tribunal has directed the Revenue to produce the record with regard to the assessment so that it can be verified whether notice under section 143(2) of the Act has been issued and served on the assessee before completing the assessment under section 147/148 of the Act, the Revenue was bound to produce the record. But the Revenue could not produce the record and just explained in the Bar that the record has been misplaced. Under these circumstances, we are bound to take an adverse inference in view of the provisions of section 114 of the Evidence Act to the effect that had the assessment record been produced, the same would have gone against the interest of the Revenue

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