| COURT: | ITAT Mumbai |
| CORAM: | Dev Darshan Sud J |
| SECTION(S): | 143(2), 153A |
| GENRE: | Domestic Tax |
| CATCH WORDS: | null & void, Search assessment |
| COUNSEL: | Hiro Rai |
| DATE: | June 20, 2015 (Date of pronouncement) |
| DATE: | June 22, 2015 (Date of publication) |
| AY: | 1999-00 to 2005-06 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 153A: There is no requirement to issue a notice u/s 143(2) before making an assessment u/s 153A | |
The Third Member had to consider whether the issue of a notice u/s 143(2) was mandatory for the completion of an assessment u/s 153A and whether the non-issue of such a notice rendered the s. 153A assessment null and void. HELD by the Third Member:
(i) There is no specific provision in the Act requiring the assessment made under section 153A to be after issue of notice under section 143(2) of the Act. Learned counsel for the assessee places heavy reliance on the judgment of the Hon‟ble Supreme Court in Hotel Blue Moon v. DCIT 321 ITR 362 (SC) wherein it was held that the where an assessment has to be completed under section 143(3) read with section 158BC, notice under section 143 (2) must be issued and omission to do so cannot be a procedural irregularity and the same is not curable. It is to be noted that the above said judgment was in the context of Section 158BC. Clause (b) of Section 158BC expressly provides that “the AO shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of Section 142, sub sections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply. This is not the position under section 153A. The law laid down in Hotel Blue Moon, is thus not applicable to the facts of the present case.
(ii) It is also to be noted that Section 153A provides for the procedure for assessment in case of search or requisition. Sub section (1) starts with non-obstante clause stating that it was “notwithstanding” anything contained in sections 147, 148 and 149, etc. Clause (a) thereof provides for issuance of notice to the person searched under Section 132 or where documents etc are requisitioned under Section 132(A), to furnish a return of income. This clause nowhere prescribes for issuance of notice under Section 143(2). Learned counsel for the assessee/ appellant sought to contend that the words, “so far as may be applicable” made it mandatory for issuance of notice under Section 143(2) since the return filed in response to notice under Section 153A was to be treated as one under Section 139. The words “so far as may be” in clause (a) of sub section (1) of Section 153A could not be interpreted that the issue of notice under Section 143(2) was mandatory in case of assessment under Section 153A. The use of the words “so far as 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 (Ashok Chaddha vs Income Tax Officer 337 ITR 399 (Del) followed, ACIT v. Geno Pharmaceuticals Ltd. (2013) 214 Taxman 83 (Bom.)(Mag.)(HC) distinguished)
What a cryptic order. No discussion at all. If the words “so far as may be applicable” doesn’t include 143(2) then no other section can be used in consonance to 153A. It is laughable to decide (especially without any debate) which provision is covered under the carpet of “so far as may be applicable” & which is not. What an order by Hon. President..
Then for the same reasons, provisions of section 142(1), 142(2A), 142A, 143, 144, 144A, 144BA & 144C are not applicable while framing the assessment orders pursuant to search by invoking provisions of 153A. What a laughable interpretation.
Hon’ble Madras High Court has,in CIT vs. M. Chellappan (2005) 198 CTR (Mad) 490, after,Relying on Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H), held that where AO had not served notice under s. 143(2) on the assessee within the stipulated period of twelve months in the reassessment proceedings, the reopening of the assessment and the completion of assessment was not valid.
Since the provisions of Sec. 148 & of section 153A, so far as the nature/status of the return furnished in response to the notices under any of these sections is same, ie;the language used ‘and the provisions of the Act shall, so far as may be, apply as if the return furnished in response to the notice under the said section were a return required to be furnished under section 139’ is the same and therefore,the present decision in the case under consideration requires re-consideration- p[robably u/s 254(2) itself..
Pl. read at the end of 2nd line (after the word ‘is’ of 2nd Para) of my comments dated 24th the following word:
‘concerned,it is’
This order of third members exhibits the fancy way of deciding serious matters. If the view that there is no such provision in 153 A for the AO to issue notice u/s.143(2) then the question is does the provisions of Sec.153 A contain procedure for making assessment. Ignoring the legal aspect of the Income-tax Act that the provisions of Sec.143(2) to be mandatory for making any assessment as such a provision is not contained in the chapter dealing with 153A or 158BC, it would not stand test of appeal before higher forums if it is held that there is no necessacity for the AO to issue 143(2) in a case of 153 A.
In contrast, pl. see the decision of the same Tribunal bench (DB) in case of Raptakso Brett & Co Vs DCIT [2015] 58 taxmann.com 115 (Mumbai – Trib.) written by Hon’ble AM B R Baskaran and Hon’ble JM Amit Shukla. Both the judgements are different but that is a DB decision. As held in Raptakos, non jurisdictional High Court is not binding and indirect support to the assessee from another non-jurisdictional High Court is better than direct non jurisdictional High Court decision against assessee.