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a revised return can be filed which will definitely be launched by the department. Then a petition u/s 119(2) should be filed before the respective commissioner for condonation of delay explaining the reasons that lead to filing the return beyond the time allowed u/s 139(4). Subject to the conditions specified in instruction no. 13/2006 dated 22.12.2006 the petition will be allowed. You have to see the monetary specified therein to apply. It it is more than a specified limit then it should be CCIT and CBDT as specified therein.

the above analysis is excellent but there is no conclusion drawn. In my opinion, what has been held by Chennai High Court is that if the loss of eligible unit is pertaining to the Asst year during which the unit is not claimed to be eligible unit for deduction u/s 80IA, then that loss should not be set off against the profits of the unit for the A.Y. in which the unit is claimed to be eligible for deduction u/s 80IA whereas if the unit gets losses in one of the year during which the unit is claimed to be eligible for deduction u/s 80IA and in subsequent years it gets profits then sec. 80IA(5) is applicable and in those circumstances, the decision of Chennai High court is not applicable and Special Bench decision is applicable the essence of which is profits are first to be set off with brought forward losses and then the quantum of deduction u/s 80 IA is to be computed.

For the first question we can simply answer "yes", the notice issued u/s 143(2) is not a valid notice. The second question is misunderstood in the sense that notice u/s 142(1) can  be issued for two purposes. one of the them is for calling for return of income and second one is calling for information. Here in the instant case, the notice u/s 142(1) is issued calling for certain details which falls under second category. Sec. 142(1) starts with the words 'for the purpose of making an assessment" which means that notice under this sec should be issued only for the purpose of assessment in other words we can say that only when assessment proceedings are validly initiated then notice can be issued. When the notice issued u/s 143(2) is ab initio void there are no assessment proceedings are pending as such notice u/s 142(1) cannot be issued calling for any details. It is also settled law that notice u/s 148 cannot be issued for roving enquiries. Only when the AO had reason to believe that income chargeable to tax has escaped assessment then he can issue notice u/s 148. He cannot issue the said notice only to verify the belated return filed. 

I think it is very difficult in the given circumstances. In general practice,  the real price will be higher than the document value, then the purchaser is not insisted to show the real investment value whereas here in the instant case, the value as per registered document is more than the real value and the purchaser is not willing to show the document value as his investment. He wanted to show the real value as his investment then what is the proof and how he will defend himself. I could not find a solution to the problem. Invariably he has to show the document value as his investment.

in my opinion case laws are not required as there is an amendment in sec. 50C itself by the Finance Act, 2009 by which an amendment is brought into the statute as per which Sec. 50C is applicable even for the transactions that are not registered. However, this amendment is applicable to the transactions that takes place after 01.10.2009. Therefore, it can safely be concluded that  for the earlier transactions, the provisions of sec. 50C are not applicable. 

I found a useful discussion in the following paragraphs which will be relevant to your problem. The author didnot quote any caselaws, however, the discussion appears to be logical. However, recently, Madras High Court also held that the provisions of Sec. 40a(ia) are constitutionally valid. In view of this judgement, the below mentioned analysis lost its importance. Even  then it appears that it commands some value. Please go thru and take support from the same

"Yes, the issue raised is very much relevant and logical. Once, it is proved that tax has been paid by the deductee, then there is no loss to revenue. Therefore, the enforcement of TDS in the hands of deductor appears to be non logical. But there is no answer for the question that TDS provisions will become redundant once this argument is accepted. But other side of the  logic is more reasonable and nobody could find any fault with it. Till a circular is issued by the board in 1997, nobody from revenue side accepted the argument that once the deductee paid  the taxes, decuctor should not be treated as assessee in default in respect of that TDS. Since many courts have accepted the argument and relieved the deductors from the demand u/s 201(1), finally CBDT had issued a circular in 1997 and ultimately made an amendment( not directly but indirectly) in Sec. 191 as per which the above mentioned proposition has been accepted.

                  Further, after this amendment also, many argue that once the deductee pays the tax, demand u/s 201(1) can be waived but not the demand u/s 201(1A). They quote the case law reported in 293 ITR 226 to support their argument. In my opinion, this is also not correct. once it is proved that the deductee paid the taxes alongwith interest u/s 234B and 234C then the department didnot lose anything. Because, the interest received from deductee u/s 234B and 234C is more or less equal to the interest chargeable u/s 201(1A) in the hands of the deductor. Though this is not directly enunciated, but indirectly supported the judgements reported in 271 ITR 395, 287 ITR 354, 288 ITR 379, 304 ITR 338(AT), 253 ITR 310 and 91 ITD 450. I dont say that penalty u/s 271C should also waived once the deductee pays the taxes.

                  Futher, there is no answer to this question that there is no provision existed as on today to prevent the revenue from enforcing the provisions of sec 40a(ia) when it is brought to the notice that deductee had already paid the taxes. Since TDS is not the liability of the assessee and the liability of some body else discharged by the assessee, it cannot be written off in his books and should be reduced from the payment to be made to the deductee or else he should request the deductee to return that amount by issuing a TDS certificate to that effect in case the payment is already made by him. In fact, nothing prevented him from issuing the TDS certificate. Even in the case of deductee also, if no claim is made in the return and two years are already over, he cannot made a frest claim which is against the provisions of Sec. 155(14). But natural justice says the same amount cannot be collected twice. Once from the deductee as a tax liability and secondly from the deductor in the form of enfocing the provisions of Sec. 40a(ia).

                Even the amendment brought in the F.Y. 2008 wherein it has been allowed to pay the TDS deducted before filing of the return of income is applicable only to the deductions made during the month of March of the preceeding F.Y.. For other payments, the amended provision is not applicable and the same should be remitted before the expiry of the F.Y. otherwise, there is every possibility that the relevant expenditure will be disallowed by the A.Os invoking the provisions of Sec. 40a(ia). In view of the above, this issue needs further elobaration and requires further amendment commensurating the argument that provisions of sec 40a(ia) are not applicable when it is proved that deductee had already paid the relevant taxes. But as of now, this argument will not be accepted by the revenue authorities."

From the reply posted it appears that you are differing with the opinion expressed by me. This forum is meant for sharing  the ideas of different people and explore any new angle and solution to the problem that is faced in practical situations. Coming to the problem, sec. 194C says not only at the time of payment but also at the time of credit of such sum to the account of the contractor. Therefore, in the books of principal the expenditure is debited and the account of contractors will be credited. At this juncture provisions of section 194C are applicable.  Of course, the said creditors account again will be nullified by passing a JV with the  payment made to agent. Please note that the agent is working on behalf of the principal and he himself is not a contractor. If the case is otherwise, then principal is supposed to deduct the taxes on the whole amount paid to agent but infact, he is deducting taxes only on the commission paid to agent but not on the whole amount paid to agent. So without any iota of doubt we can say that it is the responsibility of the principal to deduct the taxes or giving directions to the agent as to how he had to execute the work. Because, he failed in his duty, he is liable for all consequences. If at all any mistake is occurred, that is at the time of appointing an agent who is not aware of the provisions. Ignorance of law is not excusable. As mentioned in the problem, why TDS is not deducted by the agent, because the agent is not aware of the provisions. If the principal, himself, is not aware and doesnot  deduct then what happens, he will have to bear the consequences. In the same way, the principal is to bear the consequences in the given situation also,  and therefore, he cannot escape from the disallowance of expenditure as the expenditure is ultimately debited in the hands of the principal. Since the facts are apparent, no need to take the assistance of any case law in this regard. If reverse argument is taken, then case law is required. When the facts are visible to the naked eye, in my opinion, no case law is required to support the said argument. I hope I am clear with my opinion.   

As for the facts mentioned in the problem, the agent will prepare his P & L account crediting the same with the commission received from principal. The principal prepares his P & L account by debiting the expenditure paid to the contractors ( infact paid by the agent without deducting the TDS). Therefore, the expenditure claimed by the principal will be disallowed because TDS is not deducted. It is immaterial whether the payment is made by the agent on behalf of the principal or the principal had directly made the payment. The amount debited in the P & L account of the principal will be disallowed since no TDS is deducted.

If the shares are sold after the date specified then the person is entitled for claiming exemption available u/s 10(38). It is not necessary that the shares should be purchased after the date specified.

I dont know the intention of the question framer. But when I see the answer given by one of friends, I thought, I should share my view about the opinion expressed. In my opinion, the interest on 201(1A) is also an allowable expenditure and can be claimed in the P & L account. No need to claim the same below the line. Every expenditure incurred is allowable u/s 37(1) of the Act unless otherwise provided in the IT Act and  if it is incurred for the purpose of business. Why interest u/s 201(1A) has arisen. Because, TDS was not deducted or if deducted TDS was not remitted to governments kitty within the time specified. That means the funds were utilised for business purpose without paying to the government. In case the TDS was remitted on the date when it was to be remitted then the assessee should have borrowed funds for the purpose of business. Therefore, the interest on such borrowed funds is to be allowed u/s 36(1)(iii) of the Act. In other wards we can say that the assessee had borrowed funds from the government and utilised the same for business purposes. Can we, now, say that interest is not allowable. No,  certainly not. For disallowance of the expenditure like IT and WT there are specific provisions u/s 40(a)(ii) and 40(a(iia) respectively. BUt I cannot find a provision in IT Act to get disallowance of the interest paid u/s 201(1A) so far as it is proved beyond doubt that the funds held in the company/concern are utilised for business purposes  more so when demand u/s 201(1) is allowable ( this argument is acceptable?).
From the beginning I am thinking in these lines................... But many people working in the department are not accepting this argument. Can anybody throw more light in different directions..............

Thanks to the question framer and subsequent participaters .........................

obviously the status of the trust is AOP as such the surplus in its hands should be taxed. Unfortunately, the share of each person contributing the units is again taxed in the  hands of the individuals as per sec. 67A of the ACT.

though belated means whether it was filed before the time limit expires u/s 139(4) or after expiry of the time allowed u/s 139(4). If it is before 139(4) then as mentioned earlier you will get relief atleast before appellate authorities if not with the AO. If it is a return after the time of 139(4), it will not be recognised by law and the chances of getting relief are very bleak. Date of search or date of issuance of notice u/s 158BC/158BD are irrelavent. Of course, department may argue that only because search is conducted that you have filed the return otherwise, you have no intention of filing any return. Since law otherwise permits you to file a return u/s 139(4)/139(5), there are good chances of winning the case before appellate authorities.

If the return is filed before/after the search and but before the issuance of notice u/s 158BC/158BDor under any other section if it is within the time allowed u/s 139(4) then it is a valid return and the contnets of the said return are valid. Even if it is rejected by the AO the person can win the case at least before the appellate authorities.
with regard to second question also, the answer furnished above holds good to some extent. The exceptional circumstance is that if a block return is filed before issuance of notice u/s 158BD/158BC before issuance of the said notices by the A.O. It had no recognisition as in normal circumstances, the assessee will not file block returns.  Therefore, the same will not be considered by AO and  nobody can help this type of cases. Law will not recognise such returns and it will be deemed no return is filed.