148 Notice, No Return, Notice u/s 143(2), No Apperance, Assessment U/s 144(1)(c)

[CaGCBaid]

Facts:

-Return u/s 139 was filed.

-Notice u/s 148 issued within four year.

-No response to notice u/s 148.

-AO instead of framing assessment u/s 144(1)(a), issued notice u/s 143(2)

-Non appearance in the assessment proceeding u/s 143(2)

-AO Passed assessment order u/s 144 for the reason that assessee was not appeared in the assessment proceeding. [There is clear finding in the assessment order that assessment u/s 144 was framed because of non compliance of notice u/s 143(2) and 142(1).

-CIT(A) Uphold assessment u/s 144 holding that for the default of non filing of return as well as for non appearance in the assessment proceeding assessment u/s 144 is to be framed and since the AO passed assessment u/s 144, Invalidity of the notice u/s 143(2) will not nullify the assessment u/s 144.


Query:
Whether the assessment framed u/s 144 for the default of non appearance in the assessment proceeding initiated by issuance of notice u/s 143(2) [144(1)(c)] can be treated as passed for the default of non filing of the return in response to notice u/s 148 [144(1)(a)]?

[As the return required to be furnish in compliance to notice u/s 148 treated as return required to be furnished u/s 139, assessment u/s 144(1)(a) is permitted in case notice u/s 148 not responded]

[Assessment Proceeding initiation by issuance of Notice u/s 143(2) without cannot be issued in absence of return in response to notice u/s 148 has no legal validity particularly when the time limit to issue notice with reference to return filed u/s 139 originally had expired.

[pawansingla]

T: Even where assessee requested Assessing Officer to treat original return as one in response to section 148 proceeding, notice under section 143(2) was mandatory; otherwise re-assessment would be bad in law

■■■

[2014] 45 taxmann.com 424 (Madras)

HIGH COURT OF MADRAS

Commissioner of Income-tax, Chennai

v.

Alstom T & D India Ltd.*

MRS. CHITRA VENKATARAMAN AND K. RAVICHANDRABAABU, JJ.
TAX CASE (APPEAL) NOS. 1183 & 1186 OF 2006†
SEPTEMBER  3, 2012

Section 147, read with section 143, of the Income-tax Act, 1961 - Income escaping assessment - Issue of Notice (Reasons to believe) - Assessment year 1994-95 - Whether where assessee had requested Assessing Officer to treat original return already filed as one in response to section 148 proceeding, further proceedings regarding compliance of procedure under section 143(2) is to be completed as this section is mandatory in nature - Held, yes - Whether where no notice was issued under section 143(2), finalisation reassessment proceedigns under section 143(3), read with section 147, was bad in law - Held, yes [Para 6] [In favour of assessee]

FACTS

■       A notice under section 148 was issued. Since, there was no response, notice under section 142 was issued. The assessee requested revenue to treat the original return as conclusive return and sought reason for reopening of assessment.
■       The Assessing Officer replied that reasons for reopening assessment need not be communicated to the assessee. Ignoring contents of the assessee's letter, the Assessing Officer viewed that the assessee had not filed return and thus, completed assessment.
■       On appeal, the Commissioner (Appeals) upheld the reopening of the assessment.
■       However, on second appeal, the Tribunal held that completion of the assessment proceedings under section 143(3), read with section 147 without issue of notice under section 143(2) was bad in law. Hence, the Tribunal cancelled the assessment.