Issue of notice u/s 143(2) after 148

[cagauravgoyal]

Dear All,
I would like to have suggetions and some citations on the following case:-

The AO issue notice u/s 148 for three years with in time. But the assessee didnot reply to the notice issued by AO. Then AO issued notice u/s 143(2) within time limit prescribed. Before Issuing notice u/s 143(2) AO neither gives us any show cause nor assessee submitted any return u/s 148. Whether notice u/s 143(2) is valid? Secondly, AO proceeded to assess the income u/s 144 whether AO can do so?

[ashutosh majumdar]

(i) S. 143 (2) applies

"Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall ...."

As no ROI has been furnished, the s. 143 (2) notice is invalid.

(ii) S. 148 provides that:

"Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve82 on the assessee a notice requiring him to furnish within such period, 83[* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be84, apply accordingly as if such return were a return required to be furnished under section 139"

So, the assessee ought to have filed a ROI u/s 139 (1)

(iii) S. 144 reads as follows:

"If any person—

          (a)  fails to make the return required 46[under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or

          (b)  fails to comply with all the terms of a notice issued under sub-section (1) of section 142 47[or fails to comply with a direction issued under sub-section (2A) of that section], or

          (c)  having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143,

the 48[Assessing] Officer, after taking into account all relevant material which the 48[Assessing] Officer has gathered, 49[shall, after giving the assessee an opportunity of being heard, make the assessment50] of the total income or loss to the best of his judgment and determine the sum payable by the assessee 51[* * *] on the basis of such assessment"

As there has been a failure on the assessee's part to file a ROI u/s 139(1), the AO can make a BJ assessment.

[BALAJI N V]

Dear All,
I would like to have suggetions and some citations on the following case:-

The AO issue notice u/s 148 for three years with in time. But the assessee didnot reply to the notice issued by AO. Then AO issued notice u/s 143(2) within time limit prescribed. Before Issuing notice u/s 143(2) AO neither gives us any show cause nor assessee submitted any return u/s 148. Whether notice u/s 143(2) is valid? Secondly, AO proceeded to assess the income u/s 144 whether AO can do so?

If there is no response to 148, ie if there is no return in response to notice under section 148, the question of issuing 143 (2) does not arise at all.  If the AO has issued 143 (2), it is an invalid notice.  It may be noticed that 143 (2) is issued only where there is a ROI.  The next issue you have mentioned is that the AO has proceeded under section 144.  The lack of response to the notice under section 148 will be ground for proceeding under section 144.  However the proviso to section 144 requires the AO to issue SCN and such SCN is dispensed only where a 142 notice is issued prior to the assessment.  In your case, it appears that neither a SCN nor a 142 notice issued and therefore the proviso clearly applies and the assessment may not be a valid assessment under section 144.

[cagauravgoyal]

Dear All,
Thanks for your valuable opinions.
I also agree with the opinion that notice u/s 143(2) and assessment u/s 144 both are invalid. One of my friend has also taken a view that "As return required to be filed u/s 148 will be deemed as required to be furnished u/s 139(1), hence AO can go for assessment u/s 144 of income tax act, 1961."

I have also the same doubt going in my mind and AO can take the plea of this also. I have searched a lot for any citation but i could not get a valid one. If any one can have a valid citation then please quote the same.

[CaGCBaid]

Sir,

Can u Please update the result of the proceeding for which the query was initially raised.