INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Issuance of notice under section 143(2), whether mandatory -

Original assessment of the assessee was made after scrutiny under section 143(3). Later on, AO issued notice under section 148 conveying his desire to reopen the assessment of the assessee and directing the assessee to file the return of income for assessment year 2011-12. Pursuant to notice under section 148, assessee filed Reply wherein it requested AO to treat the original return already filed by the assessee under section 139 in response to the notice under section 148. However, AO despite the assessee asking him to treat the return of income filed under section 139 as return pursuant to the notice under section 148, AO insisted the assessee to file return of income and thereafter, passed the reassessment order under section 144/147 making addition. Assessee challenged the reassessment order passed by AO under section 144/147 to be bad in law being passed without issuing notice under section 143(2). Held: Action of AO to frame the assessment under section 144 was without jurisdiction and for that the decision of Supreme Court in the case of Hotel Blue Moon (2010) 321 ITR 362 (SC) : 2010 TaxPub(DT) 1434 (SC) was relied on, wherein it was held that issuance of notice under section 143(2) is mandatory for scrutiny assessment even in cases of assessments after search under section 132. Issuance of notice under section 143(2) is mandatory before scrutiny assessment, even section 292BB cannot come to the rescue of AO, since no notice under section 143(2) was issued by AO before framing reassessment Order, it was bad in law because AO had no jurisdiction to frame the reassessment Order without issuing the mandatory notice and therefore, all subsequent action is null in the eyes of the law.

Followed:Assitt. CIT & Anr. v. M/s. Hotel Blue Moon (2010) 321 ITR 362 (SC) : 2010 TaxPub(DT) 1434 (SC), Pr. CIT-08 v. Shri Jai Shiv Shankar Traders (P) Ltd. (2016) 383 ITR 448 (Del.) : 2015 TaxPub(DT) 4975 (Del-HC), CIT v. C. Palaniappan (2006) 284 ITR 257(Mad) : 2006 TaxPub(DT) 1342 (Mad-HC), Iqbal Singh Atwal v. CIT (1984) 147 ITR 599 (Cal) : 1984 TaxPub(DT) 0376 (Cal-HC) and Asstt. CIT, Circle-4 (1), Kolkata v. M/s. Asiatic Oxygen Ltd. & M/s. Asiatic Oxygen Ltd. v. Dy. CIT [ITA No. 714/KOL/2017 & C O No. 43/KOL/2017, Order dated 1-7-2019]

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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