INCOME TAX ACT, 1961

Section 143(3) Section 153

Assessment - Validity - Ex parte assessment order in nature of best judgment assessment order under section 144 but same was passed under section 143(3) -

Assessee was aggrieved by order of AO making huge addition for which neither notice was given to show cause nor documents and information furnished by assessee was relied upon. On basis of the Income Tax details with department, AO came to the conclusion that assessee deposited substantial cash during the period of demonetization. AO made addition on account of cash on hand and further on account of time deposits with bank, as per the information received and information collected under section 133(6).Held: Assessment order was in nature of ex parte, in nature of best judgment assessment order under section 144. However, assessment order was passed under section 143(3), which required providing an opportunity to assessee to rebut the proposed additions to be made and issue show cause notices under section 142(1) and under section 143(2). Thus, assessment order was liable to be quashed and set aside. Only question was as to if assessment order was quashed and the matter was remanded back to AO, then whether AO would be entitled to pass afresh assessment order, in view of the limitation for passing the assessment order as provided under section 153 as assessment would lapse for want of limitation. An order of any Court means an order of any and every Court of the country. The hierarchy in status of Court in the country is not decisive. As provided in section 153(6), that there must be a Court, and there must be an order of the Court. Therefore, when Court remands the matter, it is an order of the Court which would extend the limitation for completing the assessment by AO for another twelve months. Therefore, matter was remanded back to AO to pass fresh de novo assessment order, after providing all the details and information in possession of AO.

Followed:T.M. Kousali v. Sixth ITO (1985) 155 ITR 739 (KAR.) : 1985 TaxPub(DT) 0405 (Karn-HC) and Addl. CIT, Gujarat v. New Jehangir Vakil Mills Company Limited (1979) 117 ITR 849 : 1979 TaxPub(DT) 938 (Guj-HC.

REFERRED : Whirlpool Corporation v. Registrar of Trade Marks, Mumbai & Ors. (1998) 8 SCC 1 Rajinder Nath v. CIT (1979) 120 ITR 14 (SC) : 1979 TaxPub(DT) 1075 (SC), Director of Inspection of Income Tax (Investigation), New Delhi, & Anr. v. Pooran Mall and Sons & Anr. (1975) 4 SCC 568, CIT, AP v. Vadilal Ichhachand (1973) 89 ITR 0240 (SC) : 1973 TaxPub(DT) 455 (SC), N Kt. Sivalingam Chettiar v. CIT (1967) 66 ITR 586 (SC) : 1967 TaxPub(DT) 334 (SC) CIT v. Ajax Products Limited (1965) 55 ITR 741 at p. 747 : [AIR 1965 SC 1358 at pp. 1361, 1362) : 1965 TaxPub(DT) 196 (SC), ITO, A-Ward, Sitapur v. Murlidhar Bhagwan Das (1964) 52 ITR 335 (SC) : 1964 TaxPub(DT) 280 (SC), A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani & Anr. AIR 1961 SC 1506 : 1983 TaxPub(EX) 277 (SC), Calcutta Discount Company Limited v. ITO, Companies District I, Calcutta, & Anr. AIR 1961 SC 372 : 1961 TaxPub(DT) 130 (SC), State of Uttar Pradesh v. Mohammad Nooh 1958 SCR 595 : AIR 1958 SC 86, KS. Rashid & Son & Ors. v. Income Tax Investigation Commission & Ors. AIR 1954 SC 207 : 1954 TaxPub(DT) 61 (SC), Rashid Ahmed v. The Municipal Board, Kairana. The UOI AIR 1960 SC 163, CIT, Punjab, Jammu and Kashmir, Chandigarh & Ors. v. Ramesh Chander & Ors. (1974) 93 ITR 450 at p. 478 : (1973) Tax LR 1427 at p. 1440 (Punj) : 1974 TaxPub(DT) 98 (P&H-HC) and Ramjibhai Kalidas v. I.G. Desai, ITO & Ors. (1971) 80 ITR 721 (Guj-HC) : 1971 TaxPub(DT) 176 (Guj-HC).

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