INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Non-issue of notice under section 143(2) -

AO issued notice under section 148 after recording the reasons that the assessee company has received accommodation entry from M/s. G. Assessee submitted before AO that return filed originally might be considered as return filed in response to notice under section 148. Assessee filed detailed reply before AO, objecting to the proposed action under section 148 as well as addition on merits. AO, however, made addition under section 68 in reassessment order under section 143(3)/147. Assessee submitted that impugned assessment order was illegal being without jurisdiction, since mandatory notice under section 143(2) was never issued. Held: It was an admitted fact that assessee in response to the notice under section 148 filed a letter before AO stating therein that return filed under section 139 might be treated as return filed in response to notice under section 148. Thus, assessee made compliance to the notice under section 148. Issue was covered by the judgment of Supreme Court in case of CIT v. Laxman Das Khandelwal (2019) 108 Taxman.com 183 (SC) : 2019 TaxPub(DT) 5081 (SC) in favour of assessee. Since no notice under section 143(2) was issued by AO at reassessment proceedings which was mandatory for completion of assessment, therefore, reassessment order was bad in law, illegal and void ab initio and liable to be quashed.

Followed:CIT v. Laxman Das Khandelwal (2019) 108 Taxman.com 183 (SC) : 2019 TaxPub(DT) 5081 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

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