INCOME TAX ACT, 1961

Section 153C Section 143(2) Section 142(1)/263

Search and seizure - Assessment under section 153C - Notices under section 143(2)/142(1) not issued/served - Order under section 263 not challenged

Assessee stated that CIT(A) was not justified in upholding assessment order passed by AO without issuing any notice under section 143(2) or 142(1) nor providing copy of the seized material on the basis of which notice/ under section 153C was issued and the alleged addition was made, in spite of specific request made by the assessee before AO as well before CIT(A). M/s. Khayati Sales Agency (P) Ltd. (assessee) was also searched and subsequently notice under section 153C was issued to assessee. Assessee failed to file the return of income and also failed to file the reply in response to the notice under section 153C. After providing the several opportunities, the assessment under section 144/142(1) read with section 153C was passed assessing total income to the tune of Rs. 11,32,195. CIT observed that the huge money transactions are reflected in the assessee's bank account. It was further observed that the amounts credited in the bank account through cheques were withdrawn immediately thereafter. Thereafter, the show-cause notice under section 263 was served upon the assessee. The order passed under section 144/142(1) read with section 153C was set aside and AO was directed to rectify the matter and to decide the matter afresh.Held: Assessee nowhere challenged the order passed under section 263. Since assessee failed to challenge the order under section 263, therefore, non-issuance of notice under section 143(2)/142(1) and not supplying the copy of seized material under section 153C had no consequences being the order passed by AO having already been set aside by CIT wherein the CIT had invoked the provisions under section 263. Further, the AO accorded the opportunity of being heard to the assessee by virtue of notice dated 1-3-2016 which had been mentioned in para No. 7 of the assessment order. It was also noticed that the assessee nowhere represented before the AO seeking any legal relief. In view of the discussion made above, the CIT(A) had rightly recorded the finding on the legal issue which was not liable to be interfered and with at this appellate stage. Accordingly, this issue was decided in favour of the revenue and against the assessee.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2006-07 to 2009-10

INCOME TAX ACT, 1961

Section 68 Section 263

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