SHRI JAYESHBHAI J. AMIN,ANKLESHWAR vs. THE INCOME TAX OFFICER, WARD-4, BHARUCH

PER BHAVNESH SAINI, J.M.

This appeal by assessee has been directed against

the Order of the Ld. CIT(A)-3, Vadodara, Dated 16.12.2016,

for the A.Y. 2011-2012, challenging the reopening of the

assessment under section 147/148 to be bad in law and

addition of Rs.9,86,746/- on account of unexplained

agricultural income.

2 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

partner in firm M/s. Gujarati Tyres and derives income by

way of remuneration, interest and share of profit. Return of

income was filed on 31.03.2013 declaring total income of

Rs.1,57,470/- (PB-102). The return of income filed was

processed under section 143(1) of the I.T. Act on 05.09.2013

(PB-102). The A.O. during the course of preceding A.Y. 2010-

2011 noted that there are cash deposits in the Bank Account

of the assessee which assessee failed to explain. The assessee

in their return of income filed for assessment year under

appeal had only shown income from PF and interest from SB

Account, but, no details of cash have been mentioned. The

A.O. therefore, reopened the assessment on account of

unexplained cash deposited in the bank account and issued

notice under section 148 of the I.T. Act on 10.05.2013. The

A.O. passed the ex-parte assessment order under section

144/147 of the I.T. Act on 27.03.2014 assessing the total

income at Rs.78,03,490/- by making additions on account of

unexplained agricultural income, unexplained cash deposit,

3 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

unexplained investment and undisclosed S.B. interest. The

Ld. CIT(A) partly allowed the appeal of assessee.

return could have been filed under section 139(4) of the I.T.

Act up to 31.03.2013, which, assessee has filed on

31.03.2013 which is also processed under section 143(1) on

05.09.2013, therefore, notice under section 143(2) could have

been issued for framing regular assessment upto 30.09.2013.

However, the A.O. before expiry of the said period itself issued

notice under section 148 of the I.T. Act on 10.05.2013,

therefore, re-assessment proceedings are bad in law and

liable to be quashed.

of the authorities below.

According to Section 139(4) of the I.T. Act admittedly the

assessee could have filed the return of income for assessment

year under appeal up to 31.03.2013. The assessee in this

case has filed original return of income on 31.03.2013 which

4 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

is also processed under section 143(1) on 05.09.2013

(PB102). According to proviso to Section 143(2) no notice

under section 143(2) shall be served on assessee after the

expiry of six months from the end of the financial year in

which the return is furnished. Therefore, the A.O. could have

issued notice under section 143(2) for scrutiny assessment of

return filed on 31.03.2013 up-to 30.09.2013. The A.O.

however issued notice under section 148 of the I.T. Act prior

to 30.09.2013 on 10.05.2013. It is well settled law that when

period for issue of notice under section 143(2) had not expire,

re-assessment order is invalid and relied upon Judgment of

Hon'ble Madras High Court in the case of CIT vs. Qatalys

Software Technologies Ltd., [2009] 308 ITR 2490 (Mad) in

which it was held as under :

"The assessee-company filed its return for the assessment

year 2003-04 on November 13, 2003, admitting a total

income of Rs.2,34,810 after claiming deduction under

section 10A of the Income-tax Act, 1961, in a sum of

Rs.3,09,382. The return was processed under section 143(1)

of the Act on December 20, 2003. Subsequently, the

5 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

assessment for the year 2003-04 was reopened by notice

dated October 5, 2004, on the ground that the assessee had

included interest received from the bank under profits of

business. The Assessing Officer issued notice under section

143(2) of the Act and completed the assessment on

December 23, 2005, including interest received from the

bank under "Income from other sources". This was confirmed

by the Commissioner (Appeals). The Tribunal held that the

reassessment proceedings were invalid as the time for

issuance of notice under section 143(2) had not expired. On

appeals :

Held, dismissing the appeals, that the Tribunal was right in

coming to the conclusion that the Assessing Officer was

barred from initiating reassessment proceedings under

section 147 when the time for issuance of notice under

section 143(2) had not expired.”

fact that at the time of issuing notice under section 148 of the

I.T. Act time for issuing of notice under section 143(2) had

6 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

not expired, therefore, re-assessment proceedings are invalid,

bad in law and liable to be quashed. Following the decision of

the Hon'ble Madras High Court in the case of CIT vs. Qatalys

Software Technologies Ltd., (supra), we set aside the Orders

of the authorities below and quash the reopening of the

assessment in the matter. Since the re-assessment

proceedings is invalid, therefore, no addition could be made

against the assessee. The issue on merit is left with academic

discussion. There is no need to give separate finding. Appeal

of assessee is allowed.

Order pronounced in the open Court.

Sd/- Sd/- (O.P.MEENA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Surat, Dated 22nd July, 2019

VBP/-

7 ITA.No.605/Ahd/2017 Jayeshbhai J Amin Gujarat Tyres, Ankleshwar, Gujarat.

Copy to

//By Order//

Asst. Registrar, ITAT, Surat Bench Bench.