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Income Tax Appellate Tribunal, SURAT BENCH : SURAT
Before: SHRI BHAVNESH SAINI & SHRI O.P. MEENA
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.
Briefly the facts of the case are that assessee is a
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.
Learned Counsel for the Assessee submitted that
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.
On the other hand, Ld. D.R. relied upon the Orders
of the authorities below.
We have considered the rival submissions.
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.”
Considering the above discussion, it is an admitted
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.
In the result, appeal of Assessee 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
The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT, Surat Bench, Surat 6. Guard File.
//By Order//
Asst. Registrar, ITAT, Surat Bench Bench.