RISHI ANAND,KOLKATA vs. I.T.O., WARD - 33(2), KOLKATA, KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals)(hereinafter referred to as the “Ld. CIT(A)”] dated 06.02.2025 for the AY 2018-19. 02. At the time of hearing, the learned Counsel of the assessee pressed the legal issue raised in round number 3, which is extracted as under: -
“3. For that the ld. CIT (A) erred in upholding the assessment order which was passed without issuing notice u/s 143(2) despite valid return being filed in response to notice u/s 148.”
03. The facts in brief are that the assessee did not file the return of income under section 139(1) of the Act. Thereafter, the notices under section 148 of the Act was issued on 26.3.2022, in consequence to Rishi Anand; A.Y. 2018-19

passing of an order under section 148A(d) of the Act on 26.3.2022, recording therein that income of the assessee has escaped assessment within the meaning of section 147 of the Act.In response, the assessee filed the return of income on 13.3.2023, declaring total income at ₹19,17,000/- which was treated as non-est by the ld. CIT
(A) on the ground that the assessee has not filed the return of income within the prescribed time limit. Thereafter, the assessee furnished before the Learned AO the details/ information / explanations as called called for, and finally the Learned AO assessed the income of the assessee at ₹97,07,955/- after taking the total income as declared in the return of income filed in response to notice under section 148 of the Act on 13.3.2023 and making additions thereto. We note that the notice under section 143(1) of the Act was issued couple of times on 17.10.2022 and 11.11.2022 and the assessee had replied the same.
Thereafter on 3.3.2023, show cause notice was issued and the same was replied by the assessee on 13.3.2023 and 14.3.2023. The notice under section 142(1) of the Act was issued, requesting the assessee to furnish the details of documents as per the return of income.
04. The said order of the Learned AO was affirmed by ld. CIT (A).
The Learned CIT (A) dismissed the appeal of the assessee on legal issue by observing and holding as under: -
“Ground No. 2 and 3: Return was filed and no notice u/s 143(2) issued
2.4 The appellant has stated that return was filed in response to notice u/s 148 and no notice uls 143(2) was issued. In this regard the AO has clearly specified that in response to notice dated 26-03-2022 a return was filed on 13-03-2023 which was beyond the prescribed time limit and hence treated as invalid. Since the return was treated as invalid there is no scope for issuing notice u/s 143(2) as there was no valid return of income. Therefore, Ground No. 2 and 3 are dismissed.”
05. After hearing the rival contentions and perusing the materials available on record, we find that in this case though the assessee has not filed the return of income within the time limit allowed in the Rishi Anand; A.Y. 2018-19

above notice as issued under section 148 of the Act on 26.3.2022. Nonetheless the assessee filed the return of income on 13.3.2023, declaring total income at ₹19,14,770. The ld. AO treated the return as non-est for the reason that the assessee had not filed the return within the prescribed time limit. However, we further note that the income shown in the return of income filed u/s 148 of the Act ,which was treated by the AO as non est, had been taken for computation of total income by the AO. The relevant finding of the ld. AO is given in Para no.4.2 is extracted below: -
“4.2
In response to the notice issued u/s 148 of the Act, the assessee has filed his return for A.Y. 2018-19 vide Ack. No. 981038840130323 on 13.03.2023 declaring total income at ₹19,14,770/- and the same is treated as non-east as the assessee has not filed his ITR within the prescribed time limit, however the income shown by the assessee is taken for computation of income.”
06. In our opinion, if the return of income filed by the assessee in response to notice under section 148 of the Act beyond the due date time which has been treated as non-est, then the basis for computation of income cannot be taken from the said return.
Therefore, the action of the ld. CIT (A) is wrong and unsustainable in the eyes of law. We also note from the Para 11 of the assessment order that the ld. AO had taken the income as per ITR filed in response to notice under section 148 of the Act as the basis for computation and then made the additions thereto. Therefore, the order of the ld. CIT (A) cannot be sustained. The case of the assessee finds support from the decision of Delhi High Court in the case of PCIT
Vs. M/s Dart Infrabuild (P) Ltd. in ITA No. 10/2022 Order dated 17-
11-2023 wherein, via Para 15.1, the Hon'ble Court held that where the return of income filed by the assessee is not disputed and the ROI has taken into account, then before framing the assessment order, the AO ought to have issued the notice under section 143(2) of the Act. The relevant part is extracted below: -
Rishi Anand; A.Y. 2018-19

“15.1 The respondent/assessee became aware of the Section 148 notice being issued after it received the notice dated 12.06.2015 under Section 142(1) of the Act. The fact that the respondent/assessee had filed an ROI on 04.12.2015 is not disputed. The fact that this ROI, as noticed above, was taken into account is also not in dispute.
Therefore, in our opinion, before framing an assessment order, the AO ought to have issued a notice under Section 143(2) of the Act. The submission advanced on behalf of the appellant/revenue that, while it could consider the invalid return while framing the assessment order, it was not obliged to issue a notice under Section 143(2) of the Act because it was not filed within the timeframe given in the Section 148 notice is untenable in law, since the ROI, which was belated, was considered by the AO while carrying out the assessment.”
07. Consequently, we quash the assessment framed by the Learned
AO.
08. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 15.09.2025. (PRADIP KUMAR CHOUBEY)
(RAJESH KUMAR)
(JUDICIAL MEMBER)
(ACCOUNTANT MEMBER)

Kolkata, Dated:15.09.2025
Sudip Sarkar, Sr.PS
Copy of the Order forwarded to:

BY ORDER,//

Sr. Private Secretary/ Asst.