SHRI GURUCHARAN SINGH,BHOPAL vs. THE ITO 3(1), BHOPAL

आदेश /O R D E R PER O.P. MEENA, AM. 1. Though these two appeals, the assessee has taken as many as 7 grounds of appeal however, ground 1 relates validity of assessment framed under section 147 for A.Ys. 2007-08 and 2008-09 which read as under:

Gurucharan Singh vs. ITO /ITA No.377 & 378/Ind/14 A.Y.07-08 Page 2 of 6

“That the Ld. CIT(A) had erred in facts and in law in

upholding the validity of assessment framed under

section 147. The reassessment completed on the

basis of notice u/s 143(2) of the Income Tax Act prior

to expiry of time u/s 143(2) issued is illegal.”

are identical, hence, we are discussing facts of A.Y. 2007-

08 in I.T.A No. 377/In/2014 which would also apply for

A.Y. 2008-09 in ITA No.378/In/2014 also. During the

course of hearing no one has appeared on behalf of the

assesse however written submissions were filed on

24.10.2016 with a request that same may be considered

while deciding the appeal, therefore, we considered the

same while adjudicating this appeal.

income on 21.08.2009 and notice u/s 148 of the Act was

issued to assessee on 01.09.2010 as per written

submissions it was submitted that a notice u/s 143(2) has

to be served before the expiry of 6 months from the end of

the F.Y. and which the return is furnished. Whereas in

case of appellant the proceedings u/s 148 were initiated on

Gurucharan Singh vs. ITO /ITA No.377 & 378/Ind/14 A.Y.07-08 Page 3 of 6

01.09.2010 i.e. before 30.09.2010 meaning by time of issue

of notice u/s 143(2) of the Act has not expired. The AO

should first exhaust the remedy available u/s 143(2) of the

Act. The act of issuing a notice u/s 148 prior to expiry of

time frame within which notice u/s 143(2) can be issued is

illegal as held by Madras High court in the case of CIT vs.

Qatalys Software Technologies (2009) 308 ITR 249 because

the return filed by assessee is only processed u/s 143(1)

but the proceedings cannot be said to have terminated,

action u/s 147 could not be initiated. The same view has

been expressed by Calcutta High Court in the case of

CESC Ltd. vs. DCIT (2003) 263 ITR 402 and also in case of

CIT vs. Rajendraji Shah 247 ITR 772 and Vipin Khanna vs.

CIT 255 ITR 220. In view of above, the notice issued and

served by the Ld. AO was abinitio void, invalid and bad in

law as the time of regular assessment was not elapsed and

the proceedings consequent to such invalid notice was bad

in law and, therefore, deserves to be quashed. The assessee

has also placed reliance on the decision of jurisdictional

I.T.A.T., Indore in the case of ITO vs. Vijay Boreeelles

(2008-10 ITJ-473-I.T.A.T. Indore) and also in the case of

Gurucharan Singh vs. ITO /ITA No.377 & 378/Ind/14 A.Y.07-08 Page 4 of 6

Nizam’s Supplemental Family Trust vs. CIT (2000) 242 ITR

381 (Hon'ble Supreme Court).

lower authorities.

on record. Ongoing, through written submissions of the

assessee, it is seen that the assessee has filed a return of

income on 28.08.2009 whereas the notice u/s 148 of the

Act was issued on 01.09.2010. We also noted that

according to provisions of section 143(2) as stood at the

relevant time for assessment year under consideration, the

notice u/s 143(2) can be served before the expiry of 6

months from the end of the F.Y. in which return was

furnished, therefore, in the instant case the return was

furnished during the F.Y. 2009-10. Accordingly, the notice

u/s 143(2) could be issued in this case on or before

30.09.2010. However, we find that before the issue of

notice u/s 143(2). The AO has issued a notice u/s 148 on

01.09.2010. When the time limit for normal assessment

u/s 143(3) was already available, therefore, assessment

u/s 147 which is extraordinary mechanism get when time

Gurucharan Singh vs. ITO /ITA No.377 & 378/Ind/14 A.Y.07-08 Page 5 of 6

limit for regular assessment u/s 143(3) was pending. The

assessee while filing written submission relied in the case

of Madras High Court in the case of CIT vs. Qatalys

Software Technologies (supra) and Hon'ble Calcutta High

Court in the case of CESC Ltd. vs. DCIT (supra), and

further reliance is placed in the case of CIT vs. TCP Ltd.

(2010) 235 CTR 414 (Mad) wherein it was held that notice

u/s 148 cannot be issued for making an assessment u/s

147 when time limit is available for issue of notice u/s

143(2) for making an assessment under section 143(3).

Similar ratio was also laid down in the case of Vipin

Khanna vs. CIT (Supra) and others relied by the assessee.

In the light of forgoing discussions, we are of the

considered opinion that proceedings u/s 147 initiated

when the time limit for issue of notice u/s 143(2) for

making regular assessment u/s 143(3) were available

hence the proceedings initiated u/s 147 by issue of notice

u/s 148 is void ab initio. Accordingly, assessment

proceedings are quashed for the A.Y. 2007-08 and 2008-

Gurucharan Singh vs. ITO /ITA No.377 & 378/Ind/14 A.Y.07-08 Page 6 of 6

Sd/- Sd/-

( C.M. GARG) (O.P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 11th August, 2017 Patel/PS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Assistant Registrar, Indore