PEYUSHA SHUKLA,RAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, RAIPUR

CO 19/RPR/2024

AI Insights

The case revolves around the reassessment of Peyusha Shukla for the Assessment Year 2015-16, where the Deputy Commissioner of Income Tax (DCIT) added an amount of Rs. 3,05,19,169 as income under section 45 of the Income Tax Act, 1961, claiming it was undisclosed capital gain. This addition was initially contested and later deleted by the Commissioner of Income Tax (Appeals). The revenue appealed against this deletion, leading to the current proceedings. The primary legal contention was the validity of the notice under section 143(2), which was issued beyond the prescribed time limit, rendering the reassessment order void ab initio.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 106808 (ITAT-RAIPUR)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Other Referred Cases: ACIT Vs Hotel Blue Moon, ACIT vs. Akshay Lodha, CIT vs. Laxman Das Khandelwal, Amec Foster Wheeler Iberia SLU- India Project Office Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Assessee Lawyers: R. B. DOSHI
• Keywords: Set aside; Invalid notice; Question of law; Salary income; Capital Gains; Block assessment; Competent authority; Procedural lapse; Deduction for capital gain
• Section: 147; 148; 144; 143(3); 142(1); 143(2); 250; 143(1); 54; 251; 153; 68; 131; 54F; 13; 139; 145; 54EC; 20

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 454/RPR/2024 (िनधाŊरण वषŊ Assessment Year: 2015-16) Deputy Commissioner of Income Tax, Aayakar Bhawan, Civil Lines, Raipur-492001, C.G. V s Peyusha Shukla, VIP Road, Purena, Raipur, 492001, C.G. PAN: AJKPS0698B CO No.19/RPR/2024 (Arises out of ITA no. 454/RPR/2024) Peyusha Shukla, VIP Road, Purena, Raipur, 492001, C.G. V s Deputy Commissioner of Income Tax, Aayakar Bhawan, Civil Lines, Raipur-492001, C.G. PAN: AJKPS0698B (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri R. B. Doshi, CA राजˢ की ओर से /Revenue by : Shri S. L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 09.01.2025 घोषणा की तारीख/Date of Pronouncement : 28.02.2025 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal of the revenue is directed against the order of Commissioner of Income Tax (Appeals), NFAC, Delhi, u/s 250 of the Act, dated 27.08.2024 for the Assessment Year 2015-16, which in turn arises from the order passed by Assessing Officer, NFAC, Delhi u/s 147 r.w.s. 144B of 2 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur the Act, dated 30.03.2022. The captioned Cross objection (CO) is filed by the assessee in support of the impugned order of Ld. CIT(A) and against the instant appeal by the revenue. 2. The ground of appeal raised by the revenue are as under: 1. Whether on the facts and in the circumstances of the case Id. CIT(A) was justified in deleting the addition of Rs.3,05,19,169/- made by the AO as income u/s 45 of the IT Act, 1961? 3. The grounds of Cross Objections by the assessee are as under: 1. Without prejudice to addition deleted by the Ld. CIT(A) on merits, the reassessment order passed by the AO is illegal and void ab-initio inasmuch as notice u/s 143(2) was not issued by AO within prescribed time. The reassessment order being illegal deserves to be quashed. 2. The cross objector reserves the right to add, amend or alter any of the ground/s of cross objection. 4. The brief facts of the case are that “Smt. Peyusha Shukla”, the assessee is an individual, has filed her Return of Income (ROI) for the AY 2015-16, electronically on 28.12.2015, declaring total income of Rs.36,64,280/-. During the year under consideration, the assessee had derived income from salary, house property and capital gain. Subsequently, the survey was conducted in the case of M/s Green Wood Four Seasons Pvt. Ltd. (GWFSPL) on 01.05.2017. During the course of survey and the post 3 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur survey proceedings, the statement of Smt. Peyusha Shukla, who happen to be the Managing Director of the company “GWFSPL” was recorded u/s 131 of the Income Tax Act on 01.05.2017 and 16.05.2017. On verification, it was revealed that Smt Peyusha Shukla, the assessee had claimed a deduction u/s 54F of the Act in her ITR amounting to Rs.3,05,19,169/- in AY 2015-16. Further, as per statement of assessee recorded on 16.05.2017, it was stated that for FY 2013-14 and 2014-15 relevant to AY 2014-15 and 2015-16, she had declared income of Rs.3.70 Crore on account of capital gain, which was subjected to claim of deduction u/s 54EC and 54F of the I. T. Act, however, the funds to be applied as per the provisions of section 54EC and 54AF were utilized on construction of Farm House and in the business, which is not allowable under the provisions of law, hence she agreed to pay tax on declared income on account of capital gain for the above AY i.e., 2014-15 and 2015-16. 5. In view of aforesaid admission by the assessee, jurisdictional Assessing Officer reopened the case of assessee u/s 147 of the Act, after reasons to believe on escapement of income and obtained necessary approval from the competent authority. In due course, notice u/s 148 of the I. T. Act was issued on 28.08.2021. In response, returned was filed by the assessee for AY 2015-16. Further notices u/s 142(1) were issued on 16.11.2021 and 01.02.2022 requiring the assessee to furnish certain details. In reply, assessee 4 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur furnished acknowledgment of ITR and Income Computation of AY 2015-16. Accordingly, further information regarding claimed deduction u/s 54F was requested, however, no reply was furnished by the assessee, therefore, another 142(1) was issued on 05.03.2022, in response to which it was submitted by the assessee before the Ld. AO that survey proceedings u/s 133A in the case of M/s GWFSPL was conducted on 01.05.2017 and the assessee Smt. Peyusha Shukla, who was also a Managing Director of the said company has disclosed to sum of Rs.3,05,19,169/- for FY 2014-15, as undisclosed capital gain for the respective FY in her hands but the assessee offered the entire capital gains of Rs.3,70,19,169/- while filing her return of income for the AY 2018-19 stating that disclosure was made in consequence of survey which took place during the FY 2017-18 and the year in which the said property was brought under commercial use. However, such submission of the assessee was not finding favour with the Ld. AO, therefore, he observed that, the action of assessee was not correct under the provisions of Income Tax Act and that the assessee should have offered Rs.3,05,19,169/- for the AY 2015-16 for taxation, the year in which the capital gain was accrued to the assessee. Ld. AO further discussed the provisions of section 54 and 54F and after deliberations have concluded the assessment by making the addition of Rs.3,05,19,169/- in the hands of assessee for the AY 2015-16. 5 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 6. Aggrieved with the aforesaid addition made by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein the contention of assessee qua the addition made by the Ld. AO were found acceptable, therefore, the addition made by Ld. AO on account of denial of claim u/s 54F has been vacated by Ld. CIT(A). The relevant observations of Ld. CIT(A) while vacating the addition are culled out here under for the sake of clarity and completeness of facts: 5.3.3 I have perused the assessment order as well as above submission of the appellant. During the course of assessment proceedings, the assessee in its reply dated23.03.2022 submitted the building construction permission certificate along with layout plan, land use conversion certificate along with other documents in support other claim that the said building (Van Awas) was being constructed by the assessee for residential purpose only (and according to the layout plan submitted), and for which reason the capital gain proceeds invested into it are justified for deduction claim u/s54F. However, from the Google Earth image of 2015, the AO had concluded that the assessee was constructing building on the said land for commercial purpose from very beginning. 5.3.4 Following points emerge from the submission of the appellant: 1. There is no dispute that the assessee had earned capital gains in the previous year, relevant to above assessment year. 2. In the F.Y. 2017-18 the land use of the residential property was converted into commercial. The documentary evidence in support thereof had already been submitted, which shows that it is only in the F.Y 2017-18, the land use has been converted and property were brought under commercial use. 3. As per the assessee, in the second para of the order, it has been mentioned that during survey proceedings in the statement recorded under oath, she had stated that capital gain was invested by her in business. The assessee 6 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur has submitted English translation of her statement, which was recorded in Hindi is as under: \"I have to say in this matter that I had declared total capital gain of Rs 3.70 crores in FY 13-14 and FY 14-15 and I had correctly taken the deduction under section 54F in accordance with rules. However, in the current financial year, I have taken permission for using the house. for commercial use. Hence the house is now being used for commercial purpose. Hence, I am ready to offer the deduction earlier claimed to tax.\" As per the assessee, draft order based on own interpretation of facts by the AO is wholly incorrect, not based on facts and is thus it is not acceptable. The draft order presupposes that my claim of deduction was incorrect. This is not factually correct. The fact is that I merely applied .and took permission for using the house for commercial purposes i.e. for letting out for commercial use that too in FY 17- 18 and not earlier. Screen shot of statement recorded on 16/05/2017 is given below for ready reference: 7 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur During the course of survey proceedings in the case of M/s Green Wood Four Seasons Pvt. Ltd., The assesse, MD of the Company agreed to offer back the capital gain deduction earlier claimed in financial year 2013-14 and 2014-15 in the year in which the conversion of land use from residential to commercial took place. 4. As per the asseessee, law is very clear on this, that in case the residential house, on which the deduction under section 54F is claimed, is transferred within the stipulated period, then in the year it is transferred the taxability of the earlier capital gain claimed will arise. Hence where there is a clear provision in the Act, there is no reason for Assessing Officer to doubt the intention of the 8 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur assessee and burden her with the tax liability which she has already discharged in financial year 2017-18. 5. The Assessing Officer has given Google images in the assessment order. The appellant contended that if an assessee has earned capital gain of Rs.100 and the same has already been spent in purchase of land for the house and in construction of the house, the law clearly confirms that the completion of the house can happen over a period of three years from the date of sale of original asset. The AO has not given any contrary findings regarding completion of construction. The assessee has submitted that she has followed all the provisions of section 54F and has accordingly claimed the deduction. The house has been completed well within the 3 years period stipulated in the section 54F. The assessee has offered to tax the amount of capital gain, in the year in which the land use has been changed from residential to commercial. 6. It is submitted that the property in question has been used by the appellant for commercial purposes only from the financial year 2017-18. It is important to note that the necessary approvals from the State Authority for conversion from residential to commercial by paying applicable charges were obtained and submitted during the original assessment proceedings.. 7. The appellant has already offered tr Jqs6me for taxation in the year in which the conversion from residential to commercial took place i.e., FY 17-18. The same was accepted by the AO after scrutiny assessment for the AY 2018-19. In view of above, the appellant requested that she should not be subjected to double taxation on the same income. The assessee has already paid tax in AY 2018- 19 on long term capital gain @20% of 3,05,19,169/-. The learned AO passed the order without considering this fact. In light of the aforementioned facts and arguments and the provisions of Section 54F, appellant has requested to delete the addition. 5.3.5 It is clear from above that the assessee has submitted the building construction permission certificate along with layout plan, land use conversion certificate along with other documents in support of its claim that the said building (Van Awas) was being constructed for residential purpose only and for which reason the capital gain proceeds invested into it are justified for deduction claim u/s54F. Further, the assessee has also submitted that property in question was used by the appellant for commercial purposes only from the financial year 9 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 2017-18. It is important to note that the necessary approvals from the State Authority for conversion from residential to commercial by paying applicable charges were also submitted during the original assessment proceedings. It clearly indicated that nature of the property was residential or.ly, which was converted into commercial with effect from FY 2017-18. 5.3.6 The appellant has already offered the income for taxation in the year in which the conversion from residential to commercial took place i.e., FY 17- 18.The same was accepted by the AO after scrutiny assessment for the AY 2018- 19. Therefore, denial of claim u/s 54 F of the Act in the AY 2015-16 will result in double taxation of same income. 5.3.7 Further, it is also found from the perusal of post survey statement of the assessee dated 16.05.2017that she has honoured the disclosure made during survey in the case of M/s Green Wood Four Seasons Pvt. Ltd. 5.3.8 In the light of the above, it is clear that, the appellant has duly submitted all the evidential documents in order to prove the genuineness of the claim u/s 54F of the Act. Hence, after perusal of the submission made and taking into account the entire conspectus of this case including the various judicial pronouncements, I see no reason to uphold with the findings of the assessing officer regarding addition on account of denial of claim u/s 54F of Rs. 3,95,19,169/-. Hence, ground of appealno.2 on merit is Allowed. 7. As relief is granted by the Ld. CIT(A) to the assessee by vacating the addition of Rs.3,05,19,169/- made by the Ld. AO, on account of Capital Gain by refusing the claim of deduction u/s 54F of the Act, aggrieved thereby, the revenue preferred an appeal before us, which is under consideration in the present case. 10 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 8. To adjudicate the present matter, first we shall be taking up the legal issue raised in cross objection filed by the assessee. At the outset, Shri R. B. Doshi, CA, Ld. Authorized Representative on behalf of the assessee, (in short “Ld. AR”), submitted that in the present case the assessment was framed u/s 147 r.w.s. 144B on 30.03.2022. Notices u/s 148 was issued on 28.03.2021 (copy placed before us at page no. 61 of APB), in response to which a returned was filed by the assessee on 31.03.2021 (copy at page no. 62 of APB). Ld. AR further took us to page no. 69 of APB, consisting therein a copy of notice issued u/s 143(2) dated 20.11.2021, i.e., after 7 months and 20 days from the end of the FY in which a return in response to the notice u/s 148 was filed (31.03.2021). Ld. AR further submitted that as per provisions of 1st proviso to section 143(2), the notice under the said section was mandatory to be issued within 3 months from the end of the FY in which the return is furnished i.e., by 30.06.2021, whereas in the instant case, the notice u/s 143(2) was issued on 20.11.2021. The relevant portion of notice u/s 143(2) and the return filed in response to notice u/s 148, showing date of issuance of notice and date of filing of return are extracted as under: 11 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 9. In view of aforesaid evidence, on this issue, it was the submission by Ld. AR that as the notice u/s 143(2) was not issued within the prescribed period which is a prerequisite for framing the assessment u/s 147 r.w.s. 144B, the reassessment order passed by Ld. AO in the present case was illegal and void ab initio on account of issuance of notice u/s 143(2) not within the prescribed period therefore, barred by limitation, thus, the assessment framed on the foundation of such illegal/ void ab initio notice is at nullity and liable to be quashed. Ld. AR on this aspect, placed his reliance on the order of Hon’ble Supreme Court of India in the case of ACIT Vs Hotel Blue Moon, reported (2010) 321 ITR 362 (SC), dated 02.02.2010, wherein while considering the same question of law raised by the revenue, Hon’ble Apex Court had held as under: \"(1) Whether, on the facts and in circumstances of the case the issuance of notice under section 143(3) of the Income-tax Act, 1961 within the prescribed time- limit for the purpose of making the assessment under section 143(3) of the Income-tax Act, 1961 is mandatory? And 12 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur (2) Whether, on the facts and in the circumstances of the case and in view of the undisputed findings arrived at by the Commissioner of Income-tax (Appeals), the additions made under section 68 of the Income-tax Act, 1961 should be deleted or set aside.\" 15. We may now revert back to Section 158 BC(b) which is the material provision which requires our consideration. Section 158 BC(b) provides for enquiry and assessment. The said provision reads \"that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, sub- section (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply.\" An analysis of this sub section indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under Sections 143(2)/142 and complete the assessment under Section 143(3). This Section does not provide for accepting the return as provided under Section 143(i)(a). The assessing officer has to complete the assessment under Section 143(3) only. In case of default in not filing the return or not complying with the notice under Sections 143(2)/142, the assessing officer is authorized to complete the assessment ex-parte under Section 144. Clause (b) of Section 158 BC by referring to Section 143(2) and (3) would appear to imply that the provisions of Section 143(1) are excluded. But Section 143(2) itself becomes necessary only where it becomes necessary to check the return, so that where block return conforms to the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under Section 143(2). However, if an assessment is to be completed under Section 143(3) read with Section 158-BC, notice under Section 143(2) should be issued within one year from the date of filing of block return. Omission on the 13 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. The other important feature that requires to be noticed is that the Section 158 BC(b) specifically refers to some of the provisions of the Act which requires to be followed by the assessing officer while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This Section even speaks of subsections which are to be followed by the assessing officer. Had the intention of the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have or could have indicated that also. A reading of the provision would clearly indicate, in our opinion, if the assessing officer, if for any reason, repudiates the return filed by the assessee in response to notice under Section 158 BC(a), the assessing officer must necessarily issue notice under Section 143(2) of the Act within the time prescribed in the proviso to Section 143(2) of the Act. Where the legislature intended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14 August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression \"So far as may be\" in Section 153 BC(b), the issue of notice is not mandatory but optional and 14 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation made by this Court in Dr. Pratap Singh's case [1985] 155 ITR 166 (SC). In this case, the Court has observed that Section 37(2) provides that \"the provisions of the Code relating to searches, shall so far as may be, apply to searches directed under Section 37(2). Reading the two sections together it merely means that the methodology prescribed for carrying out the search provided in Section 165 has to be generally followed. The expression \"so far as may be\" has always been construed to mean that those provisions may be generally followed to the extent possible. The learned counsel for the respondent has brought to our notice the observations made by this Court in the case of Maganlal Vs. Jaiswal Industries, Neemach and Ors., [(1989) 4 SCC 344], wherein this Court while dealing with the scope and import of the expression \"as far as practicable\" has stated \"without anything more the expression `as far as possible' will mean that the manner provided in the code for attachment or sale of property in execution of a decree shall be applicable in its entirety except such provision therein which may not be practicable to be applied.\" 16. The case of the revenue is that the expression 'so far as may be apply' indicates that it is not expected to follow the provisions of section 142, sub- sections (2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the revenue, since we do not see any reason to restrict the scope and meaning of the expression 'so far as may be apply'. In our view, where the Assessing Officer in repudiation of the return filed under section 158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143. 15 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 17. Section 158BH provides for application of the other provisions of the Act. It reads : \"Save as otherwise provided in this Chapter, all the other provisions of this Act shall apply to assessment made under this Chapter\". This is an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. The provisions which are specifically included are those which are available in Chapter XIV-B of the Act, which includes section 142 and sub-sections (2) and (3) of section 143. 18. On a consideration of the provisions of Chapter XIV-B of the Act, we are in agreement with the reasoning and the conclusion reached by the High Court. 19. The result is that the appeals fail and are dismissed. No order as to costs. 10. Ld. AR further placed his reliance on the order of coordinate bench of ITAT, Raipur in the case of ACIT vs. Akshay Lodha in ITA No. 160/RPR/2022 dated 27.10.2023, wherein the issue is deliberated upon by the tribunal, taking support from the principle laid down by the Hon’ble Apex Court in the case of ACIT Vs Hotel Blue Moon (supra), had observed as under: 22. Although we have quashed the assessment for want of valid assumption of jurisdiction by the A.O. but for the sake of completeness, we shall now deal with the claim of the Ld. AR that the assessment order passed u/s. 147 r.w.s. 143(3) of the Act dated 28.10.2016 in absence of a valid notice issued u/s. 143(2) of the Act was even otherwise liable to be quashed. 16 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 23. As observed hereinabove, the A.O. had framed the assessment order u/s.147 r.w.s. 143(3) of the Act dated 28.10.2016 on the basis of notice u/s. 143(2) of the Act dated 13.10.2016. Admittedly, the notice u/s.143(2) of the Act could have been issued to the assessee by 30.09.2016. As observed by us hereinabove, the Ld. DR, on being confronted with the aforesaid claim of the assessee's counsel, could not rebut the same. As the impugned assessment in the case of the assessee had been framed in the absence of any valid notice u/s.143(2) of the Act, which is the foundation for passing a valid assessment order, we find substance in the claim of the Ld. AR that the impugned order passed by the A.O u/s. 147 r.w.s. 143(3) of the Act dated 28.10.2016 could not be sustained on the said count itself and was liable to be struck down. Our aforesaid view that the issuance of a valid notice u/s. 143(2) is a sine-qua-non for framing of a valid assessment u/s. 143(3) of the Act is fortified by the judgments of the Hon'ble Supreme Court in the case of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) and CIT v. Laxman Das Khandelwal (2019) 417 ITR 325(SC). 11. In backdrop of aforesaid submission, it was the prayer by Ld. AR that as the issue is squarely covered by the order of this tribunal in the case of ACIT vs. Akshay Lodha (supra), since the notice u/s 143(2) was not issued within the prescribed period as mandated under the law, therefore, the assessment framed on the foundation of an illegal notice cannot be sustained, therefore, the same needs to be struck down. 17 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 12. Per contra, Shri S. L. Anuragi, Ld. CIT-DR representing the revenue had requested to obtain a report from the Ld. AO along with assessment records so as to look into the matter and to substantiate that the notice u/s 143(2) was issued in accordance with the provisions of law within the limitations laid down. On this issue, a report prepared by the Ld. AO dated 08.01.2025 was furnished before us, the same is culled out hereunder for the sake of completeness of facts and to consider the contention of the revenue: 18 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 19 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 20 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 13. Based on aforesaid report, it was the prayer by Ld. CIT-DR that the notice u/s 143(2) of the Act was issued within the prescribed time limit, therefore, the legal ground raised by the Ld. AR needs to be rejected at the threshold and matter may be adjudicated on its merits. 14. We have considered the rival submissions, perused the material available on record and judicial pronouncements relied upon by the Ld. AR. To decide the issue raised by the Ld. AR in the cross objection of the assessee, the relevant provisions of the Act are extracted hereunder: Section 143(2): Applicable on the date of issuance of notice (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of 86[three] months from the end of the financial year in which the return is furnished.( 86. Sub. for \"six\" by the Act No. 13 of 2021, w.e.f. 1-4-2021.) 21 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur Section 148 148. [(1)] Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, 7[* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] [Provided that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case— (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub- section (2) of section 143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] [Explanation.—For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.] [(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.] 22 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 15. On perusal of and after a conjoint reading of the aforesaid provisions, it can be safely gathered that at the relevant point of time i.e., AY 2015-16, the time limit of issuance of notice u/s 143(2) within a period of one year but before the expiry of the time limit for making the assessment, which was prescribed under the Act in clause (b) of 1st proviso to section 148 was no more applicable in the year under consideration as have become otiose by insertion of explanation effective from 01.10.2005 that, “For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.” In view of the said explanation, the issuance of notice u/s 143(2) which is qua the returns filed u/s 139 of the Act shall apply in cases where the returns are filed u/s 148 also, as going by the provisions of section 148, it is clarified that, the provisions of the Act shall, so far as may be, apply accordingly as if such return (u/s 148 r.w.s. 139) were a return required to be furnished under section 139. 16. Accordingly, in the present case which pertains to AY 2015-16, for issuance of notice u/s 143(2), the time limitation as provided proviso to sub- clause (ii) of section 143(2) shall be applied, which have come into existence effective from 01.04.2021, reads as under: 23 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur “Provided that no notice under this sub-section shall be served on the assessee after the expiry of [three] months from the end of the financial year in which the return is furnished.” 17. Adverting the facts of present case, the Return of Income in response to notice u/s 148 was filed by the assessee on 31.03.2021, and the notice u/s 143(2) was issued on 20.11.2021, which in accordance with the applicable provisions of proviso to sub-clause (ii) of section 143(2) was to be issued within 3 months i.e., on or before 30.06.2021, however, the notice was issued on 20.11.2021, beyond the prescribed time as per aforesaid provisions, thus, was barred by limitation. The explanation by the revenue that the notice u/s 143(2) was issued within period of 1 year from the end of the month in which the return was furnished cannot be accepted as the same was not substantiated or supported by any material, decision or the mandatory provisions of the Act. Therefore, undoubtedly, the notice issued u/s 143(2) was beyond the prescribed time under the provisions of section 143(2), which needs to be strictly adhered to by the revenue. On this issue, the observations of Hon’ble Apex Court in the case of ACIT Vs. Hotel Blue Moon (supra), which was further supported by the view taken by Hon’ble Apex Court in the case of CIT Vs. Laxman Das Khandelwal, (2019) 417 ITR 325 (SC), 13.08.2019, wherein Hon’ble Apex Court has referred to the judgment in the 24 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur case of ACIT vs Hotel Blue Moon, and had affirmed the proposition laid down therein. As this issue has come up before this tribunal also and a view is adopted in the case of ACIT Vs. Akshay Lodha (supra), that an assessment framed in absence of any valid notice u/s 143(2) of the Act, whether issued beyond the prescribed time under the provisions of Act or notice, both stands at same footing, as held by Hon’ble High Court of Madras in the case of Amec Foster Wheeler Iberia SLU- India Project Office Vs. DCIT, (2023) 251 ITR 117 (Mad) (16.11.2022), it is further held by Hon’ble Madras HC in the aforesaid case that “if no notice is issued within 6 months (for present case 3 months), the revenue must face the consequence of this, irrespective of whether a notice has been issued belatedly or no notice has been issued at all”. In view of such observations of Hon’ble Madaras HC, as in the present case the notice was issued belatedly beyond the prescribed time of 3 months applicable in the present case, as the notice was issued after 01.04.2021, i.e., on 20.11.2021, the same falls under the category of any invalid notice, which is the foundation of passing a valid assessment order, therefore, the assessment order passed in the present case on the strength of an invalid notice u/s 143(2), cannot sustained and liable to be struck down. 18. Respectfully following the principle of law laid down by Hon’ble Apex Court, in the Judgments referred to supra, which is followed by ITAT, Raipur 25 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur in the case of ACIT Vs. Akshay Lodha (supra), further supported by the judgment of Hon’ble Madras HC in the case of Amec Foster Wheeler Iberia SLU- India Project Office Vs. DCIT (supra), in absence of any plausible explanation or contradictory material or decision to dislodge the aforesaid view, we find substance in the contention of the Ld. AR in the cross objection that in absence of a valid notice u/s 143(2), which was not issued within the prescribed time limit for the purpose of making the assessment is a violation of mandatory provisions of law, therefore, the reassessment impugned order passed u/s 147 r.w.s. 144B of the Act dated 30.03.2022, dehors a valid notice u/s 143(2) is a nullity and liable to be quashed. 19. Considering the aforesaid facts, circumstances and observations, the first ground of the cross objection filed by the assessee is allowed and the impugned assessment order stands quashed. 20. As the impugned reassessment order u/s 147 r.w.s. 144B dated 30.03.2022 is quashed by us in terms of our aforesaid observations, therefore, the ground of appeal raised by the revenue against the impugned order of Ld. CIT(A) and in support of the impugned reassessment order became infructuous, resultantly, the appeal filed by the revenue, stands dismissed. 26 ITA No. 454/RPR/2024 and CO No. 19/RPR/2024 DCIT Vs. Peyusha Shukla, Raipur 21. In combined result, ITA No. 454/RPR/2024 of revenue is dismissed and CO No.19/RPR/2024 of assessee is allowed. Order pronounced in the open court on 28/02/2025. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 28/02/2025 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- DCIT, Raipur 2. ŮȑथŎ / The Respondent- Peyusha Shukla, Raipur 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // सȑािपत Ůित True copy // "