Notice u/s 142(1)

rama krishnan (12244 Points)
Replied 03 September 2017

it can be opened by issuing notice u/s. 148 for assessing u/s. 147, if the assessee is not satisfied with reply in response to 142(1) notice

2 Like

Sumit Chakraborty (20 Points)
Replied 03 September 2017

142(1) must be replied. Or else Sec 144 Best Judgement Assessee can be invoked by A.O, without giving assesse any opportunity of being heard.

1 Like

Poltu Ghosh (Job) (1865 Points)
Replied 03 September 2017

If notice u/s 143 (2) was not issued the the assement becomes time barred. Then no notice for scrutiny assessment can be asked u/s 142 (1). If it is issued then the said notice is without any jurisdiction. No need to reply in response to said notice. Simply put a letter before the AO that the assessment became time barred and hence he has no jurisdiction to issue notice u/s 142 (1). He cannot pass any assessment order even u/s 144 in this case.

rama krishnan (12244 Points)
Replied 03 September 2017

142(1) notice has no Time limit. generally 142(1) notice issued to call for return of income if the assessee did not file return of income. in response to 142(1) notice, the assessee need to respond by filing return or his case can be opened for assessment under 147 and it can be completed under 144, if the assessee failed to file return in response to 148 notice. attn: mr. poltu, 142(1) notice can be issued for scrutiny assessment calling for certain details or return of income also...

CA Rajiv Poddar (k) (65 Points)
Replied 04 September 2017

I understand that 143(2) is time barred and since there is no time limit for 142(1) it is still valid. Now since the assesse has already filled the return before the due date, 142(1), is not issued for filing of return. It is asking for other documents. My question is what is the use of issuing 142(1) , if the return is already filled and 143(2) is time barred?

Poltu Ghosh (Job) (1865 Points)
Replied 04 September 2017

Section 142 (1) begins with the expression "for the purpose of making an assessment..." .So where a return is already filed and no assessment is pending inquiry u/s 142 (1) cannot be made. An assessment can be said to be pending if notice u/s 143 (2) or 148 etc is issued. In the given case no such notices were issued. So no assessment is pending thus no need to follow the notice u/s 142 (1). Such a notice is bad in law

rama krishnan (12244 Points)
Replied 04 September 2017

attn poltu: pls go through the section 142(1)
Inquiry before assessment.

142. [1] For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD orsection 139 or in whose case the time allowed under sub-section [1] of section 139for furnishing the return has expired a notice requiring him, on a date to be therein specified,—

[i] where such person has not made a return within the time allowed under sub-section [1] of section 139 or before the end of the relevant assessment year, to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner69 and setting forth such other particulars as may be prescribed, or :

rama krishnan (12244 Points)
Replied 04 September 2017

where the person failed to file return of income within time allowed u/s. 139(1), then AO can issue 142(1) calling for return. assessment pending proviso applies to only statutory notices in the whole income tax act i.e. notice u/s. 133 and summon u/s. 131.

CA Rajiv Poddar (k) (65 Points)
Replied 04 September 2017

The reading of 142(1) states that a AO can issue 142(1) notice even if the assesse has made a return u/s 139(1). This I think is clear - "For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD orsection 139"

Therefore, the notice u/s 142(1), even if the assesse has submitted the return u/s 139(1), is not bad in law. Further, as there is no time limit to issue notice u/s 142(1), this is not time barred as well.

142(1) states that "for the purpose of making an assessement......", now, if 142(1) is to be issued, it has to be issued prior to the time limit by which notice u/s 143(2) can be issued as the whole purpose of 142(1) is to make an assessment. Therefore, the moot question here is if 143(2) is already time barred, which is the use of issuing notice u/s 142(1)?

rama krishnan (12244 Points)
Replied 04 September 2017

if the return is already filed, unless the case is not selected for scrutiny, 142(1) notice cannot be issued.

1 Like

Sumit Chakraborty (20 Points)
Replied 04 September 2017

Agreed with Mr Krishnan

Sumit Chakraborty (20 Points)
Replied 04 September 2017

Agreed woth Mr Krishnan

CA Rajiv Poddar (k) (65 Points)
Replied 04 September 2017

It is agreed that 142(1) is bad in law and hence, the assesse may choose not to reply to the notice or just state that the notice is bad in law.

Now, if the assesse wants to reply, as he has all the documents ready, can AO further ask for more documents, of AO will just dispose off the case? If AO asks for more documents, can the assesse at that point of time say that the notice is bad in law?

Poltu Ghosh (Job) (1865 Points)
Replied 04 September 2017

AO can ask anything whether it is lawful or unlawful as done in this case by issuing a notice u/s 142(1) when in fact no assessment is pending.
But please tell me how the AO can dispose the case? Under which section will he pass the order? He cannot dispose the case.....