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Issues involved: Appeal against order of CIT(A) on grounds of invalid assessment u/s 143(3) and merits of additions made.
Legal issue regarding assessment validity: The appeal raised a legal issue concerning the validity of the assessment u/s 143(3) of the IT Act, 1961, based on the service of notice under s. 143(2) within the prescribed period of one year. The appellant contended that the notice was not served within the statutory time limit, rendering the assessment invalid. Assessment of notice service: The appellant filed its income return on 29th Sept., 2003, and the Assessing Officer (AO) issued a notice under s. 143(2) on 11th Aug., 2004. The appellant denied receiving the notice and submitted an affidavit to that effect. The statutory requirement mandates serving the notice within one year from the end of the month of return filing, which was not met in this case. Failure to prove notice service: The Department failed to provide evidence of serving the notice within the 12-month statutory period as required by law. The appellant's affidavit denying receipt remained uncontested, highlighting the lack of proof of service. The absence of evidence supporting notice delivery led to the conclusion that the assessment based on such invalid notice is liable to be quashed. Precedents supporting quashing of assessment: Various legal precedents were cited to support the quashing of assessments based on failure to serve notices within the prescribed time limit. These cases emphasized the importance of proving notice service within the statutory period, failing which the assessment would be deemed invalid and void. Decision and outcome: Considering the legal principles and precedents, the Tribunal held that the assessment by the AO was invalid due to the failure to serve the notice under s. 143(2) within the statutory time limit. Consequently, the assessment was cancelled/quashed, partially allowing the appeal filed by the assessee.
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