2016 (12) TMI 1632 - AT - Income Tax

Reopening of assessment - statutory notice u/s 143(2) was not served to the assessee - Held that - Considering the passive admission of the AO on the issue of the non-issuance of the statutory notice u/s 143(2) of the Act, which provides the basic jurisdiction in matters of scrutiny assessment, this is not a curable defect as argued by the Ld DR for the Revenue. Further, as discussed the said provisions of section 292BB do not provide jurisdiction to the AO from the duty of issue of service of statutory notice u/s 143(2) of the Act. It does not, in any way, insulate the AO from default in issuing notice u/s 143(2) of the Act within the period of limitation contemplated therein. Considering the same, we are of the opinion, all the four appeals of the assessee are required to be allowed on technical grounds.

Summary

Issues Involved:
- Jurisdictional issue regarding notice u/s 143(2) of the Act

Detailed Analysis:

Jurisdictional Issue Regarding Notice u/s 143(2) of the Act:
The appellant, a non-resident fund, filed appeals for assessment years 2006-07, 2007-08, 2008-09, and 2010-11, challenging the denial of benefits under the India-Netherlands Double Taxation Avoidance Agreement (DTAA). The primary contention revolved around the non-service of the statutory notice u/s 143(2) by the Assessing Officer (AO). The appellant argued that without such notice, the AO lacked the authority to proceed with inquiries under section 148 of the Act. The appellant relied on various legal precedents to support this argument. On the other hand, the Revenue contended that the appellant was aware of the reassessment proceedings and had not raised objections regarding the notice during the assessment process. However, the AO's letter did not provide clear evidence of serving the notice u/s 143(2) as required by law. The Tribunal, after considering arguments from both sides and legal precedents cited, concluded that the absence of the statutory notice u/s 143(2) was a jurisdictional defect that could not be cured by section 292BB of the Act. The Tribunal emphasized that the AO's passive admission of not issuing the notice was crucial, and the jurisdictional issue was not merely a technicality. Therefore, the Tribunal allowed the appeals on technical grounds, emphasizing the importance of complying with statutory requirements for jurisdiction.

In conclusion, the Tribunal allowed all four appeals of the assessee based on the jurisdictional issue regarding the non-service of the statutory notice u/s 143(2) of the Act. The decision highlighted the significance of adhering to procedural requirements for maintaining jurisdiction in assessment proceedings.