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2015 (3) TMI 358 - AT - Income TaxNon issuance of notice u/s 143(2) - Reassessment u/s 147 - Revenue contended that ground of non-issuance of notice u/s 143(2) by the A.O. was not raised either before the AO or before the Ld.CIT(A) - Held that - In the instant case, admittedly, the notice under section 143(2) has been issued beyond the period of one year from the date of filing of the return. Further, it may be mentioned that omission on the part of the assessing officer 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 as already observed in Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA). Thus no other alternative but to hold that, the AO has wrongly assumed jurisdiction under the Act, for all these Assessment Years. We also hold that, this defect in the assumption of jurisdiction by the Assessing Officer cannot be cured by taking recourse to the deeming fiction u/s 292 BB of the Act. With respect to the argument of the Ld.D.R. that, this contention has not been raised by the assessee, before the A.O. or the Ld.CIT(A), we hold that this is a legal issue and as all the facts are on record, this contention can be raised before us, by the assessee for the first time, as this is a jurisdictional issue. Thus we dismiss this contention of the Ld.D.R. as devoid on merit. - Decided in favour of assessee.
Issues Involved:
1. Whether the Assessing Officer (AO) failed to issue the mandatory notice under section 143(2) of the Income Tax Act, 1961. 2. Whether the AO's assumption of jurisdiction was valid. 3. Whether the defect in issuing the notice could be cured by section 292BB of the Income Tax Act. 4. Whether the assessment orders for the relevant assessment years (AYs) were valid. Issue-wise Detailed Analysis: 1. Mandatory Notice under Section 143(2): The primary issue was whether the AO issued the mandatory notice under section 143(2) of the Income Tax Act, 1961, after the assessee filed its return of income in response to a notice under section 148. The assessee contended that no such notice was issued, rendering the AO's assumption of jurisdiction invalid. The Tribunal noted that the AO's order did not mention the issuance of a notice under section 143(2), and the assessee's inspection of the assessment records confirmed no such notice was issued. The Tribunal concluded that the AO failed to issue the mandatory notice under section 143(2). 2. Validity of AO's Assumption of Jurisdiction: The Tribunal examined whether the AO's assumption of jurisdiction was valid in the absence of a notice under section 143(2). The Tribunal referred to various judicial precedents, including judgments from the Jurisdictional High Court and the Supreme Court, which held that issuing a notice under section 143(2) is mandatory for assuming jurisdiction. The Tribunal cited the case of CIT vs. Adarsh Travel Bus Service, where it was held that the AO must issue a notice under section 143(2) within the prescribed time limit to proceed with the assessment. The Tribunal concluded that the AO's assumption of jurisdiction was invalid due to the failure to issue the mandatory notice. 3. Applicability of Section 292BB: The Tribunal also considered whether the defect in issuing the notice could be cured by section 292BB of the Income Tax Act, which deems a notice to be valid if the assessee has cooperated in the proceedings without raising an objection. The Tribunal referred to the case of CIT-2, Lucknow vs. Salarpur Cold Storage (P) Ltd., where it was held that section 292BB cannot cure the defect of non-issuance of a notice within the prescribed period. The Tribunal concluded that the provisions of section 292BB could not come to the aid of the Revenue in this case. 4. Validity of Assessment Orders: Given the AO's failure to issue the mandatory notice under section 143(2) and the invalid assumption of jurisdiction, the Tribunal held that the assessment orders for the relevant AYs were invalid and quashed them. The Tribunal emphasized that this defect in the assumption of jurisdiction could not be cured by section 292BB and that the issue could be raised at any stage as it was a jurisdictional matter. Conclusion: The Tribunal quashed the assessment orders for AYs 2006-07 to 2011-12, holding that the AO's failure to issue the mandatory notice under section 143(2) rendered the assumption of jurisdiction invalid. The defect could not be cured by section 292BB, and the assessment orders were deemed bad in law. Consequently, all the appeals of the assessee were allowed.
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