2014 (9) TMI 1149 - AT - Income Tax

Validity of assessment - notice u/s 143(2) not been served on the assessee within the specified time - revenue submitted for hand delivery of notice - Held that - A perusal of the tear of acknowledgment slip which was shown at page 23 of the paper book shows that there is no signature to identify as to who has served the said notice. The Revenue has also not been able to place before us any record or register to prove the hand delivery of the said notice. Admittedly when a notice under section 143(2) is prepared, there is the original and the carbon copy. The original is sent to the assessee. The assessee has placed before us the copy of the original 143(2) notice served on the assessee through the Postal Authorities through Speed Post. If this notice has been served through the Speed Post , where is the second copy which could have been served through the tear of acknowledgment , because there is only one original and one copy which is in the assessment records. This clearly shows that no notice under section 143(2) has been served on the assessee on 30.09.2009 through the tear of acknowledgment slip. Even on merits, it is not iced that the Assessing Officer has blindly disallowed the figures from the Balance sheet and the Prof it & Loss Account without giving any specified reason. The assessee has specifically vide a letter dated 16.12.2010 served on 22.12.2010 intimated that the notice under section 143(2) had been served beyond the prescribed time. Still the Assessing Officer had proceeded with the assessment fully knowing that the assessment would get quashed. As no reasons have been given by the Assessing Officer for disallowing the various figures in the Balance-sheet and the expenses claimed in the Profit & Loss A/c - Decided in favour of assessee

Summary

Issues:
Appeal against order of ld. Commissioner of Income Tax (Appeals) for assessment year 2008-09. Grounds raised include validity of notice u/s. 143(2), ex-parte assessment, and confirmation of additions and disallowances.

Validity of Notice u/s. 143(2):
Assessee challenged notice served beyond time limit. Assessee filed return on 30.09.2008, notice served on 03.10.2009. Assessee argued notice invalid as per CBDT Circular No. 621 and legal precedents. Tribunal found no proof of hand delivery of notice, only served through Speed Post. Relying on legal decisions, Tribunal held notice invalid, quashed assessment order.

Ex-parte Assessment and Additions:
Assessee contested ex-parte assessment and additions. Assessing Officer made additions without proper verification. Tribunal noted lack of reasons for disallowances. Assessee notified delay in notice service, yet assessment proceeded. Tribunal deemed additions unsustainable, deleted them. Tribunal allowed assessee's appeal, pronounced order on 12th September, 2014.