2019 (2) TMI 2053 - AT - Income Tax

Validity of Reopening of assessment u/s 147 - no notice was issued u/s 143(2) - CIT(A) held that since no valid return of income was filed by assessee under section 148 of the Act, there is no requirement for issuance of notice under section 143(2) - HELD THAT - Assessment was framed by the AO under section 143(3) read with section 147 - Admittedly, if the CIT(A) feels that the assessee has filed no return of income or the return filed by the assessee as null and void in the eyes of the law, the AO should have made assessment under section 144 - In the absence of return of income, no assessment can be framed under section 143(3) of the Act. For framing assessment under section 143(3), the principle requisite condition is issuance of notice under section 143(2) of the Act. Admittedly, the AO failed to issue mandatory notice under section 143(2) of the Act before proceeding to complete the assessment. This issue is covered by the decision of Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT . Thus once no notice under section 143(2) of the Act was issued, it is a mandatory jurisdictional issue and hence, assessee is invalid. We quash the assessment order and allow this appeal of the assessee.

Summary

Issues involved:
Validity of assessment order under section 143(3) read with section 147 despite no notice under section 143(2) issued.

Analysis:

Issue 1: Validity of assessment order without notice under section 143(2)
The appeal concerned the validity of the assessment order by the Commissioner of Income Tax (Appeals) despite no notice under section 143(2) of the Income Tax Act being issued. The appellant contended that the assessment order was invalid due to the absence of the said notice. The CIT(A) held that since no valid return of income was filed by the appellant under section 148 of the Act, the requirement for a notice under section 143(2) did not arise. The CIT(A) referred to previous tribunal decisions to support this stance. However, the Tribunal noted that the absence of a notice under section 143(2) is a mandatory jurisdictional issue. Citing the decision of the Hon'ble Supreme Court in a relevant case, the Tribunal concluded that the failure to issue the mandatory notice rendered the assessment invalid. Consequently, the Tribunal quashed the assessment order and allowed the appeal of the assessee.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the mandatory requirement of issuing a notice under section 143(2) before completing an assessment under section 143(3). The failure to issue such notice rendered the assessment invalid, leading to the quashing of the assessment order.