2017 (7) TMI 1449 - AT - Income Tax

Validity of re-opening of assessment - non-issue of notice u/s 143(3) - HELD THAT - Notice u/s 143(2) of the Act is mandatory and in absence of such service, AO cannot proceed to make an inquiry on return filed in compliance with the notice issued u/s 148 - See ACIT vs. Geno Pharmaceuticals Ltd. 2013 (10) TMI 218 - BOMBAY HIGH COURT In the present case admittedly no notice u/s 143(2) was issued in the present case despite the fact that the assessee filed a letter in response to notice u/s 148 of the Act that the return originally filed u/s 139(1) can be treated as return filed u/s 148 - Decided against revenue.

Summary

Issues:
1. Delay in filing the appeal by the assessee.
2. Non-issuance of notice under section 143(2) of the Income Tax Act by the Assessing Officer (AO).

Analysis:
1. The delay in filing the appeal by the assessee was condoned by the Appellate Tribunal due to reasonable reasons provided in the affidavit. The appeal was admitted despite being barred by limitations.

2. The legal issue raised by the assessee was regarding the non-issuance of notice under section 143(2) of the Income Tax Act by the Assessing Officer. The assessee contended that the absence of such notice rendered the assessment bad in law. The CIT(A) confirmed the action of the AO, but the assessee appealed further.

3. The assessee argued that the notice under section 143(2) was not issued despite filing a letter in response to the notice under section 148, requesting the original return to be treated as filed under section 148. Citing relevant legal provisions, the Tribunal noted that the absence of the mandatory notice under section 143(2) was a crucial procedural lapse.

4. Referring to the judgment of the Hon'ble Bombay High Court in a similar case, the Tribunal emphasized the mandatory nature of the notice under section 143(2). It held that without such service, the Assessing Officer cannot proceed with an inquiry based on the return filed in response to the notice under section 148.

5. Following the legal precedent and recognizing the importance of procedural compliance, the Tribunal quashed the assessment framed in the absence of the mandatory notice under section 143(2) of the Act. Consequently, the appeal of the assessee on this jurisdictional issue was allowed, leading to the dismissal of the Revenue's appeal.

6. The Tribunal's decision on the jurisdictional issue resulted in the allowance of the assessee's appeal and the dismissal of the Revenue's appeal. The assessment was quashed due to the absence of the requisite notice under section 143(2) of the Income Tax Act.

This comprehensive analysis highlights the procedural and legal intricacies involved in the judgment delivered by the Appellate Tribunal ITAT Mumbai regarding the issues of delay in filing the appeal and the non-issuance of a notice under section 143(2) of the Income Tax Act.