2022 (2) TMI 1427 - HC - Income Tax

Validity of reopening of assessment - non issue of notice to the assessee u/s 143 (2) - Tribunal quashed the reassessment order on the ground that it was completed without issuing notice to the assessee u/s 143 (2) - HELD THAT - AO did not issue notice u/s 143 (2) he had issued a letter to the Assessee beyond the time within which the notice should have been issued. This Court is not able to accept that the sending of such letter belatedly constitutes compliance with the mandatory requirement of a notice under Section 143 (2) of the Act. Consequently, this Court is not inclined to entertain the appeal by framing the question urged by the Revenue. The appeal is accordingly dismissed.

Summary

Issues:
Appeal against quashing reassessment order due to lack of notice under Section 143(2) of the Income Tax Act, 1961.

Analysis:
The High Court heard an appeal by the Revenue challenging the quashing of a reassessment order for the assessment year 2008-09. The main question was whether the Tribunal was correct in setting aside the reassessment order due to the absence of a notice to the assessee under Section 143(2) of the Income Tax Act. The Revenue relied on the judgment of the Delhi High Court in a specific case to support its argument. However, the counsel for the assessee referred to a subsequent judgment that clarified the issue, stating that the earlier judgment was no longer applicable in this case.

In response to the Revenue's argument, the counsel for the Revenue cited a Supreme Court case related to a challenge against an assessment order, not a reassessment order, to emphasize the importance of notice under Section 143(2) of the Act. The High Court highlighted a Supreme Court decision in another case, which concluded that the completion of an assessment without issuing a notice under Section 143(2) is fatal to the assessment. This decision supported the assessee's position in the present case.

The Revenue contended that even though the Assessing Officer sent a letter to the assessee beyond the stipulated time for issuing a notice under Section 143(2), it should be considered as compliance. However, the High Court rejected this argument, stating that sending a letter belatedly does not fulfill the mandatory requirement of a notice under the Act. Consequently, the High Court dismissed the appeal by the Revenue, refusing to frame the question urged by them.

In conclusion, the High Court dismissed the appeal, emphasizing the importance of complying with the mandatory requirement of issuing a notice under Section 143(2) of the Income Tax Act. The judgment clarified the implications of failing to provide such notice in the context of reassessment proceedings, ultimately ruling in favor of the assessee in this case.