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2017 (7) TMI 418 - AT - Income TaxValidity of reopening of assessment - no issuance of notice u/s.143(2) - whether non issue of such notice was cured by Sec. 292BB? - Held that - There can be no quarrel that issue of notice u/s.143(2) of the Act is mandatory even in a re-assessment proceedings. Sec. 292BB of the Act can cure a case of non service of notice and not a non-issue of notice. In the case before us as already mentioned by us there was no issue of notice u/s.143(2) of the Act. Thus we are of the opinion that non issue of notice u/s.143(2) of the Act invalidates the jurisdiction to make the assessment. We therefore quash the assessment done - Decided in favour of assessee.
Issues Involved:
1. Condonation of Delay in Filing the Appeal. 2. Jurisdiction of the Assessing Officer to Pass the Assessment Order Without Issuing Notice Under Section 143(2) of the Income Tax Act, 1961. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was filed with a delay of 268 days. The assessee attributed the delay to the negligence of an articled clerk in the office of Shri. V. Ramnath, Chartered Accountant, who failed to file the appeal. The delay was discovered only upon receiving a notice for the levy of penalty under Section 271(1)(c) of the Income Tax Act. The Departmental Representative opposed the condonation petition, arguing that there was no evidence to support the claim of failure in the Chartered Accountant's office. However, the Tribunal found the affidavit of Shri. V. Ramnath credible and decided to condone the delay, admitting the appeal. 2. Jurisdiction of the Assessing Officer to Pass the Assessment Order Without Issuing Notice Under Section 143(2): The primary contention of the assessee was that the Assessing Officer did not issue a notice under Section 143(2) of the Act, which is mandatory even in reassessment proceedings under Section 147. The assessee argued that compliance with Section 143(2) is not a mere procedural formality but a jurisdictional requirement, citing judgments from various High Courts and the Supreme Court, including ACIT vs. Blue Moon and Sapthagiri Finance & Investments vs. ITO. The Departmental Representative contended that the assessment was completed based on the return filed by the assessee in response to a notice under Section 148, and that the assessee's participation in the proceedings cured any defect in the notice under Section 143(2) as per Section 292BB of the Act. Upon reviewing the records, the Tribunal found no evidence of the issuance of a notice under Section 143(2). The Tribunal referred to the judgment in Sapthagiri Finance & Investments, which held that the issuance of notice under Section 143(2) is mandatory for reassessment proceedings. The Tribunal also cited the Delhi High Court's judgment in Shri Jai Shiv Shankar Traders Pvt. Ltd., which clarified that Section 292BB could cure defects in the service of notice but not the non-issuance of notice. The Tribunal addressed the Departmental Representative's reliance on the Delhi High Court's judgment in CIT vs. Madhya Bharat Energy Corporation Ltd., noting that the judgment was reviewed and did not hold that the non-issuance of notice under Section 143(2) was not fatal to reassessment. Concluding that the non-issuance of notice under Section 143(2) invalidated the jurisdiction to make the assessment, the Tribunal quashed the assessment order for the impugned assessment year. Conclusion: The appeal was allowed, and the assessment order was quashed due to the non-issuance of the mandatory notice under Section 143(2) of the Income Tax Act, 1961.
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