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2018 (11) TMI 1236 - AT - Income TaxValidity of reopening of assessment - no notice u/s 143(2) was issued and served on the assessee - Held that - The assessee had not replied to the notice u/s 148. In these facts and circumstances it is incumbent on the part of the AO to issue separate notice u/s 143(2) of the Act by treating the letter dated 14.11.2014 containing the income details of the assessee as return filed in response to notice u/s 148 of the Act. It is not in dispute that the notice u/s 143(2) was never issued and served on the assessee after the issuance of notice u/s 148 of the Act. We find that in the case of PCIT vs Oberoi Hotels Pvt Ltd 2018 (6) TMI 1472 - CALCUTTA HIGH COURT by placing reliance on the decision of CIT vs Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) had held that issuance and service of notice u/s 143(2) within the prescribed time is mandatory in nature and noncompliance of the same cannot be cured even u/s 292BB. Hence respectfully following the said decision and in view of the undisputed fact that no notice u/s 143(2) of the Act was issued and served on the assessee we find no infirmity in the order of the ld CITA cancelling the re-assessment order as unsustainable in law. - Decided against revenue.
Issues Involved:
1. Validity of re-assessment framed by the ld AO without issuing notice u/s 143(2) of the Act. Analysis: 1. Validity of Re-assessment: The appeal before the Appellate Tribunal arose from the order of the Learned Commissioner of Income Tax (Appeals) concerning the re-assessment framed by the ld AO under section 147/143(3) of the Income Tax Act, 1961 for the Assessment Year 2011-12. The main issue in this appeal was whether the re-assessment was justified in the case of the assessee. The assessee had received a notice u/s 148 of the Act based on cash deposits in a bank account, which the assessee denied ownership of. The ld AO added the cash deposits to the assessee's income from undisclosed sources. The assessee objected that no notice u/s 143(2) was issued before completing the re-assessment proceedings, despite submitting a reply to the notice u/s 148. The ld CITA found that no notice u/s 143(2) was issued after the notice u/s 148, leading to the cancellation of the re-assessment as bad in law. 2. Notice Issuance Requirement: The ld AO contended that as no return of income was submitted in response to the notices u/s 148 and 142(1), there was no need for a notice u/s 143(2). However, the Appellate Tribunal observed that the assessee's letter dated 14.11.2014, responding to the notice u/s 148, should be considered as a Nil return as per law. The Tribunal emphasized that the assessee had effectively replied to the notice u/s 148, and the ld AO proceeded with re-assessment based on the reasons furnished. Citing a recent High Court judgment, the Tribunal held that the issuance and service of notice u/s 143(2) within the prescribed time is mandatory and non-compliance cannot be cured. Since no such notice was issued to the assessee, the re-assessment was deemed unsustainable in law, leading to the dismissal of the revenue's appeal. In conclusion, the Appellate Tribunal upheld the cancellation of the re-assessment order due to the absence of a notice u/s 143(2) after the notice u/s 148, as mandated by law. The Tribunal's decision was based on legal precedents and the specific circumstances of the case, resulting in the dismissal of the revenue's appeal.
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