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2019 (11) TMI 749 - AT - Income TaxNon service of notice under section 143(2) - scrutiny assessment - CIT(A) dismissed the appeal on the ground of delay in filing of appeal - HELD THAT - We observe that the undisputed facts are that the notice under section 143(2) was not served on the assessee as is apparent from the reply of the AO in response to the RTI application dated 05.10.2018, we observe from the perusal of the said application that the notice has not been served on the assessee. In our opinion, the non service of notice is factual and serous defects in the framing of the assessment and renders the assessment proceedings as well as the consequent assessment order as null and void. CIT(A) instead of finding the truth chose to dismiss the appeal even without verifying the facts from assessment records. In the present case before us the AO admitted to have not served the notice u/s 143(2) on the assessee and in such a scenario we are left with no option except to quash the assessment order. The case of the assessee is supported by a series of decisions as stated hereinabove. In the case of CIT vs. Abacus Distribution Systems (India) (P.) Ltd. 2017 (2) TMI 582 - BOMBAY HIGH COURT has held that where the notice u/s 143(2) has not been served at the correct address then the assessment proceedings concluded on the basis of invalid notice is void. Similarly, in the case of CIT vs. Laxman Das Khandelwal 2019 (8) TMI 660 - SUPREME COURT has held that no notice u/s 143(2) was ever issued by the Department, therefore, in the light of judgement referred to above the assessment proceedings sans service of notice u/s 143(2) of the Act are invalid and accordingly quashed.
Issues:
Non-service of notice under section 143(2) of the Act and challenge to the jurisdiction of the AO to frame assessment under section 143(3) of the Act. Analysis: The appeal was filed against the order of the Commissioner of Income Tax (Appeals) relevant to the assessment year 2002-03. The primary issue raised was the non-service of notice under section 143(2) of the Act on the assessee and the challenge to the jurisdiction of the Assessing Officer (AO) to frame assessment under section 143(3) of the Act. The notice under section 143(2) was sent to an incorrect address, which the assessee claimed was not the address provided in the return of income. The AO did not make further attempts to send the notice to the correct address and proceeded to frame the assessment under section 143(3) of the Act. The Commissioner of Income Tax (Appeals) dismissed the appeal due to a delay in filing and did not address the issue of non-service of notice. During the proceedings, the AR highlighted that the notice was not served on the correct address, as confirmed by the AO's response to an RTI query. The AR argued that the assessment order should be quashed as the non-service of notice is a fundamental defect. The AR presented evidence showing discrepancies in the address used for sending the notice and emphasized that the assessment order was not served on the appellant. The AR referred to various legal precedents to support the argument that non-service of notice renders assessment proceedings void. The Departmental Representative (DR) contended that the notice was properly issued but sent to a different address than the one mentioned in the income tax return. After considering the arguments from both parties and reviewing the facts, the Tribunal observed that the notice under section 143(2) was not served on the assessee. The Tribunal found the non-service of notice to be a serious defect that rendered the assessment proceedings and the subsequent order null and void. Citing legal precedents, the Tribunal concluded that the assessment proceedings without the service of notice under section 143(2) were invalid and quashed the assessment order. The Tribunal also referenced a recent judgment by the Supreme Court regarding the importance of updating address details in the PAN database for effective communication between the assessee and the assessing officer. As the appeal was allowed based on the non-service of notice issue, the other grounds raised by the assessee were not addressed. Consequently, the appeal of the assessee was partly allowed, and the assessment order was quashed. In conclusion, the Tribunal upheld the argument that the non-service of notice under section 143(2) of the Act was a critical defect that invalidated the assessment proceedings, leading to the quashing of the assessment order. The decision was supported by legal precedents emphasizing the importance of proper service of notices in income tax assessments.
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