2019 (12) TMI 505 - HC - Income Tax

Reopening of assessment - no notice u/s 143 (2) - HELD THAT - Non-issuance of notice under section 143 (2) of the Act is thus seen as a jurisdictional error vitiating the assessment. See M/S. HOTEL BLUE MOON 2010 (2) TMI 1 - SUPREME COURT .

Summary

Issues:
1. Whether the Tribunal erred in holding the assessment as bad in law due to non-compliance with the notice requirements under section 143(2) of the Income Tax Act?
2. Whether the Tribunal erred in considering the assessment as void for not granting a minimum of 15 days for filing a return of income in response to a notice under section 158-BC?

Analysis:

Issue 1:
The respondent, an individual, challenged the assessment order under section 158-BC for the block period between 1.4.1990 to 16.9.2000, claiming that the assessment was completed without issuing a notice under section 143(2) of the Act. The Tribunal concurred with this contention and annulled the assessment. The Revenue argued that a notice was indeed issued, albeit without specifying the provisions under which it was issued. However, the materials on record confirmed that no notice under section 143(2) was actually issued, with the previous notice being for general information collection purposes only. The Tribunal relied on the Supreme Court precedent in the case of Assistant Commissioner of Income Tax, Hotel Blue Moon, emphasizing that the assessing officer must follow the procedure laid down in sections 143(2) and 143(3) to complete the assessment under section 143(3) after the return is filed. Failure to issue a notice under section 143(2) was deemed a jurisdictional error, rendering the assessment invalid.

Issue 2:
The second issue raised by the Revenue regarding the alleged failure to grant a minimum of 15 days for filing a return of income in response to a notice under section 158-BC was deemed academic in light of the jurisdictional error concerning the non-issuance of the section 143(2) notice. The Tribunal's decision to annul the assessment was upheld based on the lack of compliance with the statutory notice requirements, rendering the second issue immaterial. Consequently, the appeal by the Revenue was dismissed, affirming the Tribunal's decision to delete the assessment due to the absence of a valid notice under section 143(2) of the Income Tax Act.