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2020 (5) TMI 386 - AT - Income TaxValidity of reopening of assessment - no notice u/s 143(2) - HELD THAT - No notice under Section 143(2) was issued before the completion of the assessment. The assessee has filed return of income at NIL in response to notice u/ 148. CIT(A) has rightly relied upon the decision of the Tribunal in case of ITO vs. Sanjay 2020 (3) TMI 1165 - ITAT DELHI and held that the impugned assessment order is defective in law and is annulled. Revenue is protected under the provisions of Section 150 - AO was further directed to reopen the Assessment u/s 147 and thereafter, reframe the assessment order after following the due process of law and after issuing necessary notices to the assessee as per law and after giving to the assessee reasonable opportunity of being heard and considering the evidence laid by the assessee - CIT(A) has given a elaborate findings which does not require any interference - Decided against revenue.
Issues:
- Annulling the assessment order due to the absence of notice under section 143(2) - Disputing the necessity of notice u/s 143(2) in the absence of a filed return - Time limit for issuance of notice u/s 143(2) - Requirement of filing a return for issuance of notice u/s 143(2) - Applicability of Section 150 for revival of assessment - Setting aside the assessment order by CIT(A) - Protective addition sustained by CIT(A) Analysis: 1. Annulment of Assessment Order: The appeals were filed by the Revenue against the order passed by CIT(A)-1, New Delhi for Assessment Year 2009-10. The grounds of appeal primarily focused on the absence of notice under section 143(2) before the completion of assessment. The Revenue contended that the CIT(A) erred in annulling the assessment order based on this ground. 2. Notice u/s 143(2) and Return Filing: The Revenue argued that notice u/s 143(2) is mandatory only when a return has been furnished under section 139 or in response to specific notices. As the assessee had not filed a return, the necessity of issuing notice u/s 143(2) was disputed. The Revenue highlighted the legal requirement of filing a return for the issuance of such notice. 3. Time Limit for Notice u/s 143(2): The Revenue emphasized the time limit for the issuance of notice under section 143(2), stating that it should be served on the assessee before the expiry of six months from the end of the financial year in which the return is furnished. In this case, as no return was filed by the assessee, the Revenue argued against the necessity of such notice. 4. Applicability of Section 150 for Revival of Assessment: The CIT(A) directed the Assessing Officer to reopen the assessment under Section 147 and reframe the assessment order under Section 150. The Revenue contested this decision, citing the provisions of sub-section (2) of section 150, which they believed made the revival of assessment inapplicable in the given circumstances. 5. Setting Aside Assessment Order: The CIT(A) found the assessment order defective in law due to the absence of notice u/s 143(2) and annulled it. The CIT(A) relied on previous tribunal decisions and directed the Assessing Officer to reopen the assessment under Section 147. The CIT(A) provided detailed reasoning for their decision, leading to the dismissal of the Revenue's appeal. 6. Protective Addition: The CIT(A) dismissed the substantial addition but sustained the protective addition. The identical nature of facts, grounds, and findings in both appeals resulted in the dismissal of the appeals filed by the Revenue. In conclusion, the judgment by the Appellate Tribunal focused on procedural compliance, the necessity of notices under specific sections, and the applicability of relevant provisions of the Income Tax Act. The detailed analysis provided by the CIT(A) led to the dismissal of the Revenue's appeals, highlighting the importance of adhering to legal requirements and due process in tax assessments.
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