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2021 (4) TMI 1020 - AT - Income TaxValidity of assessment order u/s 144 without issuing notice u/s 143(2) - HELD THAT - As relying on OBEROI HOTELS PVT. LTD. 2018 (6) TMI 1472 - CALCUTTA HIGH COURT , M/S. HOTEL BLUE MOON 2010 (2) TMI 1 - SUPREME COURT and LAXMAN DAS KHANDELWAL 2019 (8) TMI 660 - SUPREME COURT the passing of assessment order u/s 144 of the Act, without issuing notice u/s 143(2) of the Act, by the Assessing Officer having jurisdiction over this assessee, is bad in law and has to be quashed.
Issues Involved:
1. Jurisdiction of the Assessing Officer to issue notice under Section 143(2) of the Income Tax Act, 1961. 2. Validity of the ex-parte order passed by the Commissioner of Income Tax (Appeals) without disposing of the case on merits. 3. Addition of share capital and share premium money received by the assessee under Section 68 of the Income Tax Act, 1961. Detailed Analysis: 1. Jurisdiction of the Assessing Officer to Issue Notice Under Section 143(2): - The assessee challenged the jurisdiction of the Income Tax Officer (ITO), Ward-6(1), Kolkata, to issue notice under Section 143(2) of the Income Tax Act, 1961. The assessee argued that the correct jurisdiction lay with ITO, Ward-7(1), Kolkata, as per the CBDT notification. - The Tribunal observed that the address of the assessee had been updated to "8, AJC Bose Road, Kolkata - 700017" since 2010, and this was the address used for filing the return for the Assessment Year 2012-13. - The Tribunal noted that the geographical jurisdiction for the assessee, as per the CBDT notification, was under ITO, Ward-7(1), Kolkata, and not ITO, Ward-6(1), Kolkata. - The Tribunal held that the notice issued by ITO, Ward-6(1), Kolkata, was void ab initio as it was issued by an officer who did not have jurisdiction over the assessee. - The Tribunal cited several judgments, including the Hon’ble Supreme Court's decision in ACIT vs. Hotel Blue Moon, which emphasized that the issuance of notice under Section 143(2) by the jurisdictional officer is mandatory. - The Tribunal concluded that the assessment order passed under Section 144 without issuing a valid notice under Section 143(2) by the jurisdictional officer was bad in law and had to be quashed. 2. Validity of the Ex-Parte Order Passed by the Commissioner of Income Tax (Appeals): - The assessee contended that the ex-parte order passed by the Commissioner of Income Tax (Appeals) was invalid as it was passed without giving the assessee a proper opportunity to be heard. - The Tribunal noted that the Commissioner of Income Tax (Appeals) dismissed the case for non-prosecution without disposing of the case on merits, which is not permissible in law. - The Tribunal emphasized the importance of adhering to the principles of natural justice and providing the assessee with a fair opportunity to present their case. - The Tribunal decided that the issue should be restored to the file of the Assessing Officer for fresh adjudication in accordance with the principles of natural justice. 3. Addition of Share Capital and Share Premium Money Under Section 68: - The assessee challenged the addition of ?5,02,60,000/- made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, on the grounds that the share capital and share premium money received during the year were from genuine share applicants. - The assessee argued that all share applicants were assessed to income tax, and the entire share application money was received through proper banking channels. - The Tribunal noted that the Assessing Officer did not conduct a thorough inquiry or investigation into the share applicants' details and relied on various judicial pronouncements without considering the specific facts of the case. - The Tribunal decided that the issue required a detailed examination and verification of the documents filed by the assessee and should be restored to the file of the Assessing Officer for fresh adjudication. Conclusion: The Tribunal allowed the appeal of the assessee, quashing the assessment order passed under Section 144 due to the invalid issuance of notice under Section 143(2) by a non-jurisdictional officer. The Tribunal also directed the Assessing Officer to re-adjudicate the issues related to the addition of share capital and share premium money after providing the assessee with a fair opportunity to present their case.
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