9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (6) TMI 748 - AT - Income TaxValidity of assessment - absence of notice under section 143(2) - HELD THAT - In the case of CIT vs. Laxman Das Khandelwal 2019 (8) TMI 660 - SUPREME COURT as, inter alia, been held by the Hon'ble Supreme Court that a complete absence of notice under section 143(2) of the Act does not get cured even by section 292BB of the Act; that for section 292BB of the Act to apply, a notice under section 143(2) must have emanated from the Department and it is only infirmities in manner of service of notice that section 292BB of the Act seeks to cur-e and it is not intended to cure complete absence of notice itself. It was held that the law on the point as regards applicability of the requirement of notice under section 143(2) of the Act is quite clear from the decision in ACIT vs. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT wherein it was held that notice under section 143(2) of the Act would be mandatory for the purpose of making assessment under section 143(3) of the Act. The above position has duly been taken into consideration by the ld. CIT(A), as noted hereinabove. The Department has not been able to refute the decisions in ACIT vs. Hotel Blue Moon (supra) and CIT vs. Laxman Das Khandelwal (supra), both rendered by the Hon'ble Supreme Court. No merit in the grievance sought to be raised by the Department, the same is hereby rejected
Issues Involved:
1. Validity of the assessment order due to non-issuance and non-service of notice under section 143(2) of the Income Tax Act. 2. Additional grounds raised by the assessee in the cross-objection regarding the issuance of notice under section 148, and other procedural and substantive issues related to the assessment. Detailed Analysis: 1. Validity of the Assessment Order Due to Non-Issuance and Non-Service of Notice under Section 143(2): The primary issue in this case is whether the assessment order dated 30/12/2016, passed under section 143 read with section 147 of the Income Tax Act, 1961, is valid in the absence of issuance and service of notice under section 143(2). The ld. CIT(A) quashed the assessment order on the grounds that no such notice was issued and served on the assessee, rendering the reassessment null and void. The Department argued that the non-issuance of notice under section 143(2) is a procedural irregularity that does not invalidate the assessment, citing precedents such as 'M/s Areva T & D India Ltd. Vs. ACIT (Chennai)' and 'Jai Prakash Singh'. They contended that the notice under section 142(1) served the purpose of section 143(2), and the irregularity could be cured under section 292BB of the Act. On the other hand, the assessee's counsel maintained that the issuance of notice under section 143(2) is a mandatory statutory requirement, supported by Supreme Court rulings in 'ACIT vs. Hotel Blue Moon' and 'CIT vs. Laxman Das Khandelwal'. The absence of such a notice invalidates the reassessment order. The Tribunal upheld the CIT(A)'s decision, emphasizing that the issuance of notice under section 143(2) is mandatory and not a mere procedural formality. The failure to issue this notice renders the assessment order invalid, and section 292BB cannot cure the complete absence of such a notice. The Tribunal cited the Supreme Court's decisions in 'ACIT vs. Hotel Blue Moon' and 'CIT vs. Laxman Das Khandelwal', affirming that the requirement of notice under section 143(2) is indispensable for a valid assessment under section 143(3). 2. Additional Grounds Raised by the Assessee in the Cross-Objection: The assessee raised several grounds in the cross-objection, including: - The notice under section 148 was issued beyond the prescribed time limit, rendering the subsequent assessment invalid. - The notice under section 148 was issued and served at the wrong address, invalidating the notice and subsequent proceedings. - The affixture of the notice was not done in accordance with legal requirements, making it invalid. - The reasons recorded for reopening the assessment were based on 'reason to suspect' rather than 'reason to believe'. - The Assessing Officer failed to dispose of the assessee's objections to the reasons for reopening before completing the assessment. - The addition of ?2,60,50,000 under section 68 was not justified as the assessee had provided sufficient evidence regarding the identity, creditworthiness, and genuineness of the loan transaction. - The addition of ?81,12,281 related to client code modification was not substantiated with evidence. However, the assessee's counsel filed an application to withdraw the cross-objection as not pressed. Consequently, the Tribunal dismissed the cross-objection as not pressed. Conclusion: The Tribunal dismissed the Department's appeal, upholding the CIT(A)'s decision to quash the reassessment order due to the non-issuance and non-service of notice under section 143(2). The cross-objection filed by the assessee was also dismissed as not pressed. The Tribunal's decision reinforces the mandatory nature of the notice under section 143(2) for a valid assessment under section 143(3), and the inability of section 292BB to cure the complete absence of such a notice.
|
