2022 (1) TMI 1088 - AT - Income Tax

Validity of assessment - absence of issuance of notice u/s. 143(2) within period of limitation - whether curable defect u/s 292BB - HELD THAT - The jurisdiction by the Ld.AO is founded on issuance of notice u/s. 143(2). The notice u/s. 143(2) is a mandatory notice and is to be issued within the period prescribed under law. For year under consideration, limitation period expires within six months from the end of the Financial Year in which the return of income has been filed. In the present facts, the limitation period expired on 30.09.2013. Section 292BB of the Act contemplates situations of irregularities wherein the notice has been served to the assessee in time and in accordance with the provisions of this Act. The present case assessee has not received the notice u/s. 143(2) in time and therefore the argument raised by revenue cannot be appreciated. In case of Hotel Blue Moon reported in (2010) 321 ITR 362 2010 (2) TMI 1 - SUPREME COURT wherein Hon ble Supreme Court held that an omission on part of the Assessing Officer u/s. 143(2) cannot be procedural irregularity and the same is not curable. As the notice was not issued within the period of limitation, the empathetic statement of law in the absence of issuance of notice u/s. 143(2) within the period of limitation by the revenue would therefore inure to the benefit of the assessee. Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon ble Supreme Court in various judgments. Accordingly, we hold the assessment order passed by the Ld.AO to be bad in law and the same is quashed.- Decided in favour of assessee.

Summary

Issues:
Challenging the validity of the assessment order due to the delay in issuing notice u/s. 143(2) beyond the prescribed period.

Detailed Analysis:

Issue 1: Validity of Assessment Order
The appeal was filed against the assessment order passed by Ld.CIT(A)-11 for Assessment Year 2012-13. The legal issue raised by the assessee challenged the assessment order's validity due to the notice u/s. 143(2) being issued beyond the stipulated period of six months. The additional grounds were sought to be admitted based on the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. vs. CIT. The assessee argued that the delay in issuing the notice rendered the assessment order void ab initio. The Tribunal, following the Supreme Court's decision, admitted the additional grounds raised by the assessee.

Issue 2: Facts of the Case
The assessee, a partnership firm in the real estate business, filed its return of income for the relevant year on 31.07.2012. A search operation under section 132 was conducted in the case of Shri Dayananda Pai, including the assessee's office premises. The notice u/s. 143(2) was issued to the assessee on 17.10.2013, beyond the due date. The Ld.AR contended that this delay in issuing the notice invalidated the subsequent assessment order.

Issue 3: Adjudication of Legal Issue
The Tribunal considered the dates relevant to the legal issue raised by the assessee. It noted the importance of the notice u/s. 143(2) as a mandatory requirement for the assessment proceedings. The limitation period for issuing the notice expired on 30.09.2013, whereas the notice was issued on 17.10.2013. The Tribunal referred to Section 292BB of the Act and emphasized that the notice must be served within the prescribed time limit for jurisdiction to be valid. Relying on the Supreme Court's judgment in ACIT & anr. Vs. Hotel Blue Moon, the Tribunal held that the failure to issue the notice within the limitation period invalidated the assessment order.

Conclusion:
The Tribunal found the assessment order passed by the Ld.AO to be bad in law due to the delay in issuing the notice u/s. 143(2) and subsequently quashed the order. As a result, the legal issues raised by the assessee were allowed, rendering the appeal successful. The Tribunal's decision was based on the fundamental requirement of issuing the notice within the prescribed time limit for maintaining the jurisdiction in assessment proceedings.