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2022 (11) TMI 873 - AT - Income TaxValidity of assessment - non-issuance of notice u/s 143(2) - HELD THAT - AO having jurisdiction over the assessee proceeded to commence and complete the assessment proceedings without issuing a fresh notice u/s 143(2) of the Act. Hon ble Supreme Court in the case of ACIT vs. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT has held that the service of the statutory notice u/s 143(2) of the Act is sine-qua-non to initiate/commence the assessment proceedings u/s 143(3) of the Act. Also in the case of Smt. Kene Welly 2021 (4) TMI 715 - ITAT GUWAHATI while dealing with similar issue pertaining to AY 2015-16 and held the assessment invalid and quashed the same. Thus assessment proceedings carried out u/s 143(3) are held to be invalid and bad in law and are hereby quashed. Thus, the legal issue raised in the additional ground by the assessee is allowed.
Issues Involved:
1. Validity of the assessment proceedings due to non-issuance of notice under Section 143(2) by the jurisdictional Assessing Officer. 2. Addition of Rs. 10,89,000 under Section 68 of the Income Tax Act. 3. Denial of exemption claimed on account of Long Term Capital Gains. 4. Addition of Rs. 33,652 under Section 69C alleging commission paid by the assessee. Detailed Analysis: Issue 1: Validity of the Assessment Proceedings The primary issue raised by the assessee was the validity of the assessment proceedings due to the non-issuance of a fresh notice under Section 143(2) by the jurisdictional Assessing Officer (AO). The assessee argued that once the assessment records were transferred to ITO, Ward-1(1), Burdwan, a fresh notice under Section 143(2) should have been issued. The Tribunal examined this contention and referred to the judgment of the Hon'ble High Court of Calcutta in the case of PCIT vs. Nopany & Sons, which held that the issuance of notice under Section 143(2) is a mandatory requirement and non-issuance renders the assessment proceedings null and void. The Tribunal also referred to the Supreme Court's decision in ACIT vs. Hotel Blue Moon, which reiterated that the service of notice under Section 143(2) is sine qua non for initiating assessment proceedings under Section 143(3). Given that no fresh notice was issued by the jurisdictional AO, the Tribunal held the assessment proceedings to be invalid and quashed them. Issue 2: Addition of Rs. 10,89,000 under Section 68 The assessee contended that the addition of Rs. 10,89,000 under Section 68 was erroneous as there was no adverse evidence against the assessee. The Tribunal did not delve into the merits of this issue since the assessment proceedings were already deemed invalid due to the non-issuance of the mandatory notice under Section 143(2). Issue 3: Denial of Exemption on Long Term Capital Gains The assessee argued that the denial of exemption on account of Long Term Capital Gains was based on a misreading of the facts and was opposed to law. However, the Tribunal did not address this issue on merits, as the primary issue of the validity of the assessment proceedings was decided in favor of the assessee. Issue 4: Addition of Rs. 33,652 under Section 69C The assessee challenged the addition of Rs. 33,652 under Section 69C, alleging that it was based on extraneous considerations. Similar to the other grounds, the Tribunal did not examine this issue on merits due to the quashing of the assessment proceedings. Conclusion: The Tribunal allowed the appeal of the assessee, primarily on the ground that the assessment proceedings were invalid due to the non-issuance of a fresh notice under Section 143(2) by the jurisdictional AO. Consequently, the additions made in the assessment order were also quashed, rendering the other grounds on merits academic and infructuous.
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