2023 (6) TMI 481 - AT - Income Tax

Reopening of assessement u/s 147 - whether or not any notice u/s. 143(2) of the Act was issued by the A.O prior to framing of the assessment? - HELD THAT - Framing of the assessment dehors issuance of a notice u/s. 143(2) of the Act is required to be verified and cannot be summarily accepted on the very face of it; coupled with the fact that though the assessee had vide his submission specifically assailed the jurisdiction assumed by the A.O for framing the impugned assessment without issuing any notice u/s. 143(2) before the CIT(Appeals), which, however, was not adjudicated by him, we are of the considered view that the matter in all fairness requires to be restored to the file of the CIT(Appeals) who shall re-adjudicate the same. In case the contention of the AR that the A.O had framed the assessment u/s. 143(3) r.w.s. 147 dated 26.12.2016 without issuing of notice u/s. 143(2)is found to be in order, then the assessment order therein passed shall stand quashed. Ground of appeal is allowed for statistical purposes.

Summary

Issues Involved:
1. Ignoring submissions by the appellant.
2. Denial of deduction under Section 54B.
3. Addition of Rs. 49,51,437 without mandatory notice under Section 143(2).
4. Validity of reassessment without providing reasons for reopening.

Summary:

1. Ignoring Submissions by the Appellant:
The assessee contested that the CIT(A) erred in ignoring the submissions made via letter dated 26.12.2019 and dismissed the appeal without considering the appellant's submissions. The action of CIT(A) was deemed arbitrary, unlawful, and unjustified.

2. Denial of Deduction under Section 54B:
The assessee claimed a deduction under Section 54B of the Income-tax Act, 1961, for the purchase of new agricultural lands amounting to Rs. 62.46 lacs. However, the A.O. denied this deduction except for the land purchased in the assessee's name at Village Alekhunta on 28.09.2012. The A.O. noted that other investments did not qualify for deduction as they were either purchased in the names of others or outside the stipulated period.

3. Addition of Rs. 49,51,437 without Mandatory Notice under Section 143(2):
The assessee argued that the assessment order was void ab-initio as it was passed without issuing a mandatory notice under Section 143(2). The Tribunal observed that the issuance of notice under Section 143(2) is foundational for a valid assessment under Section 143(3). The A.O. failed to provide specific evidence of issuing such notice. Consequently, the Tribunal directed the CIT(A) to re-adjudicate this issue, verifying whether the notice under Section 143(2) was issued. If it was found that no such notice was issued, the assessment order would be quashed.

4. Validity of Reassessment without Providing Reasons for Reopening:
The assessee raised an additional ground that the reassessment was completed without providing the reasons recorded for reopening the case, rendering the reassessment order unsustainable. The Tribunal did not specifically address this issue separately but implied that it would be considered in the re-adjudication process.

Conclusion:
The Tribunal set aside the matter to the CIT(A) for fresh adjudication, specifically to verify the issuance of notice under Section 143(2). The appeal was allowed for statistical purposes, and other grounds were left open for consideration during the re-adjudication process.