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Issues: Cross-appeals against CIT(A) order for asst. yr. 2001-02; Admissibility of additional ground challenging jurisdiction under s. 147/148; Validity of notice issued to non-existing firm; Jurisdictional error in issuing notice to individual who already filed return; Quashing assessment order based on invalid notice.
In this case, cross-appeals were filed against the order of the CIT(A) for the assessment year 2001-02. The assessee filed an additional ground challenging the jurisdiction under sections 147/148 of the Income Tax Act, contending that the AO erred in usurping jurisdiction based on a non-existent reason of non-filing of return, as the return was already filed under section 139. The ITAT allowed the admissibility of this ground as it was a legal issue not requiring further investigation of facts. The Tribunal decided to address this legal ground before delving into the merits of the case. The facts revealed that a notice under sections 147/148 was issued to a firm that was no longer in existence, despite the individual assessee having already filed the return for the relevant year. The Tribunal observed that the notice issued to the firm was invalid, as the individual had fulfilled the filing requirements. The Tribunal found that the notice was based on a ground not available to the AO and therefore, the subsequent proceedings were null and void. Citing relevant case law, the Tribunal concluded that the assessment order based on the invalid notice had to be quashed. Consequently, the Tribunal allowed the legal additional ground raised by the assessee and dismissed the appeal on merits as infructuous. Ultimately, the ITAT quashed the assessment order and allowed the appeal of the assessee on legal grounds, while dismissing the Department's appeal. The decision emphasized the importance of jurisdictional correctness in issuing notices and highlighted the necessity to adhere to legal procedures to maintain the validity of assessment orders.
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