2024 (5) TMI 349 - AT - Income Tax

Validity of reassessment proceedings - non-issue of the statutory notice u/s 143(2) - HELD THAT - We find that the assessee has repeatedly applied for inspection of case records, for obtaining certified copies of order sheets, and for obtaining copies of notice u/s 143(2), if the same at all exists in the files of the assessing officer, and has even paid the requisite fees by way of challan, but the same has not been allowed by the AO. DR, could not confirm whether the statutory notice u/s 143(2) has been issued or not in absence of assessment records in his custody. DR also expressed his inability to produce the same and he has also not brought anything on record contrary to the arguments advanced by the Ld. AR. Thus we hold that the AO has not issued the statutory notice u/s 143(2) in response to return filed u/s 148 of the Act 1961. It is not a case that notice u/s 143(2) has been issued, and not served upon the assessee, but it is a case where the notice u/s 143(2) has never been issued at all, for assumption of jurisdiction, and the non-issue of the statutory notice u/s 143(2) is an incurable defect which cannot be cured, because the basic foundation of the assessment proceedings is bad in law. Decided in favour of assessee.

Summary

Issues Involved:
1. Condonation of delay in filing appeal.
2. Confirmation of addition made by AO on cash deposited in bank account.
3. Jurisdictional notice u/s 143(2) not issued by AO.

Summary:
Issue 1: The appeal was filed 47 days late due to medical problems in the family of the advocate representing the assessee. The delay was unintentional, and after considering the grounds in the condonation application, the delay was condoned, and the appeal was admitted for hearing on merits.

Issue 2: The appeal challenged the addition of Rs. 21,11,480 made by the AO on cash deposited in the bank account. The CIT(A) confirmed the addition without examining the merits of the case and without allowing cross-examination of the bank manager. The appellant also raised issues regarding denial of signatures and lack of investigation by the authorities.

Issue 3: The jurisdictional notice u/s 143(2) was not issued by the AO, which was raised as a legal ground before the Tribunal. The non-issuance of the statutory notice was considered an incurable defect, and the assessment was deemed void ab initio. The Tribunal allowed the appeal based on the jurisdictional issue, without delving into the merits of other grounds.

In conclusion, the Tribunal allowed the appeal based on the non-issuance of the statutory notice u/s 143(2), declaring the assessment void ab initio. The decision was made solely on jurisdictional grounds, without addressing the other issues raised in the appeal.