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2024 (6) TMI 654 - AT - Income TaxValidity of reopening of assessment - defective notice issued u/s 148 - As alleged AO lacked material to form a reasonable belief that income had escaped assessment at the time of issuing the notice u/s 148 - HELD THAT - It is the case of the Department that there was mistake in mentioning the date as 29/03/2017 in the notice issued u/s 148 of the Act therefore by rectifying the said error another notice was issued again on 31st March 2017 replacing the notice that suffered from defect. The said contention of the DR cannot be accepted as even the e-mail sent on 31st March 2017 was having an attachment that of the very same notice dated 29/03/2017 which can be corroborated from the screen shot of the e-mail produced by the assessee along with the synopsis the downloaded attachment of the notice. Department has not produced any such notice issued u/s 148 of the Act dated 31/03/2010 which was claimed to have been issued to the assessee. Thus it can be safely concluded tha t as on the date of issuance of notice u/s 148 dated 29/03/2017 A.O. was not having any information material or evidence in his possession as to form the reason to believe that any income of the assessee for the subject Assessment Year had escaped assessment as the information itself has been received by the A.O. on 30/03/2017 . Thus in our opinion the reassessment proceedings initiated by the A.O. are erroneous. Accordingly the Assessment Order and the order of the Ld. CIT(A) are hereby set aside by deleting the Ground No. 1 of the assessee.
Issues involved:
The legal/technical issue of defective notice issued u/s 148 of the Act. Issue 1: Legal/Technical Issue of Defective Notice The appeal was filed by the Assessee against the order of Ld. CIT(A)/National Faceless Appeal Centre, Delhi for the Assessment Year 2010-11. The Assessee challenged the reassessment order u/s 147, contending that the Assessing Officer (AO) lacked material to form a reasonable belief that income had escaped assessment at the time of issuing the notice u/s 148. The Assessee argued that the AO did not have any information or evidence until after the notice was issued, rendering the reassessment unlawful. The Assessee also raised concerns about the mechanical grant of sanction for the notice u/s 148 without proper compliance with the provisions of section 151 of the Income Tax Act. The Assessee further disputed the additions made by the AO, claiming they were not legally sustainable and lacked proper basis. The CIT(A) upheld the additions, leading to the present appeal. The Assessee contended that the notice u/s 148 issued by the AO on 29/03/2017 was defective as the AO did not have any information or material to form a reason to believe that income had escaped assessment for the relevant year. The Assessee cited various judicial pronouncements to support their argument, emphasizing the necessity of a valid reason to believe for initiating reassessment proceedings. On the other hand, the Departmental Representative argued that any errors in the notice were rectified by a subsequent notice issued within the limitation period, and the Assessee had been given a fair opportunity to present their case during the assessment proceedings. After considering the submissions and examining the notice and reasons for reopening, it was concluded that the AO did not possess the required information or material at the time of issuing the notice u/s 148. The reassessment proceedings were deemed erroneous, leading to the setting aside of the Assessment Order and the CIT(A)'s decision in favor of the Assessee. The Appeal was allowed, and the Order was pronounced in open Court on 13th June, 2024.
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