2013 (12) TMI 783 - AT - Income Tax

Non issuance of notice u/s 143(2) for reassessment proceedings u/s 147/148 - Held that - the decision of Hon'ble Jurisdictional High Court in the case of Alpine Electronics Asia Pte. Ltd. (2012 (1) TMI 100 - DELHI HIGH COURT) would be applicable. Respectfully following the same, we hold that the assessment completed without issue of notice under Section 143(2) of the Act was invalid. - Decided in favor of assessee.

Summary

Issues:
Validity of assessment order passed u/s 147/143(3) without notice u/s 143(2).

Detailed Analysis:

Issue: Validity of assessment order passed u/s 147/143(3) without notice u/s 143(2).

Analysis:
The appeal challenged the order of the CIT(A) upholding the validity of the assessment order passed under sections 147/143(3) without the issuance of notice under Section 143(2). The assessee contended that the absence of notice under Section 143(2) rendered the assessment invalid, citing precedents from the Hon'ble Jurisdictional High Court. The Assessing Officer admitted the non-service of notice under Section 143(2) in the remand report. The assessee relied on judgments such as Alpine Electronics Asia Pte. Ltd. and Director of Income-tax Vs. V.R. Educational Trust to support their argument. The Revenue, however, argued that notice under Section 142(1) had been issued, providing the assessee with an opportunity to be heard. The dispute revolved around whether notice under Section 143(2) was essential for the validity of the assessment order.

In the case of Ashok Chaddha, the Hon'ble Jurisdictional High Court held that notice under Section 143(2) was not necessary when notice under Section 153A(1)(a) had been given, emphasizing the sufficiency of questionnaires issued to the assessee. However, in V.R. Educational Trust, the Court disagreed with the Revenue's contention that notice under Section 142(1) could substitute notice under Section 143(2), emphasizing the mandatory nature of the latter. The Court referenced the requirement of notice under Section 143(2) in proceedings under Section 147, except in cases specified by the provisos to Section 148. The Court further highlighted the applicability of Section 142 and sub-sections (2) and (3) of Section 143 for block assessment proceedings under Chapter XIV-B.

In the case of Alpine Electronics Asia Pte. Ltd., the Hon'ble Jurisdictional High Court quashed the assessment proceedings due to the delayed issuance of notice under Section 143(2), emphasizing that the assessment completed without such notice was invalid. Following these precedents, the ITAT Delhi held that the assessment order passed without notice under Section 143(2) was invalid, thereby annulling the assessment order. Consequently, other grounds raised by the assessee against additions made by the Assessing Officer were not considered, and the appeal was allowed.

This detailed analysis highlights the significance of notice under Section 143(2) for the validity of assessment orders under sections 147/143(3), as interpreted by the Hon'ble Jurisdictional High Court judgments and applied by the ITAT Delhi in this case.

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