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2017 (8) TMI 249 - HC - Income TaxValidity of assessment - lack of notice under Section 143 (2) - Held that - Factually the Assessee filed a return pursuant to notice issued under Section 148 of the Act, notwithstanding that it may not have filed a return in the first place under Section 139 of the Act for the AY in question. Once a return is filed notice under Section 143 (2) of the Act to the Assessee is mandatory prior to framing an assessment. The question of framing an assessment ex parte without even issuing a notice under Section 143(2) of the Act did not arise. The mandatory nature of that requirement is settled not only by the decision of the Supreme Court in the case of ACIT v. Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) but also by a decision of this court in Commissioner of Income Tax-08 v. Jai Shiv Shankar Traders Pvt. Ltd. (2015 (10) TMI 1765 - DELHI HIGH COURT) For all the aforementioned reasons, the question framed does not arise in the present appeal and is declined to be answered
Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against ITAT order for AY 2003-04 - Effect of lack of notice under Section 143(2) on assessment validity. Analysis: The appeal before the High Court stemmed from an ITAT order concerning the assessment year 2003-04. The primary issue revolved around the validity of the assessment due to the absence of a notice under Section 143(2) of the Income Tax Act. The AO initiated proceedings after issuing a notice under Section 148, prompting the Assessee to file a return. However, the AO disputed the filing of the original return as claimed by the Assessee, leading to an ex parte assessment. The Assessee contended that the assessment was incomplete without adequate opportunity, but did not specifically challenge the absence of Section 143(2) notice. The CIT (A) partially allowed the Assessee's appeal, prompting the Revenue to file an appeal before the ITAT. The Assessee, in turn, filed cross-objections asserting that the assessment was invalid due to the lack of a Section 143(2) notice. The ITAT, relying on precedents, declared the assessment void ab initio due to the absence of the mandatory notice, thereby dismissing the Revenue's appeal and upholding the Assessee's cross-objections. The High Court noted that the Revenue's appeal only contested the ITAT's decision on the Revenue's appeal, not the Assessee's cross-objections, which had already been finalized. The High Court emphasized the mandatory nature of issuing a Section 143(2) notice before framing an assessment, citing legal precedents to support this requirement. The Court rejected the Revenue's attempt to broaden the scope of the appeal to include the Assessee's cross-objections, emphasizing the clear delineation in the ITAT's order. Ultimately, the Court found no substantial question of law arising from the appeal and dismissed it, given the finalized nature of the ITAT's decision on the assessment's validity.
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