2017 (12) TMI 67 - HC - Income Tax

Validity of assessment - notice under Section 143(2) not issued - Held that - So far as the findings with respect to notice under Section 143(2) is concerned, the ITAT has considered the entire record afresh and clearly rendered a finding that on 15.09.2008, the assessment framed in this case, nowhere reflected that notice under Section 143(2) was issued. Para 10 of the impugned order, pointed out with respect to this aspect and having regard to all the factual material in these circumstances compelled the ITAT to follow the reasoning of the Supreme Court in Additional Commissioner of Income Tax Vs. Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA ) . In this case, the impugned order does not call any interference. No substantial question of law

Summary

Issues:
1. Appeal against ITAT findings for AY 2007-08 upholding CIT(A)'s decision.
2. Validity of notice under Section 143(2) and subsequent proceedings.
3. Disallowance of certain expenses and additions made by AO.
4. ITAT's decision based on record and remand report.

Analysis:
1. The Revenue appealed against the ITAT findings for the assessment year 2007-08, which upheld the CIT(A)'s decision. The case involved the assessment of the appellant's income, which was initially processed under Section 143(1) of the Income Tax Act, 1961, and later completed after scrutiny on 11.12.2009.

2. The assessment order highlighted the issuance of notices under Section 143(2) and 142(1) to the assessee. Despite various attempts to secure the assessee's presence and responses, the appellant was not adequately represented during the proceedings. The AO made additions to the total income, including disallowances related to salaries, web designing expenses, share application money, and current liabilities.

3. The assessee appealed to the CIT(A), challenging the disallowances and additions made by the AO. The CIT(A) set aside the additions but rejected the contentions regarding the notice under Section 143(2). Subsequently, the ITAT accepted the assessee's contentions after considering the record and remand report.

4. The Revenue contended that the ITAT erroneously found no issuance of notice under Section 143(2) and argued that the notice was indeed issued at the notified address. However, the Court upheld the ITAT's decision, stating that the findings did not warrant any interference. The Court also noted that the ITAT's consideration of the record and the Supreme Court's ruling in a similar case supported the decision. Consequently, no substantial question of law arose, and the appeals were dismissed.