2019 (4) TMI 1296 - AT - Income Tax

Reopening of assessment - non issue of statutory notice u/s 143(2) - HELD THAT - It is the requirement of the judgemental laws that the Assessing Officer is required to issue statutory notice u/s 143(2) of the Act once the assessee filed the return of income in response to notice u/s 148 of the Act. Considering the above cited legal proposition on this issue, 2018 (10) TMI 1167 - ITAT MUMBAI and after hearing both the sides, we are of the opinion the reassessment made by the Assessing Officer is invalid and illegal. Thus, the additional grounds raised by the assessee in the cross objection are allowed. - Decided against revenue.

Summary

Issues:
Validity of reassessment order without issuing statutory notice u/s 143(2) of the Act after filing return of income.

Analysis:
The appeal pertains to the order of CIT(A)-10, Pune for the Assessment Year 2012-13, where the Revenue challenged the order, and the assessee filed a Cross Objection against the appeal. The primary issue revolves around the reassessment proceedings initiated by the Assessing Officer without issuing a notice under section 143(2) of the Income-tax Act, 1961 after the assessee filed the return of income. The assessee contended that the reassessment order was invalid as no statutory notice u/s 143(2) was issued post-filing of the return of income in response to the notice u/s 147/148 of the Act. The crux of the matter was whether the reassessment made without the issuance of a statutory notice u/s 143(2) of the Act after the filing of the return of income was legally sustainable.

The assessee's counsel, deviating from the regular grounds, raised a legal issue through the cross objection regarding the validity of the reassessment order due to the absence of a notice u/s 143(2) of the Act post the filing of the return of income. The counsel argued that such reassessment was illegal and invalid, citing various decisions to support the claim. Reference was made to a Mumbai Tribunal decision where it was held that a reassessment without a notice u/s 143(2) subsequent to the filing of the return of income was invalid, based on judgments of High Courts. The Tribunal emphasized the necessity of issuing a notice u/s 143(2) after the filing of the return of income in response to the notice u/s 148 of the Act.

The Tribunal, after considering the legal precedents and arguments from both sides, concluded that the reassessment made by the Assessing Officer was indeed invalid and illegal due to the failure to issue a statutory notice u/s 143(2) of the Act post the filing of the return of income. Consequently, the additional grounds raised by the assessee in the cross objection were allowed, leading to the dismissal of all grounds raised by the Revenue in its appeal and the grounds raised by the assessee in its cross objection as they became merely academic exercises. Ultimately, the appeal of the Revenue was dismissed, and the cross objection of the assessee was partly allowed, with the order pronounced on the 4th day of April 2019.