2020 (9) TMI 965 - AT - Income Tax

Validity of assessment u/s 147 - no notice u/s 143(2) was issued to the assessee - HELD THAT - The admitted fact is that no notice u/s 143(2) was issued to the assessee for both the assessment years. Only a notice u/s 148 and Section 143(2)(1) was issued. Under these circumstances we have to hold that the assessment orders for both the assessment years are bad in law and have to be quashed by following the judgement of the jurisdictional High Court in the case of Pr. CIT vs. Oberoi Hotels Pvt. Ltd. 2018 (6) TMI 1472 - CALCUTTA HIGH COURT - Decided in favour of assessee.

Summary

Issues:
Non-service of notice u/s 143(2) of the Income Tax Act after filing return in response to notice u/s 148 for Assessment Years 2009-10 & 2010-11.

Analysis:
The appeals were filed by the assessee challenging separate orders of the Commissioner of Income Tax (Appeals) for the Assessment Years 2009-10 & 2010-11, based on the ground that no notice u/s 143(2) of the Act was issued to the assessee after filing the return in response to a notice u/s 148. The Tribunal directed the Departmental Representative to produce the assessment record to verify the claim. The Department confirmed that no notice u/s 143(2) was issued for both years. The assessee relied on various judgments, including a jurisdictional High Court decision, to support the argument that failure to issue the statutory notice u/s 143(2) renders the assessment orders bad in law.

The Department contended that the assessee did not raise the issue before the Assessing Officer or the Commissioner of Income Tax (Appeals) and participated in the assessment proceedings, thus should not be allowed to raise the issue before the Tribunal. The Tribunal considered the arguments and relevant case laws cited by both parties.

The Tribunal observed that no notice u/s 143(2) was issued to the assessee for both years, contrary to the mandatory requirement. Citing the jurisdictional High Court judgment, the Tribunal held that the assessment orders were bad in law and needed to be quashed. The Tribunal emphasized the importance of the notice u/s 143(2) in the assessment process and highlighted that Section 292BB of the Act does not dispense with the mandatory issuance of such notices. Consequently, the Tribunal allowed the appeals of the assessee and quashed the assessment orders for both years.

In conclusion, the Tribunal, in line with the legal principles established by the jurisdictional High Court, upheld the assessee's contention regarding the non-service of notice u/s 143(2) after filing the return in response to the notice u/s 148. The Tribunal deemed the assessment orders for both years as bad in law and quashed them, allowing the appeals filed by the assessee.