9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 234 - AT - Income TaxValidity of reopening of assessment - Non-issuance of notice u/s. 143(2) - mechanical approval granted u/s. 151 - HELD THAT - AO has completed the assessment u/s. 143(3)/147 of the Act on 10.11.2017 without issuing mandatory notice us. 143(2) which is against the law laid down in the case of ACIT vs. Hotel Blue Moon 2010 (2) TMI 1 - SUPREME COURT wherein, it has been held that in the absence of the notice u/s. 143(2) of the Act the assessment framed by the Assessing Officer is liable to be quashed. Pr. CIT has granted the approval in a mechanical manner by putting only Yes which is not valid for initiating the reassessment proceedings. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act. The reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Penalty u/s 271(1)(c) - HELD THAT - Since as already quashed the reassessment and delete the addition in dispute in the quantum appeal, as aforesaid, hence, the penalty, does not stand in the eyes of law, therefore, the same is deleted as such, by also allowing this appeal of the assessee.
Issues Involved:
1. Validity of the assessment order under sections 147/143(3) of the Income Tax Act, 1961. 2. Mechanical approval under section 151 of the Income Tax Act. 3. Non-issuance of mandatory notice under section 143(2) of the Income Tax Act. 4. Validity of penalty proceedings under section 271(1)(c) of the Income Tax Act. Detailed Analysis: 1. Validity of the Assessment Order under Sections 147/143(3): The assessee challenged the assessment order passed under sections 147/143(3) on the grounds that no notice was issued under section 143(2) before completing the assessment proceedings. The Tribunal found that the mandatory notice under section 143(2) was indeed not issued by the Assessing Officer (AO), which is against the law as laid down by the Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon (2010). Consequently, the assessment framed by the AO was quashed. 2. Mechanical Approval under Section 151: The assessee contended that the approval for reopening the assessment under section 151 was granted in a mechanical manner by merely putting "Yes" without proper application of mind. The Tribunal agreed with the assessee, citing the Hon'ble Supreme Court's decision in CIT vs. S. Goyanka Lime & Chemical Ltd. (2015), which held that such mechanical approval invalidates the reopening of the assessment. Thus, the Tribunal quashed the reassessment proceedings on this ground as well. 3. Non-Issuance of Mandatory Notice under Section 143(2): The Tribunal emphasized that the issuance of a notice under section 143(2) is a mandatory requirement for completing the assessment under section 147. The absence of such notice rendered the assessment order invalid, as supported by the Supreme Court's ruling in Hotel Blue Moon. Therefore, the reassessment proceedings were quashed due to this procedural lapse. 4. Validity of Penalty Proceedings under Section 271(1)(c): The penalty order under section 271(1)(c) was also challenged, with the assessee arguing that the penalty was initiated in a routine manner without specifying any charge. The Tribunal noted that since the reassessment itself was quashed, the penalty proceedings based on the invalid assessment order could not stand. Consequently, the penalty of ?1,92,158 was deleted. Conclusion: The Tribunal allowed both the quantum and penalty appeals filed by the assessee. The reassessment proceedings were quashed due to the non-issuance of the mandatory notice under section 143(2) and the mechanical approval under section 151. Consequently, the penalty imposed under section 271(1)(c) was also deleted. The Tribunal's decision was in line with the precedents set by the Hon'ble Supreme Court in relevant cases.
|
