2024 (9) TMI 1307 - AT - Income Tax

Validity of assessment order passed without issue of notice u/s 143(2) - HELD THAT - As perused the assessment order and we do not find any mention of the issue of notice u/s 143(2) - It is also proved that if the fact of issue of notice under Section u/s 143(2) is not mentioned in the assessment order it cannot be said that no notices has been issued u/s 143(2) of the Act. Therefore, as this was also the argument of the learned Departmental Representative, we granted time for 7 day to submit whether any such notice is issued or not. However till to date no such communication is received. Thus, we do not have any option but to hold that notices u/s 143 (2) of the Act is not issued. Still, later on if it is found that such notices were issued in time, necessary application of recall of this order , may be made in time. Thus, if no notice u/s 143(2) of the Act is issued in reassessment proceedings, the reassessment order cannot be sustained. Appeal filed by the assessee is allowed.

Summary

Issues:
1. Validity of reopening the case under Section 147 by the Assessing Officer.
2. Justification of making an addition to the income.
3. Issuance of statutory notice under Section 143(2) of the Income-tax Act during reassessment.

Analysis:

Issue 1: Validity of Reopening the Case
The appeal was filed against the appellate order passed by the National Faceless Appeal Centre, Delhi, where the assessee challenged the assessment order dated 20th December, 2016, passed under Section 143 read with Section 147 of the Income-tax Act. The assessee contended that the Assessing Officer was not justified in reopening the case under Section 147 by issuing a notice under Section 148. The Tribunal noted that the reasons for reopening were based on information received that the assessee had obtained bogus bills through hawala traders. The Tribunal found that the reopening was valid based on the information provided.

Issue 2: Justification of Income Addition
The Assessing Officer had made an addition of &8377;3,09,11,602 to the total income of the assessee, representing 11.83% of the alleged bogus bills amount. The assessee challenged this addition, arguing that it was unjustified. The Tribunal upheld the addition, stating that the assessee failed to provide sufficient evidence to refute the allegation of obtaining bogus bills.

Issue 3: Statutory Notice under Section 143(2)
The assessee raised an additional ground challenging the reassessment without the issuance of a statutory notice under Section 143(2) of the Act. The Tribunal admitted this ground as it was jurisdictional in nature and crucial to the assessment proceedings. The Tribunal observed that no mention of the notice under Section 143(2) was found in the assessment order. Despite granting time for submission of evidence by the Departmental Representative, no communication was received regarding the issuance of such notice. Consequently, the Tribunal held that the reassessment order could not be sustained without the issuance of the statutory notice under Section 143(2).

In conclusion, the Tribunal allowed the additional ground raised by the assessee regarding the absence of the statutory notice under Section 143(2) during reassessment. As a result, the reassessment order was deemed invalid, and the appeal filed by the assessee was allowed.