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TMI Blog2016 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's stand that non-issuance of notice to an assessee, as prescribed in the Act, is not only a procedural irregularity and that in absence of the issuance of statutory notice u/s 143(2) of the Act, the assessment order passed by the Assessing Officer is bad in law and void ab initio. The assessee raised this issue before the Ld. CIT (A) also. However, the Ld. CIT (A), while adjudicating the issue, relying upon the judgement of the Hon'ble Delhi High Court in the case of Madhya Bharat Corporation Ltd. 337 ITR 389 (Del), held that the non-issuance of notice u/s 143(2) of the Act did not make the assessment invalid. On merits also, the Ld. CIT (A) dismissed the grounds of appeal of the assessee. Now, the assessee is in appeal before us and has raised as many as 12 grounds of appeal but ground no. 5 being germane to the entire issue at hand is being taken up first. The ground reads as under:- "5. On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in confirming the reopening despite the fact that the same is bad and liable to be quashed having been made without the issue of statutory notice u/s 143(2) of the Act." 3. At the outset, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department did not controvert this claim of the assessee. The Hon'ble Delhi High Court in the case of Pr. CIT-08 vs Shri Jai Shiv Shankar Traders (In I.T.A. No. 519/ 2015 in order dated 14.10.2015) has dealt with the issue at length. The relevant paragraphs are reproduced as under:- "6. The AO then proceeded to pass an assessment order on 31st December, 2010 whereby, inter alia, an addition of Rs. 1 crore was made to the income of the Assessee under Section 68 of the Act as unexplained credits. In the appeal before the Commissioner of Income Tax (Appeals), the Assessee, inter alia, raised the issue that in the absence of a notice under Section 143(2) of the Act the order of re-assessment was invalid. The CIT (A) negatived the above contention holding that no specific notice was required to be issued under Section 143(2) of the Act and that questionnaires dated 11th November, 2003 and 21st January, 2004 issued by the AO had provided the Assessee's sufficient opportunity to support his return by documentary evidence. Secondly, it was held that non issue of notice under Section 143(2) did not render the reassessment invalid. 7. The Assessee's further appeal has been al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return filed pursuant to the notice under Section 148 of the Act. 13. In DIT v. Society for Worldwide Interbank Financial Telecommunications (2010) (Del), this Court invalidated a reassessment proceeding after noting that the notice under Section 143(2) of the Act was not issued to the Assessee pursuant to the filing of the return. In other words, it was held mandatory to serve the notice under Section 143(2) of the Act only after the return filed by the Assessee is actually scrutinised by the AO. 14. The interplay of Sections 143 (2) and 148 of the Act formed the subject matter of at least two decisions of the Allahabad High Court. In CIT v. Rajeev Sharma (2011) 336 ITR 678 (All.) it was held that a plain reading of Section 148 of the Act reveals that within the statutory period specified therein, it shall be incumbent to send a notice under Section 143(2) of the Act. It was observed: "the provisions contained in sub-Section (2) of Section 143 is mandatory and the legislature in their wisdom by using the word 'reason to believe' had cast a duty on the Assessing Officer to apply mind to the material on record and after being satisfied with regard to escaped liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the requirement to issue notice under Section 143(2) was mandatory. It was not "a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with." 17. The Madras High Court held likewise in Sapthagiri Finance & Investments v. ITO (2013) 90 DTR 289 (Mad). The facts of that case were that a notice under Section 148 of the Act was issued to the Assessee seeking to reopen the assessment for AY 2000-01. However, the Assessee did not file a return and therefore a notice was issued to it under Section 142 (1) of the Act. Pursuant thereto, the Assessee appeared before the AO and stated that the original return filed should be treated as a return filed in response to the notice under Section 148 of the Act. The High Court observed that if thereafter, the AO found that there were problems with the return which required explanation by the Assessee then the AO ought to have followed up with a notice under Section 143(2) of the Act. It was observed that: "Merely because the matter was discussed with the Assessee and the signature is affixed it does not mean the rest of the procedure of notice under Section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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