Completing Assessment Without Issuing Sec. 143(2) Notice to Assessee is an Incurable Defect | ITAT

Case Details: Ashish Sharma v. ITO - [2024] 162 taxmann.com 517 (Amritsar-Trib.)

Judiciary and Counsel Details

• Dr. M.L. Meena, Accountant Member & Udayan Das Gupta, Judicial Member
• Rohit Kapoor, CA. & V.S. Aggarwal, ITP for the Appellant.
• Davinder Pal Singh, Sr. DR for the Respondent.

Facts of the Case

In the instant case, cash had been deposited in the bank account opened in the assessee’s name on various dates throughout the financial year 2009-10. However, no return of income had been filed by the assessee under section 139(1) in normal course.

Assessing Officer (AO) reopened assessment proceedings vide issue of a notice under section 148. In response to notice under section 148, the assessee submitted his return disclosing total income from salary and insurance commission. He finally completed the assessment on a total income of certain amount.

The assessee filed an instant appeal contending that assessment framed under section 147 was bad in law as the Assessing Officer did not issue the jurisdictional notice under section 143(2).

ITAT Held

The Tribunal held that it is found that the assessee repeatedly applied for inspection of case records for obtaining certified copies of order sheets and for obtaining copies of notice under section 143(2), if the same at all exists in the files of AO, and had even paid the requisite fees by way of challan, but the same wasn’t been allowed by the AO.

The department could not confirm whether the statutory notice under section 143(2) had been issued or not in the absence of assessment records in his custody. He also expressed his inability to produce the same, and he had not brought anything on record contrary to the arguments advanced by the assessee.

Under such circumstances, it was held that the AO had not issued the statutory notice under section 143(2) in response to the return filed under section 148. It was not a case where notice under section 143(2) had been issued and not served upon the assessee, but it was a case where the notice under section 143(2) had never been issued at all for the assumption of jurisdiction. The non-issue of the statutory notice under section 143(2) is an incurable defect that cannot be cured because the basic foundation of the assessment proceedings is bad in law.

Thus, assessee’s appeal was allowed.

List of Cases Referred to

• CIT v. Laxman Das Khandelwal [2019] 108 taxmann.com 183/417 ITR 325/266 Taxman 171 (SC) (para 9.1),
• Asstt. CIT v. Hotel Blue Moon [2010] 229 CTR 219/321 ITR 362/188 Taxman 113 (SC) (para 9.1),
• ACIT v. Hotel Blue Moon Civil Appeal No. 1198 of 2010 (Arising out of SLP(C) (para 9.1)
• Punnu Synthetics Private Limited v. ITO ITA No. 35/Asr/2023 (para 9.1).