Assessment order canceled due to invalid notice service under section 143(2), assessee's appeal upheld.

The Tribunal held that the assessment order was invalid due to non-service of the notice under section 143(2) within the prescribed time limit. Consequently, the assessment order was canceled, allowing the assessee's appeal on specific grounds. The Tribunal found that section 292BB did not apply retrospectively to the assessment year in question, thus upholding the assessee's objection to the non-service of the notice. The appeal was allowed, and the assessment order was canceled on March 30, 2012.

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Issues Involved:
1. Legality and validity of the assessment order due to non-service of notice under section 143(2) of the Income-tax Act, 1961.
2. Applicability of section 292BB of the Income-tax Act, 1961.

Detailed Analysis:

1. Legality and Validity of the Assessment Order due to Non-Service of Notice under Section 143(2)
The assessee challenged the assessment order on the grounds that no notice under section 143(2) of the Income-tax Act, 1961, was served within the statutory time limit. The assessee contended that the assessment order is ab initio void due to this non-service. The Commissioner of Income-tax (Appeals) upheld the validity of the assessment order, stating that the notice was issued on August 4, 2009, and was served through a recognized process. The Commissioner argued that the notice was sent to the address on the permanent account number (PAN) card, not the address mentioned in the return of income. The Commissioner held that it was the assessee's fault for not updating the address in the PAN database.

The Tribunal, however, found that the notice was not served on the address provided in the return of income, which is mandatory under section 143(2). The Tribunal cited the Supreme Court decision in Hotel Blue Moon [2010] 321 ITR 362 (SC), which held that the issuance of notice under section 143(2) is mandatory and not a procedural irregularity. The Tribunal concluded that the non-service of the notice within the stipulated time invalidated the assessment proceedings.

2. Applicability of Section 292BB of the Income-tax Act, 1961
The Commissioner of Income-tax (Appeals) argued that section 292BB, which deems notices to be valid if the assessee has appeared or cooperated in the proceedings, applied to the case. However, the Tribunal noted that section 292BB is applicable from April 1, 2008, and does not have retrospective effect. The Tribunal referenced the Special Bench decision in Kuber Tobacco Products P. Ltd. v. Deputy CIT [2009] 310 ITR (AT) 300 (Delhi), which held that section 292BB cannot be applied retrospectively and is applicable only from the assessment year 2008-09 onwards.

The Tribunal concluded that since the assessment year in question was 2007-08, section 292BB did not apply. Therefore, the assessee could validly raise the objection of non-service of the notice under section 143(2) even if he had participated in the assessment proceedings.

Conclusion
The Tribunal held that the assessment order passed by the Assessing Officer under section 143(3)(ii) was invalid due to the non-service of the notice under section 143(2) within the prescribed time limit. Consequently, the Tribunal canceled the assessment order, allowing the assessee's appeal on grounds Nos. 2, 3, and 4. The other grounds on merits were not addressed as the assessment order itself was canceled.

Result
The assessee's appeal was allowed, and the assessment order was canceled. The order was pronounced in the open court on March 30, 2012.

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