Notice served u/s.143(2) deemed invalid, Tribunal dismisses Revenue's appeal.

The Appellate Tribunal ITAT Ahmedabad upheld the Commissioner of Income Tax (Appeals)'s decision declaring the assessment as "invalid." The Tribunal ruled that the notice served u/s.143(2) of the Income Tax Act, 1961 was not legally served on the company, resulting in the dismissal of the Revenue's appeal challenging the Commissioner's decision.

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Issues involved:
Appeal against the order of Commissioner of Income Tax (Appeals) declaring the assessment as "invalid" - Validity of notice served u/s.143(2) of the Income Tax Act, 1961.

Analysis:

Issue 1: Appeal against the order of Commissioner of Income Tax (Appeals) declaring the assessment as "invalid"

The appeal by the Revenue was directed against the order of the Commissioner of Income Tax (Appeals)-III for the Assessment Year 2008-09. The Revenue contended that the Commissioner of Income Tax (Appeals) erred in law and on facts by declaring the entire assessment as "invalid." The Revenue argued that the Commissioner of Income Tax (Appeals) exceeded his authority by not following the provisions of section 251 of the Income Tax Act, which allows for confirmation, reduction, enhancement, or annulment of the assessment but does not grant the power to declare the assessment as "invalid."

Issue 2: Validity of notice served u/s.143(2) of the Income Tax Act, 1961

The case involved an assessment of a company engaged in the purchase and sale of shares. The Assessing Officer determined the total income of the company based on various cash transactions during a specific period. The company contested the assessment before the Commissioner of Income Tax (Appeals), who allowed the appeal. The Revenue challenged this decision, arguing that the notice u/s.143(2) was legally served on the company. However, the Tribunal disagreed with the Revenue's contention. The Tribunal referred to legal precedents where the courts held that mere dispatch or issuance of a notice is not sufficient; actual service of the notice is required by law. As the notice u/s.143(2) was not served upon the company legally, the Tribunal dismissed the appeal of the Revenue.

In conclusion, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) regarding the invalidity of the assessment. The Tribunal determined that the notice u/s.143(2) was not legally served on the company, leading to the dismissal of the Revenue's appeal. The judgment was pronounced on 18/10/2016 by the Appellate Tribunal ITAT Ahmedabad.

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