2016 (8) TMI 1190 - AT - Income Tax

Assessment Orders Quashed for Lack of Notice (2)

Anil Kumar Versus Income-Tax Officer (and Vice Versa)

Anil Kumar Versus Income-Tax Officer (and Vice Versa) - [2017] 55 ITR (Trib) 97 Issues Involved:1. Validity of the assessment orders due to non-service of notice under section 143(2).2. Whether the returns filed by the assessee were valid or non est (invalid).Issue-wise Detailed Analysis:1. Validity of the Assessment Orders Due to Non-Service of Notice Under Section 143(2):The primary contention raised by the assessee was that the notice under section 143(2) was not served, rendering the assessment orders illegal and void ab initio. The Departmental Representative (DR) admitted that the assessment records did not contain evidence of service of notice under section 143(2). However, the DR argued that such notices were not required because the returns were filed under section 148 just before the assessments were time-barred. The DR further contended that the assessee deliberately delayed filing the returns to thwart the assessment process.The Tribunal noted that the service of notice under section 143(2) is a necessary requirement for assuming jurisdiction for passing an order under section 143(3), as upheld in several judicial pronouncements, including the Supreme Court's decision in Asst. CIT v. Hotel Blue Moon and the Allahabad High Court's decision in CIT v. Salarpur Cold Storage P. Ltd. Failure to issue such notice cannot be cured by section 292BB. The Tribunal concluded that the Assessing Officer (AO) could have served the notice on the assessee's counsel on December 29, 2008, thereby complying with the mandatory requirement. The Tribunal decided the additional ground in favor of the assessee, quashing the assessment orders.2. Whether the Returns Filed by the Assessee Were Valid or Non Est (Invalid):The DR argued that the returns filed by the assessee were non est and invalid because they were filed much beyond the time allowed under section 148. The DR pointed out that the assessee sought multiple extensions and eventually filed the returns just two days before the assessments were time-barred, suggesting a deliberate delay.The Tribunal examined the provisions of section 148 and section 139(9) of the Income-tax Act, 1961. It noted that the AO did not find any defect in the returns filed by the assessee and did not treat them as invalid under section 139(9). The AO took cognizance of the returns and conducted assessment proceedings based on them. The Tribunal rejected the DR's argument, stating that the returns could not be treated as invalid.Conclusion:The Tribunal quashed the assessment orders due to the non-service of notice under section 143(2), a mandatory requirement for assuming jurisdiction. Consequently, all other grounds raised by the assessee and the Revenue became infructuous. The appeals filed by the assessee were allowed concerning the additional ground, and the appeals filed by the Revenue were dismissed.Order Pronounced:The order was pronounced in the open court on August 1, 2016.