Invalid Assessment Order Annulled for Failure to Issue Mandatory Notice

The tribunal upheld the CIT (A)'s decision to annul the assessment order for the assessment year 1999-2000 due to the non-issuance of the mandatory notice under section 143(2). The absence of this notice rendered the assessment order invalid, as emphasized by legal precedents highlighting the mandatory nature of the notice requirement for a valid assessment. Both the department's appeal and the assessee's cross objection were dismissed, affirming the CIT (A)'s decision.

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Issues:
Validity of proceedings u/s 147 for non-service of notice u/s 148, Validity of assessment order u/s 143(3) read with section 147 due to non-issuance of notice u/s 143(2).

Analysis:
The appeal and cross-objection were directed against the order passed by the CIT (A) concerning the assessment year 1999-2000. The Assessing Officer initiated action u/s 147 by issuing a notice u/s 148 due to non-filing of the return within the prescribed due date. The CIT (A) upheld the reopening of the assessment but annulled the assessment order u/s 143(3) read with section 147 due to the non-issuance of notice u/s 143(2). The CIT (A) held that the absence of notice u/s 143(2) rendered the assessment invalid, citing legal precedents emphasizing the mandatory nature of the notice requirement for a valid assessment.

During the appeal hearing, the department contended that the absence of notice u/s 143(2) was not fatal if the assessee had been given an opportunity to be heard. However, the authorized representative for the assessee argued that the assessment was invalid as no notice u/s 143(2) or u/s 142(1) was issued before completing the assessment u/s 143(3) read with section 147. The authorized representative relied on the remand report where the Assessing Officer admitted the necessity of issuing a notice u/s 143(2) for completing the assessment.

The tribunal analyzed the legal provisions and precedents cited by both parties. It emphasized that for an assessment u/s 143(3) read with section 147, a notice u/s 143(2) is mandatory within 12 months of filing the return. The tribunal found that no such notice was issued in this case, making the assessment order legally unsustainable. The tribunal dismissed the department's grounds, upholding the CIT (A)'s decision to annul the assessment order due to the absence of the mandatory notice u/s 143(2).

The tribunal distinguished the cited cases and concluded that the absence of notice u/s 143(2) rendered the assessment order invalid. As a result, the tribunal upheld the CIT (A)'s decision, dismissing the department's appeal. The cross objection filed by the assessee was also dismissed as academic. Ultimately, both the department's appeal and the assessee's cross objection were dismissed, affirming the CIT (A)'s decision to annul the assessment order due to the non-issuance of the mandatory notice u/s 143(2).

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