Assessment Order Invalidated, Appeal Allowed, Order Cancelled.

The Tribunal declared the assessment order invalid due to the non-issuance of the mandatory notice under Section 143(2), rendering the reassessment proceedings void ab initio. As a result, the assessee's appeal was allowed, and the impugned order was canceled based on the mandatory nature of the notice under Section 143(2) for valid reassessment proceedings.

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Issues Involved:
1. Validity of the assessment order under Section 147 read with Section 148.
2. Proper service of statutory notice under Section 148.
3. Compliance with statutory conditions under Section 147 and Section 148.
4. Validity of reasons recorded for reopening the assessment under Section 147.
5. Issuance of statutory notice under Section 143(2).
6. Enhancement of income by the CIT(A).
7. Addition of unexplained share capital.
8. Consideration of material and evidence provided by the assessee.
9. Basis of addition without adverse material.
10. Violation of Section 142(3) by not allowing the assessee to rebut material collected.
11. Violation of principles of natural justice by not allowing cross-examination.

Detailed Analysis:

1. Validity of the Assessment Order under Section 147 read with Section 148:
The assessee challenged the validity of the assessment order passed under Section 147 read with Section 148 of the Income Tax Act, 1961. The primary contention was that the assessment was conducted without proper service of the statutory notice under Section 148, which is a mandatory requirement for initiating reassessment proceedings.

2. Proper Service of Statutory Notice under Section 148:
The assessee argued that the notice under Section 148 was not properly served, as the initial notice issued on 30.3.2010 was returned unserved. The subsequent compliance was made by the assessee's representative, but the procedural lapse in the service of the notice was a critical point of contention.

3. Compliance with Statutory Conditions under Section 147 and Section 148:
The assessee contended that the statutory conditions prescribed under Section 147 and Section 148 were not complied with, rendering the reassessment proceedings invalid. The proper and timely service of notice is a statutory condition that was allegedly not met by the Assessing Officer (AO).

4. Validity of Reasons Recorded for Reopening the Assessment under Section 147:
The assessee challenged the reasons recorded for reopening the assessment, arguing that they did not meet the requirements of Section 147. The reasons for reopening must be based on tangible material and should justify the belief that income has escaped assessment.

5. Issuance of Statutory Notice under Section 143(2):
The Tribunal focused significantly on the non-issuance of the notice under Section 143(2). The assessee argued that the failure to issue this notice, which is mandatory for completing the assessment, rendered the reassessment proceedings invalid. The Tribunal agreed with this contention, citing various judicial precedents, including the Supreme Court's decision in ACIT vs. Hotel Blue Moon, which held that the issuance of notice under Section 143(2) is mandatory and not merely procedural.

6. Enhancement of Income by the CIT(A):
The CIT(A) enhanced the income of the assessee by making an addition of Rs. 15.10 Crores on account of share application money, as opposed to the Rs. 2.40 Crores added by the AO. The assessee argued that this enhancement was unjustified and not supported by adequate evidence.

7. Addition of Unexplained Share Capital:
The addition of Rs. 15.10 Crores on account of unexplained share capital was contested by the assessee. The assessee provided various documentary evidence, including PAN, share application forms, affidavits, and bank account copies of the share applicant companies, to support the genuineness of the transactions.

8. Consideration of Material and Evidence Provided by the Assessee:
The assessee argued that all material and evidence were provided to the AO and the CIT(A), and these were sufficient to explain the share capital. The CIT(A)'s decision to confirm the addition despite this evidence was challenged as being erroneous.

9. Basis of Addition without Adverse Material:
The assessee contended that the addition was made without any adverse material or contradiction in the evidence submitted. The Tribunal noted that the AO relied on statements and information collected without giving the assessee an opportunity to rebut the same, which was a violation of the principles of natural justice.

10. Violation of Section 142(3) by Not Allowing the Assessee to Rebut Material Collected:
The Tribunal observed that the reassessment order was made on the basis of material collected at the back of the assessee without giving an opportunity to rebut the same, violating Section 142(3). This procedural lapse was a significant factor in declaring the reassessment invalid.

11. Violation of Principles of Natural Justice by Not Allowing Cross-Examination:
The addition of Rs. 15.10 Crores was based on the statement of a person without giving the assessee an opportunity to cross-examine, which was a gross violation of the principles of natural justice. The Tribunal emphasized that such procedural lapses could not be overlooked.

Conclusion:
The Tribunal concluded that the non-issuance of the mandatory notice under Section 143(2) rendered the reassessment proceedings invalid. The assessment order dated 31.12.2010 was declared invalid and void ab initio. Consequently, the appeal of the assessee was allowed, and the impugned order was canceled. The Tribunal's decision was based on multiple judicial precedents that underscored the mandatory nature of the notice under Section 143(2) for valid reassessment proceedings.

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