Assessment order quashed due to invalid notice service under Income Tax Act section 143(2).

The Tribunal dismissed the revenue's appeal as infructuous and allowed the cross objections of the assessee, quashing the assessment order due to the invalid service of the notice under section 143(2) of the Income Tax Act.

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Issues:
1. Validity of notice under section 143(2) of the Income Tax Act.
2. Adjudication of legal ground no. 5 by the Commissioner of Income Tax (Appeals).
3. Compliance with the principles of natural justice in providing sufficient time for reply.

Issue 1: Validity of notice under section 143(2) of the Income Tax Act:
The appeal and cross objection were filed against the order of the Commissioner of Income Tax (Appeals) regarding the validity of the notice under section 143(2) of the Act. The Departmental Representative argued that the assessee did not press legal ground no. 5 before the CIT(A), which challenged the service of the notice. However, the Assessee's Representative contended that as the CIT(A) granted relief to the assessee on merits, the assessee had the right to re-agitate the legal objection through cross objection. The Tribunal held that since the revenue challenged the CIT(A) order granting relief, the assessee could raise the legal ground challenging the notice's validity. The legal objection by the DR was dismissed.

Issue 2: Adjudication of legal ground no. 5 by the Commissioner of Income Tax (Appeals):
The AR acknowledged that ground no. 5 was not pressed before the CIT(A). However, it was argued that the assessee verbally requested not to press the ground, which was dismissed. The AR argued that the assessee had to re-agitate the legal objection through cross objection as the CIT(A) granted relief on merits. The Tribunal agreed that the assessee had the right to challenge the validity of the notice under section 143(2) despite not pressing the ground before the CIT(A).

Issue 3: Compliance with the principles of natural justice in providing sufficient time for reply:
The AR highlighted that the notice served on the assessee was not received by the Sr. Post Master, questioning the validity of the service. It was argued that even if the notice was served on the same day as the hearing date, it did not provide sufficient time for compliance, violating natural justice principles. The Tribunal noted that the notice should have been served within 6 months from the end of the relevant financial year, which was not proven by the revenue. As the notice was not validly served, the assessment order was deemed void, and the cross objections of the assessee were allowed.

In conclusion, the Tribunal dismissed the revenue's appeal as infructuous and allowed the cross objections of the assessee, quashing the impugned assessment order due to the invalid service of the notice under section 143(2) of the Income Tax Act.

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