Tribunal cancels assessment order due to non-service of jurisdictional notice

The Tribunal allowed the Assessee's appeal due to the non-service of the jurisdictional notice u/s. 143(2), citing legal precedent emphasizing its mandatory nature. The assessment order was canceled, and the disputed addition of Rs. 60,29,000/- was not addressed on merits as a result.

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Issues Involved:
1. Non-service of jurisdictional notice u/s. 143(2) before exparte assessment framed u/s. 144.
2. Addition of Rs. 60,29,000/- sustained by CIT(A) on merits.

Analysis:

Issue 1: Non-service of jurisdictional notice u/s. 143(2) before exparte assessment framed u/s. 144:
The Assessee filed an appeal against an exparte assessment order under section 144 of the Income Tax Act, 1961, due to the non-service of the jurisdictional notice u/s. 143(2). The AO finalized the assessment exparte due to the Assessee's non-cooperation and lack of compliance. The Ld. CIT(A) partly allowed the appeal, but the Assessee further appealed to the Tribunal. The Assessee argued that the legal issue of non-service of the mandatory notice u/s. 143(2) is crucial, citing the decision in ACIT & Anr. Vs. Hotel Blue Moon, where the Supreme Court held such notice as mandatory. The Ld. CIT(A) admitted additional evidence under Rule 46A(1)(b) and (c) due to non-service of notices u/s. 143(2)/142(1). The Tribunal, following the legal precedent, canceled the assessment order and allowed the appeal, emphasizing the mandatory nature of the notice u/s. 143(2).

Issue 2: Addition of Rs. 60,29,000/- sustained by CIT(A) on merits:
The Assessee challenged the addition of Rs. 60,29,000/- made by the AO, which was sustained by the CIT(A). The Assessee argued that the addition was based on irrelevant grounds and without proper enquiry. The Assessee contended that the amount received from Sh. Har Prakash was adequately explained and supported by evidence, including bank statements and an agreement to sell. However, the AO finalized the assessment exparte, leading to the disputed addition. The Tribunal did not delve into the merits of this addition as the cancellation of the assessment order rendered this issue moot.

In conclusion, the Tribunal allowed the Assessee's appeal due to the non-service of the jurisdictional notice u/s. 143(2), following the legal precedent emphasizing the mandatory nature of such notice, thereby canceling the assessment order and the impugned order.

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