2017 (12) TMI 1342 - AT - Income Tax

Tribunal nullifies Assessment Order for improper notice service, emphasizing statutory timelines and jurisdictional requirements.

The Tribunal allowed the appeal, emphasizing adherence to statutory timelines and jurisdictional requirements. The Assessment Order was deemed null and ... Validity of issue of service of notice u/s.143(2)/148 - Reopening of assessment - Held that:- In the case on hand we see that the notice u/s. 143(2) itself is dated 19.01.2015 which is beyond the date prescribed for issue of notice i.e. 30.09.2012. In such circumstances the Assessing Officer could not have issued any notice prior to 30.09.2012. Therefore, admittedly in this case as the notice u/s. 143(2) was issued beyond 30.09.2012 and in view of the decision of the Hon'ble Allahabad High Court in the case of CIT v. M/s. Salarpur Cold Storage (Pvt.) Ltd. [2014 (8) TMI 732 - ALLAHABAD HIGH COURT] the Assessing Officer could not have assumed jurisdiction in the absence of valid issue of notice u/s. 143(2) of the Act. Thus, respectfully following the said decision, we hold that there is no valid issue of notice u/s. 143(2) of the Act in this case and consequently the Assessment Order passed u/s. 143(3) is a nullity.- Decided in favour of assessee. Issues:Validity of service of notice u/s.143(2)/148 of the Act and merits of the disallowances raised in the appeal.Analysis:The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2011-12, challenging the service of notice u/s. 143(2)/148 of the Act and the merits of disallowances. The assessee argued that the notice was issued to an old address where business was conducted before 2008-09, despite the new address being known to the Assessing Officer. The notice u/s. 143(2) was also issued beyond the time limit specified under the Act, rendering the proceedings null and void according to the assessee. The Department contended that participation in the proceedings precludes the assessment order from being null and void under section 292BB of the Act.The Tribunal analyzed the issue of the invalid service of notice u/s. 143(2) of the Act. It was noted that the notice was issued and served on the assessee beyond the prescribed time limit, as per the proviso to section 143(2)(ii). Referring to the decision of the Hon'ble Allahabad High Court in a similar case, it was emphasized that the assumption of jurisdiction under section 143(3) would be invalid if the notice was not issued within the specified time frame. The Tribunal highlighted the significance of the proviso to clause (ii) of sub-section (2) of Section 143, which mandates service of notice within the stipulated period for jurisdiction to be valid.Further, the Tribunal discussed the implications of Section 292BB of the Act, which provides a deeming fiction regarding the service of notices. However, it was clarified that this provision cannot obviate the need for complying with jurisdictional conditions, such as issuing a notice under Section 143(2) within the prescribed period. Citing the Supreme Court's decision, it was reiterated that the omission to issue a notice under Section 143(2) is not a procedural irregularity and cannot be cured. Therefore, the Tribunal held that the Assessment Order passed u/s. 143(3) was a nullity due to the invalid issue of notice u/s. 143(2), and subsequently quashed the Assessment Order.In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the importance of adhering to statutory timelines and jurisdictional requirements in the issuance of notices under the Income Tax Act. The Assessment Order was deemed null and void due to the failure to serve a valid notice u/s. 143(2), rendering the grounds on merits moot in light of the procedural irregularity.