Assessment invalidated due to improper notice service, appeal allowed, reassessment quashed, additions deleted.

The tribunal quashed the reassessment proceedings due to improper service of notice under section 143(2), rendering the assessment invalid. As a result, the appeal of the assessee was allowed, and all additions were deleted. The reassessment was found to be invalid, and other grounds raised by the assessee were not adjudicated upon. The order was pronounced on 27th September 2019.

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Issues Involved:
1. Initiation of proceedings u/s 148 based on search material from a third party.
2. Notice issued u/s 148 in the old name of the company.
3. Service of notice u/s 148 being barred by time.
4. Issue of notice u/s 148 without proper reasons and approval.
5. Assessment made without service of notice u/s 143(2).
6. Reassessment u/s 147 being invalid.
7. Assessment made without proper opportunity to defend.
8. Liability to tax and computation of income.
9. Sustaining additions made by the assessing officer.

Detailed Analysis:

1. Initiation of Proceedings u/s 148 Based on Search Material from a Third Party:
The assessee contended that the initiation of proceedings under section 148 based on search material found and seized from a third party was contrary to law and the procedure prescribed under the Act due to the non-obstante provisions in section 153C for search cases. The CIT(A) erred in confirming the action under section 148.

2. Notice Issued u/s 148 in the Old Name of the Company:
The assessee argued that the notice dated 28-03-2012 issued under section 148 in the old name of the company was without jurisdiction due to a change in the company's name before the issuance of such notice.

3. Service of Notice u/s 148 Being Barred by Time:
The assessee claimed that the service of notice under section 148 was barred by time as the reasons recorded were never supplied to the assessee before passing the order, making the assessment without jurisdiction and contrary to law.

4. Issue of Notice u/s 148 Without Proper Reasons and Approval:
The assessee argued that the notice under section 148 was issued without recording reasons, forming proper reasons of belief, following the procedure laid down in the Act, and without the approval of the appropriate authority prescribed under section 151, making it bad in law.

5. Assessment Made Without Service of Notice u/s 143(2):
The primary argument raised by the assessee was that the assessment was made without the service of any notice under section 143(2) of the Act. The CIT(A) erred in stating that the notice under section 143(2) had been duly served without confronting the assessee with the remand report and evidence produced by the AO. The tribunal found considerable cogency in the assessee's contention, noting that the notice was served on the same date the assessee's counsel appeared before the AO, indicating improper service and non-application of mind by the AO. The tribunal relied on the decisions of the Hon'ble Delhi High Court in the case of Silver Line and ITAT, Delhi Bench in the case of Micron Enterprises Pvt. Ltd., which held that the notice under section 143(2) should be served after examining the return filed by the assessee.

6. Reassessment u/s 147 Being Invalid:
The tribunal quashed the reassessment proceedings, finding them invalid in the eyes of law, as the assessment was made without proper service of notice under section 143(2).

7. Assessment Made Without Proper Opportunity to Defend:
The assessee argued that the assessment was made without allowing a proper opportunity to defend, violating the principles of natural justice and making it null and void.

8. Liability to Tax and Computation of Income:
The assessee denied liability to tax as upheld by the CIT(A) and determined by the assessing officer. The tribunal did not need to adjudicate this issue as the reassessment proceedings were quashed.

9. Sustaining Additions Made by the Assessing Officer:
The CIT(A) sustained the additions made by the assessing officer, including Rs. 20,00,000 under section 68 for alleged accommodation entries and Rs. 70,000 under section 69C for alleged commission paid. However, these additions were not adjudicated due to the quashing of the reassessment proceedings.

Conclusion:
The tribunal quashed the reassessment proceedings due to the improper service of notice under section 143(2), rendering the assessment invalid. Consequently, the appeal of the assessee was allowed, and all additions stood deleted. The other grounds raised by the assessee were not adjudicated as the reassessment itself was invalid.

Order Pronounced:
The appeal of the assessee was allowed on 27th September 2019.

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