Tribunal cancels assessment order, penalties, citing procedural errors & lack of jurisdiction

The Tribunal allowed the appeals filed by the assessee, canceling the assessment order, impugned orders, and penalty proceedings. The Tribunal found various procedural and jurisdictional issues, including improper service of notice under section 148, lack of company existence during assessment, and mechanical approval under section 151. The addition of income under section 68 based on Form 26AS information was deemed unjustified. The Tribunal also noted the Assessing Officer's failure to provide the benefit of TDS after taxing the income. Ultimately, the Tribunal ruled in favor of the assessee, deleting the addition in dispute and penalties imposed.

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Issues:
1. Jurisdiction of reassessment proceedings and consequential assessment order.
2. Validity of assessment order due to company's non-existence.
3. Providing reasons for reopening and legality of proceedings.
4. Validity of initiating proceedings under section 147 / 148.
5. Approval under section 151 for initiating reassessment proceedings.
6. Addition of Rs. 29,05,378/- under section 68 based on 26AS information.
7. Benefit of TDS not provided after taxing income.

Detailed Analysis:

Issue 1: Jurisdiction of reassessment proceedings and consequential assessment order
The assessee challenged the reassessment proceedings and consequential assessment order on the grounds that the notice under section 148 was not served properly, rendering the proceedings illegal and unsustainable. The Assessing Officer issued the notice on 31.03.2017, but it was returned unserved. The Appellate Tribunal found that the prescribed procedure for service of notice was not followed, making the assessment order and the order by the First Appellate Authority illegal. Citing relevant case laws, the Tribunal canceled both orders.

Issue 2: Validity of assessment order due to company's non-existence
The assessment order was framed in the name of the company, but the company's name had been struck off from the register of members before the order was passed. The Tribunal held that the order was nonest and unenforceable in law due to the company's non-existence at the time of assessment.

Issue 3: Providing reasons for reopening and legality of proceedings
The absence of providing reasons for reopening and denying the opportunity to object to the reopening was argued to make the proceedings illegal. The Tribunal found that the lack of proper service of notice under section 148 rendered the proceedings unsustainable in law.

Issue 4: Validity of initiating proceedings under section 147 / 148
The initiation of proceedings under section 147 / 148 was challenged as unsustainable, mechanical, and without jurisdiction. The Tribunal agreed that the prescribed procedure for serving the notice was not followed, making the initiation of proceedings illegal.

Issue 5: Approval under section 151 for initiating reassessment proceedings
The approval under section 151 by higher authorities was questioned as being mechanical and not legally competent. The Tribunal found that the lack of proper service of notice rendered the approval ineffective, supporting the cancellation of the proceedings.

Issue 6: Addition of Rs. 29,05,378/- under section 68 based on 26AS information
The addition of Rs. 29,05,378/- under section 68 was contested on the basis of information from Form 26AS. The Tribunal found no justification in law and on merits for making this addition, further supporting the cancellation of the assessment order.

Issue 7: Benefit of TDS not provided after taxing income
The Tribunal noted that the Assessing Officer erred in not providing the benefit of TDS as per Form 26AS after taxing the income on which TDS had been deducted. This issue was considered in conjunction with the invalidity of the assessment order and the proceedings.

In a separate judgment related to penalty proceedings, the Tribunal deleted the penalty imposed by the Assessing Officer and confirmed by the First Appellate Authority, as the addition on which the penalty was based had been deleted in the appeal related to the assessment order.

In conclusion, the Tribunal allowed the appeals filed by the assessee, canceled the assessment order, impugned orders, and penalty proceedings, and deleted the addition in dispute.

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