Tribunal upholds quashing of reassessment order due to notice non-service.

The Tribunal upheld the CIT(A)'s decision to quash the reassessment order due to the non-issuance and non-service of notice under section 143(2) of the Income Tax Act. The Tribunal emphasized the mandatory nature of the notice under section 143(2) for a valid assessment under section 143(3) and rejected the Department's argument that the irregularity could be cured under section 292BB. Additionally, the cross-objection raised by the assessee was dismissed as not pressed.

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Issues Involved:
1. Validity of the assessment order due to non-issuance and non-service of notice under section 143(2) of the Income Tax Act.
2. Additional grounds raised by the assessee in the cross-objection regarding the issuance of notice under section 148, and other procedural and substantive issues related to the assessment.

Detailed Analysis:

1. Validity of the Assessment Order Due to Non-Issuance and Non-Service of Notice under Section 143(2):
The primary issue in this case is whether the assessment order dated 30/12/2016, passed under section 143 read with section 147 of the Income Tax Act, 1961, is valid in the absence of issuance and service of notice under section 143(2). The ld. CIT(A) quashed the assessment order on the grounds that no such notice was issued and served on the assessee, rendering the reassessment null and void.

The Department argued that the non-issuance of notice under section 143(2) is a procedural irregularity that does not invalidate the assessment, citing precedents such as 'M/s Areva T & D India Ltd. Vs. ACIT (Chennai)' and 'Jai Prakash Singh'. They contended that the notice under section 142(1) served the purpose of section 143(2), and the irregularity could be cured under section 292BB of the Act.

On the other hand, the assessee's counsel maintained that the issuance of notice under section 143(2) is a mandatory statutory requirement, supported by Supreme Court rulings in 'ACIT vs. Hotel Blue Moon' and 'CIT vs. Laxman Das Khandelwal'. The absence of such a notice invalidates the reassessment order.

The Tribunal upheld the CIT(A)'s decision, emphasizing that the issuance of notice under section 143(2) is mandatory and not a mere procedural formality. The failure to issue this notice renders the assessment order invalid, and section 292BB cannot cure the complete absence of such a notice. The Tribunal cited the Supreme Court's decisions in 'ACIT vs. Hotel Blue Moon' and 'CIT vs. Laxman Das Khandelwal', affirming that the requirement of notice under section 143(2) is indispensable for a valid assessment under section 143(3).

2. Additional Grounds Raised by the Assessee in the Cross-Objection:
The assessee raised several grounds in the cross-objection, including:
- The notice under section 148 was issued beyond the prescribed time limit, rendering the subsequent assessment invalid.
- The notice under section 148 was issued and served at the wrong address, invalidating the notice and subsequent proceedings.
- The affixture of the notice was not done in accordance with legal requirements, making it invalid.
- The reasons recorded for reopening the assessment were based on 'reason to suspect' rather than 'reason to believe'.
- The Assessing Officer failed to dispose of the assessee's objections to the reasons for reopening before completing the assessment.
- The addition of Rs. 2,60,50,000 under section 68 was not justified as the assessee had provided sufficient evidence regarding the identity, creditworthiness, and genuineness of the loan transaction.
- The addition of Rs. 81,12,281 related to client code modification was not substantiated with evidence.

However, the assessee's counsel filed an application to withdraw the cross-objection as not pressed. Consequently, the Tribunal dismissed the cross-objection as not pressed.

Conclusion:
The Tribunal dismissed the Department's appeal, upholding the CIT(A)'s decision to quash the reassessment order due to the non-issuance and non-service of notice under section 143(2). The cross-objection filed by the assessee was also dismissed as not pressed. The Tribunal's decision reinforces the mandatory nature of the notice under section 143(2) for a valid assessment under section 143(3), and the inability of section 292BB to cure the complete absence of such a notice.

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