2021 (10) TMI 953 - AT - Income Tax

Appellate Tribunal voids reassessment for missed notice deadline, stresses statutory timelines

The Appellate Tribunal ITAT Kolkata allowed the appeal of the assessee, declaring the reassessment order void due to the AO's failure to issue the ... Reopening of assessment u/s 147 - period of limitation to issue notice u/s 143 - non-issuance of notice u/s. 143(2) of the Income Tax Act, 1961 within six months from the end of the financial year in which the return u/s. 148 was filed i.e. 30.03.2019 which was barred by limitation - HELD THAT:- Here in this case, the assessee vide letter dated 30.03.2019 has intimated to the AO pursuant to the notice u/s. 148 of the Act to treat the original return filed by it as return pursuant to the notice u/s. 148 of the Act, the AO ought to have issued mandatory notice u/s. 143(2) on or before 30th September, 2019. Whereas in this case, the AO had issued notice u/s. 143(2) on 24.12.2019. Therefore, the service/issuance of mandatory notice u/s. 143(2) of the Act dated 24.12.2019 was not permitted as per proviso to Section 143(2) of the Act is ergo without jurisdiction. So the consequent re-assessment order of AO dated 28.12.2019 is void as held by this Tribunal in the case of Asiatic Oxygen [2019 (7) TMI 1875 - ITAT KOLKATA] and similar arguments were raised by the Ld. DR/AO to overcome the proviso to section 143(2) of the Act, however for the same reason as taken note of by this Tribunal in the case of Asiatic Oxygen (supra), we repel the contention of Ld. DR in this case also. Therefore, the re-assessment order of AO dated 28.12.2019 is void in the eyes of law. Appeal of assessee allowed. Issues:- Non-issuance of notice u/s. 143(2) within the prescribed time frame after filing the return u/s. 148.Analysis:The appeal before the Appellate Tribunal ITAT Kolkata involved a challenge by the assessee against the order of the Ld. CIT(A)-National Faceless Appeal Centre for AY 2012-13. The primary legal issue raised by the assessee was the non-issuance of notice u/s. 143(2) within six months from the end of the financial year in which the return u/s. 148 was filed, which was contended to be barred by limitation. The assessee's representative argued that the notice u/s. 143(2) was issued after the prescribed time limit, invoking the proviso u/s. 143(2) which prohibits the AO from issuing such notice beyond the specified period. The representative relied on precedents and emphasized that the legal issue was well-established. The Tribunal noted the sequence of events, including the issuance of the notice u/s. 148 and the subsequent response by the assessee requesting the original return to be treated as filed in response to the notice u/s. 148. It was observed that the notice u/s. 143(2) was issued beyond the permissible time frame, rendering the reassessment order void in the eyes of the law.The Tribunal referred to a previous decision involving similar facts and legal issues, emphasizing the mandatory nature of issuing notice u/s. 143(2) within the prescribed period. The Tribunal highlighted that the AO's action in issuing the notice after the expiry of the specified time limit was impermissible and invalidated the reassessment. The Tribunal reiterated that the issuance of notice u/s. 143(2) is crucial for scrutiny assessments, and non-compliance with the statutory timelines renders subsequent actions null and void. The Tribunal dismissed the revenue's appeal, upholding the Ld. CIT(A)'s decision to quash the reassessment proceedings due to the jurisdictional issue arising from the untimely issuance of the notice u/s. 143(2).In conclusion, the Tribunal allowed the appeal of the assessee, declaring the re-assessment order as void in the eyes of the law due to the AO's failure to issue the mandatory notice u/s. 143(2) within the prescribed time frame. The judgment emphasized the significance of adhering to statutory timelines in assessment proceedings to ensure procedural fairness and compliance with legal requirements.