Appeal Granted: Notice Absence Invalidates Assessment

The Appellate Tribunal allowed the appeal, quashing the assessment order due to the absence of a notice under section 143(2) of the Income Tax Act. The Tribunal emphasized that section 292BB does not cure the complete absence of notice, rendering the assessment proceedings null and void. Consequently, challenges to the initiation of reassessment proceedings and additions made by the Assessing Officer were left unresolved for future consideration.

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Issues involved:
Validity of notice u/s 143(2) for assessment proceedings, Challenge to initiation of reassessment proceedings under section 147, Additions made by the Assessing Officer

Validity of notice u/s 143(2) for assessment proceedings:
The appeal challenged the validity of the assessment proceedings due to the absence of a notice under section 143(2) of the Income Tax Act. The Revenue argued that the participation of the assessee in the proceedings waived the requirement of the notice under section 143(2) as per section 292BB. However, the Appellate Tribunal noted that the absence of the notice itself cannot be cured by section 292BB. Citing the Supreme Court's decision in CIT vs Laxman Das Khandelwal, the Tribunal emphasized that section 292BB only addresses infirmities in the service of notice and does not cure the complete absence of notice under section 143(2). As the department failed to produce the notice or provide details, the Tribunal held that the assessment proceedings were null and void without the requisite notice. Consequently, the assessment order under section 143(3) read with section 147 was quashed, and the appeal on this ground was allowed.

Challenge to initiation of reassessment proceedings under section 147:
The assessee contested the initiation of reassessment proceedings under section 147 of the Act. The Appellate Tribunal upheld the initiation of reassessment proceedings, stating that the AO had jurisdiction to proceed under section 147 based on information received regarding fictitious profits and losses misused by some brokers, including the assessee. The Tribunal found the initiation of reassessment proceedings valid in this context.

Additions made by the Assessing Officer:
The Assessing Officer made additions to the assessee's income, including an alleged bogus loss and commission paid on the fictitious loss. The Appellate Tribunal reviewed the additions but did not delve into a detailed analysis as the assessment order was quashed solely based on the absence of the notice under section 143(2). Since the assessment order was set aside, the Tribunal did not provide a specific ruling on the additions made by the Assessing Officer, keeping those issues open for future consideration.

In conclusion, the Appellate Tribunal allowed the appeal by the assessee, quashing the assessment order due to the absence of a notice under section 143(2) of the Act. The Tribunal emphasized the importance of proper notice issuance and clarified that section 292BB does not cure the complete absence of notice. As a result, the other issues raised in the appeal, including challenges to the initiation of reassessment proceedings and additions made by the Assessing Officer, were left unresolved for future consideration.

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