Invalid Notice under Section 153A Renders Assessment Order Void

The ITAT held that the notice issued under section 153A for the Assessment Year 2017-18 was invalid, rendering the assessment order void ab initio. The assessment order framed under section 153A r.w.s. 143(3) was deemed illegal and without jurisdiction due to the incorrect invocation of section 153A. The addition of Rs. 11,00,000 on account of intercepted cash was found unjustified, leading to the deletion of the entire addition. This case underscores the importance of adhering to procedural requirements and jurisdictional aspects in tax assessments for the validity and legality of assessment orders.

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Issues involved:
The issues involved in this legal judgment are related to the assessment order passed under section 153A r.w.s. 143(3) for the Assessment Year 2017-18. The main contentions raised by the Assessee in the appeal include the legality of the notice issued under section 153A, the validity of the assessment order, and the addition made on account of cash intercepted.

Issue 1: Validity of Notice u/s 153A:
The Assessee contended that the notice issued under section 153A for the Assessment Year 2017-18 was invalid as it was beyond the permissible period of six years. The CIT(A) dismissed this contention, stating that the mere issue of an incorrect notice does not vitiate the entire assessment order. However, the ITAT held that the notice u/s 153A for the said assessment year was invalid, rendering the assessment order void ab initio.

Issue 2: Legality of Assessment Order:
The Assessee challenged the assessment order framed under section 153A r.w.s. 143(3), arguing that it was illegal and without jurisdiction. The ITAT agreed with the Assessee's contention, ruling that the assessment was bad in the eyes of the law due to the incorrect invocation of section 153A for the Assessment Year 2017-18.

Issue 3: Addition on Cash Intercepted:
The Assessee disputed the addition of Rs. 11,00,000 out of Rs. 22,00,000 made by the AO on account of cash intercepted, claiming it was based on conjectures and without sufficient material. The ITAT found that the addition was not justified, and the CIT(A) erred in confirming the AO's order. The ITAT held that the entire addition should be deleted as it was not warranted.

This legal judgment highlights the importance of adhering to the procedural requirements and jurisdictional aspects in tax assessments. The ITAT's decision emphasizes the significance of issuing correct notices and conducting assessments within the prescribed legal framework to ensure the validity and legality of the assessment orders.

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