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Assessee's challenge to reopening assessment dismissed; Section 143(2) notice not mandatory after valid Section 148 notice issued ITAT Ahmedabad dismissed the assessee's challenge to reopening assessment validity, ruling that Section 143(2) notice was not mandatory when Section 148 ...
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Assessee's challenge to reopening assessment dismissed; Section 143(2) notice not mandatory after valid Section 148 notice issued
ITAT Ahmedabad dismissed the assessee's challenge to reopening assessment validity, ruling that Section 143(2) notice was not mandatory when Section 148 notice was properly issued for reopened assessment. The tribunal found the assessee's late filing of return on 14.02.2023 was original return, not response to Section 148 notice. However, regarding Section 68 addition, ITAT remanded the matter to AO for fresh adjudication as certain documents submitted by assessee were not properly considered by lower authorities. Appeal partly allowed for statistical purposes.
Issues: 1. Validity of assessment under Section 147 without issuing notice under Section 143(2) of the Act. 2. Addition of Rs. 62,50,000 under Section 68 disregarding documentary evidence.
Issue 1: Validity of assessment under Section 147 without issuing notice under Section 143(2) of the Act
The appellant contested that the assessment under Section 147 was invalid as no notice under Section 143(2) was served despite filing the return of income. The appellant argued that the absence of this notice rendered the assessment illegal, citing legal precedents. The appellant emphasized the mandatory nature of the notice under Section 148 of the Act before making assessments. The appellant also referred to Circular No.1/2023 issued by the CBDT. However, the Department argued that the return filed by the appellant was not valid as per the Assessing Officer, justifying the absence of a Section 143(2) notice. The Department relied on the Assessment Order and the CIT(A) decision to support their stance. The Tribunal noted that the appellant filed the return after the notice under Section 148, which was not considered a valid response. The Tribunal agreed with the CIT(A) and dismissed ground no.1.
Issue 2: Addition of Rs. 62,50,000 under Section 68 disregarding documentary evidence
The appellant contended that both the Assessing Officer and the CIT(A) overlooked the documentary evidence presented, leading to the addition of Rs. 62,50,000 under Section 68. The Department argued that no valid explanation or evidence was provided by the appellant during the assessment. The Tribunal acknowledged that certain documents submitted by the appellant were not considered during the assessment process. Consequently, the Tribunal decided to remand this issue back to the Assessing Officer for a thorough review, emphasizing the importance of considering all evidence and providing the appellant with a fair hearing. As a result, ground no.2 was partly allowed for statistical purposes.
In conclusion, the Tribunal partially allowed the appeal for statistical purposes, dismissing ground no.1 regarding the validity of the assessment under Section 147 without a notice under Section 143(2) and remanding ground no.2 back to the Assessing Officer for further examination based on the documentary evidence provided by the appellant.
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