TaxTMI 
TaxTMI 
2025 (9) TMI 218
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.... CIT(A) has erred in sustaining addition of Rs. 11,00,000 on account of bogus LTCG on sale of shares by applying sec68 treating it as unexplained cash credits; while, the assessee has discharged the onus cast upon him u/s68 and revenue has not disproved the documentary evidences/ materials submitted before him; addition is not justified & is liable to be deleted. Gr.No.3 "On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs. 11,000 on account of commission expenses i.e. 1% of Rs. 11,00,000 by applying sec. 69C treating it as unexplained expenditure, which is merely presumption & surmises by the AO without bringing any material/evidence on record in support of his baseless contention; addition is unjustified & is liable to be deleted." Gr.No.4 "The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing." 2. At the time of hearing none appeared on behalf of the assessee. However, an adjournment application has been filed which is rejected. The matter is heard after recording submissions of the Ld. Sr. DR and after careful consideration of the do....
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....that no details of its service are available in the system. I am of the considered view that failure to issue and serve notice by the department u/s. 143(2) of the Act renders the reassessment order invalid, bad in law and void ab initio. 6. The Ld. Sr. DR could not place on record any evidence/document to refute these facts already on record. The Ld. Sr. DR has relied on the findings of the A.O wherein though issuance of notice has been referred to, however as per admission of the department, there is no evidence regarding service of the same and without any service, issuance of notice is meaningless for the reason that the concerned assessee still does not know that in the case he is supposed to be ready regarding the proceedings and what defence he should prepare in his case which is essential with regard to principles of natural justice for providing fair and reasonable opportunity of hearing to every tax payer assessee. 7. At this stage, I find that Hon'ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon, 321 ITR 362 (SC) has held that issuance of notice u/s. 143(2) of the Act is sine-qua-non for framing of an assessment u/s. 143(3) of the Act. In this case, reasse....
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....the aforesaid judgment are culled out as follows: 10. The aforesaid view came to be reiterated by the Court in Principal Commissioner of Income-Tax vs. Dart Infrabuild Pvt Ltd5, as would be evident from the following observations which appear in that decision:- "15.2 The absence of notice, under section 143(2), impregnates the proceedings with a jurisdictional defect and, hence, renders it invalid in the eyes of the law. This position is no longer res integra, as demonstrated by the observations made in Principal CIT v. Shri Jai Shiv Shankar Traders Pot. Ltd.1 (page 452 of 383 ITR): "12. The narration of facts as noted above by the court makes it clear that no notice under section 143(2) of the Act was issued to the assessee after December 16, 2010, the date on which the assessee informed the Assessing Officer that the return originally filed should be treated as the return filed pursuant to the notice under section 148 of the Act. 13. In DIT v. Society for Worldwide Inter Bank Financial, Tele-2023 SCC OnLine Del 7382 communications', this court invalidated a reassessment proceeding after noting that the notice under section 143(2) of the Act....
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....m raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to section 292BB of the Act, however, carves out an exception to the effect that the section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292BB of the Act cannot obviate the requirement or complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under section 143(3) of the Act, it is necessary to issue a notice under section 143(2) of the Act and in the absence of a notice under section 143(2) of the Act, the assumption of jurisdiction itself would be invalid.' 16. In the same decision in Salarpur Cold Storage (P.) Ltd. (supra), the Allahabad High Court noticed that the decision of the Supreme Court in Asst. CIT v. Hotel Blue Moon' where in relation to block assessment, the Supreme Court held that the requirement to issue notice under section 143(2) was mandatory. It was not 'a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with'. ....
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....rned and not with regard to failure to „issue‟ notice. In other words, the failure of the Assessing Officer, in reassessment proceedings, to issue notice under section 143(2) of the Act, prior to finalising the reassessment order, cannot be condoned by referring to section 292BB of the Act. 19. The resultant position is that as far as the present case is concerned the failure by the Assessing Officer to issue a notice to the assessee under section 143(2) of the Act subsequent to December 26, 2010 when the assessee made a statement before the Assessing Officer to the effect that the original return filed should be treated as a return pursuant to a notice under section 148 of the Act, is fatal to the order of reassessment." (emphasis is ours)" 11. It is also pertinent to note that the decision in Ashok Chaddha was also pressed into aid by the Revenue in Commissioner of Income-Tax vs. Delhi Kalyan Samiti6. This becomes evident from a reading of Para 4.8 of that decision and where the submissions of the respondents therein came to be recorded as follows:- "4.8 Mr. Dileep Shivpuri, learned Senior Standing counsel submitted that since the Assessee h....
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....rejecting the return filed by the Assessee. 10. The decision of this Court in Ashok Chaddha (supra) was rendered in the context of Section 153A of the Act and in our view, the same is not applicable in the present case. This Court in several cases pertaining to proceedings under Section 147 has held that a notice under Section 143(2) is mandatory. [See: Alpine Electronics Asia (P.) Ltd. v. DGIT: 341 ITR 247 (Del), DIT v. Society for Worldwide Interbank Financial Telecommunication: 323 ITR 249 (Del), Pr. CIT v Shri Jai Shiv Shankar Traders Pvt. Ltd.: 282 CTR 435 (Del) and CIT v. Rajeev Verma: 336 ITR (All)]. It is also relevant to note that clause (b) of the proviso to Section 148(1) of the Act also specifically extends the period for issuance of notice under Section 143(2) of the Act." 13. Consequently, and in light of the above, we find ourselves unable to sustain the submissions addressed by Mr. Agrawal. In the facts of our case, the failure to comply with Section 143(2) was conceded. The reassessment action would thus be liable to be quashed on this short ground alone. 14. We consequently allow the instant writ petitions and quash the impugned notices ....