TaxTMI 
TaxTMI 
2026 (4) TMI 1105
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....d, facts of the case are that the assessee filed return of income for the year under consideration i.e. AY 2012-13 on 29.03.2014 declaring total income at Rs. 1,08,15,970/-. The return of income was processed u/s 143(1) of the Income-tax Act, 1961 (in short 'the Act') accepting the returned income. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 22.09.2014, which was duly served upon the assessee. Thereafter, due to cadre restructuring, jurisdiction of the assessee was transferred to the Assistant Commissioner of Income- tax -10(3)(1), Mumbai and a fresh notice u/s 142(1) of the Act dated 19.12.2014 was issued and served upon the assessee. Thereafter, the assessment was completed on 26.03.2015 where, the Assessing Officer disallowed the claim of the loss of the assessee of Rs. 1,84,86,824/-. The assessee preferred appeal before the Ld. CIT(A) on the legal ground challenging the validity of the notice u/s 143(2) of the Act by the Jurisdiction Assessing Officer. The Ld. CIT(A) rejected the objection of the assessee. But on the merit of the addition, the Ld. CIT(A) directed the Assessing Officer for verification whether the sales re....
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....iod of limitation. There is also no dispute that, at the time of issuance of the said notice, the said officer had valid jurisdiction over the assessee. 6.1 It is further noted that, pursuant to cadre restructuring in the Income-tax Department, the jurisdiction over the assessee's case was subsequently transferred to the Assistant Commissioner of Income-tax, Circle-10(3)(1), Mumbai, who thereafter continued the assessment proceedings and completed the assessment under section 143(3) of the Act. 6.2 The sole contention of the assessee is that upon such transfer of jurisdiction, the transferee Assessing Officer was required to issue a fresh notice under section 143(2) of the Act. Admittedly, no such notice was issued by the transferee officer. 6.3 The crucial issue, therefore, is whether the absence of a fresh notice under section 143(2) by the transferee Assessing Officer renders the assessment invalid, when a valid notice had already been issued by the jurisdictional Assessing Officer within the period of limitation. 6.4 The relevant finding of the Ld. CIT(A) of the issue in dispute is reproduced as under: "4. I have carefully considered the assessment orde....
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....;s case moved to ACIT 10(3)(1) Mumbai, and the said transferee officer continued with the assessment with the issue of notice under Section 142(1) of the Act and completed the assessment after hearing the appellant. In view of the above, I note that the fact of the appellant's case differ from that in the case of Gulf View Homes Limited, in as much as in that case, the original notice under Section 143(2) issued by the transferor officer itself was invalid for the reason that the said officer had no jurisdiction over the assessee. However, in the appellant's case, the original notice under Section 143(2) was issued by the jurisdictional Assessing Officer, and nothing has been brought on record to show that the said officer had no jurisdiction over the appellant's case. The transfer was effected consequent to the realignment of jurisdiction due to cadre restructuring in the Income Tax Department. In the above facts and circumstances, I do not find any merit in the appellant's argument challenging the assessment made, and accordingly, I dismiss the same. 4.2. With regard to the addition of Rs. 1,84,86,824 on account of the disallowance of ot....
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....ntext that the assessment was held to be invalid. The relevant finding of the Tribunal in the case of Golf View Homes Ltd. (supra) is reproduced as under: "19.9. We find the facts of the present case are identical to the case already decided by the ITAT Kolkata Bench in the case of Rungta Irrigation Ltd. (supra). The issue in the case before the ITAT Kolkata Bench in the case of M/s. Rungta Irrigation Ltd. Vs. ACIT in ITA No.1224/Kol/2019 order dated 6.9.2019 was whether, non-issue of notice u/s. 143(2) by the AO who passed the assessment order will render the order of assessment void or was it a curable defect. It was the plea of the Assessee that as held by the Hon'ble Supreme Court in Hotel Blue Moon 321 ITR 362 (SC), non-issue of notice u/s. 143(2) by the AO who passed the order of assessment renders the order of assessment a nullity. The factual details in that case were as follows: Sl. No. Date Events 1. Upto 08.10.2008 DCIT, Circle-15(1), New Delhi was the AO of assessee on the basis of territorial jurisdiction. 2. On 08.10.2008 CIT-V, Delhi transferred the jurisdiction over the assessee's case u/s. 127 to DCIT, Central Circle-1, Ranch....
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..../s 143(2) of the Act and therefore the said order is bad in law as held by the Hon'ble Supreme Court in CIT V Hotel Blue Moon (2010) 321 ITR 362 (S.C) wherein the Hon'ble Supreme Court has held that issue of a legally valid notice u/s. 143(2) is mandatory for usurping jurisdiction to frame scrutiny assessment u/s. 143(3) of the Act and absence of a valid notice u/s 143(2) is not a curable defect. The Tribunal also noticed that it's view in the case of Hotel Blue Moon (supra) was reiterated by the Hon'ble Apex Court in the case of CIT Vs Laxman Das Khandelwal (108 taxmann.com 183). The relevant observations of the Hon'ble Supreme Court were extracted and are as follows: "5. At the outset, it must be stated that out of two questions of law that arose for consideration in Hotel Blue Moon's case the first question was whether notice under Section 143(2) would be mandatory for the purpose of making the assessment under Section 143(3) of the Act. It was observed :- "3. The Appellate Tribunal held while affirming the decision of CIT (A) that non-issue of notice under Section 143(2) is only a procedural irregularity and the same is curable. In the ....
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..... Said Section 292BB is to the following effect :- "292BB. Notice deemed to be valid in certain circumstances .- Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was - (a) Not served upon him; or (b) Not served upon him in time; or (c) Served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." 7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served an the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not....
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....otice under section 142(1) and granting adequate opportunity of hearing. 6.9 The findings recorded by the Commissioner of Income-tax (Appeals), distinguishing the facts of the present case from those in Golf View Homes Ltd.(supra), are well reasoned and in accordance with law. 6.10 In view of the foregoing discussion, we find no infirmity in the impugned order of the Commissioner of Income-tax (Appeals) on this issue. The assessment having been preceded by a valid notice under section 143(2) issued by the jurisdictional Assessing Officer within limitation, the absence of a fresh notice by the transferee Assessing Officer does not render the assessment invalid. 6.11 The ground No. 1 of the appeal of the assessee is accordingly dismissed. 7. In Ground No. 2, the assessee challenges the action of the learned Commissioner of Income-tax (Appeals) in not granting full relief in respect of the claimed loss of Rs. 1,84,86,824/- arising from reversal of sales in its real estate project at Mahalaxmi. 7.1 During the course of assessment proceedings, the Assessing Officer noted that the assessee had claimed a deduction of Rs. 1,84,86,824/- under the head "Other Allowances" in re....
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....ted Rs. 6,39,00,000 to the sale of Project Sea Vista Ledger. Against this, an amount of Rs. 1,00,35,000 is debited as sales returns due to flat cancellations by two parties: Meenal Amit Israni with Rs. 95,85,000 and Madhav Desai with Rs. 4,50,000. The net sale as of 31/03/2012, based on the closing balance, was Rs. 5,38,65,000. Further verification of individual ledger accounts submitted by the appellant, namely those of Ashwini Pathak, Meenal Amit Israni, and Ruthai International, revealed that the reversal of sale was accounted for on 10th May 2012 for Rs. 67,50,000 in the case of Ashwini Pathak and on 31/03/2014 for Rs. 93,00,000 in the case of Ruthai International. These reversals of sales are duly reflected in the Project Sea Vista Ledger account on the aforementioned dates. These facts clearly indicate that the reversals of sales for Ashwini Pathak and Ruthai International were carried out in subsequent years, which are not relevant for the assessment year 2012-13 under consideration. However, among the three parties for whom the sale reversal was claimed by the appellant, the reversal of Rs. 95,85,000 for Meenal Amit Israni was made on 31/03/2012, which is ....