TaxTMI 
TaxTMI 
2026 (6) TMI 1033
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.... is nullity, bad-in-law and non-est, therefore, revisionary proceedings under section 263 cannot be carried out on the basis of such non-est assessment and the same deserves to be quashed" 3. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely coverd by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688, ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon'ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adj....
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....the assessee. But the same was never supplied to the assessee. accordingly to the assessee the notice u/s 143(2) was never issued. Therefore, the assessment framed by the AO sans notice u/s 143(2) of the Act is bad in law and nullity. The assessee has obtained information from the AO by filing RTI application and the ld. AO replied that the requisite information / details qua issuance of notice u/s 143(2) of the Act were not available in the records. We note that the assessee has asked for the notice issued u/s 143(2) of the Act and also responses against the notice u/s 133(6) of the Act in the RTI application. For the sake of ready refence, the RTI application and reply of the ld. AO are extracted below:- 7. Therefore, in our opinion the assessment framed by the ld. AO u/s 147/ 143(3) of the Act on 17.03.2021, is bad in law and nullity. The case of the assessee find support from the decisions of Hon'ble High Court in case of Principal Commissioner of Income-tax vs. Oberoi Hotels (P.) Ltd. [2018] 96 taxmann.com 104 (Calcutta)/[2018] 409 ITR 132 (Calcutta)[22-06-2018], wherein it has held as under:- "1. The Court - The substantial questions of law that have arisen ar....
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....the undisclosed income inferred by the authorities, there is no reason, why the authorities should issue notice under section 143(2). However, if an assessment is to be completed under section 143(3) read with section 158 BC, notice under section 143(2) should be issued within one year from the date of filing of block return. Omission on the part of the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under section 143(2) cannot be dispensed with ..." 4. It is evident that the dictum of the Supreme Court in Hotel Blue Moon is that a notice under Section 143(2) is mandatory if the return as filed is not accepted and an assessment order is to be made at variance with the return filed by the assessee. It is also evident that the issue is not limited to block assessment but would apply to every case where a notice under Section 143(2) of the Act is necessary. In the judgment and order of the Appellate Tribunal impugned herein dated May 14, 2015, the Tribunal noticed a judgment of this Court of April, 8, 2014 rendered in ITAT 149 of 2013 (CIT v. Humboldt Wedag India....
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....here it was held that a notice under Section 143(2) of the Act was mandatory and the judgment in Areva T & D India Ltd was not good law. 7. Section 148 of the Act permits the issuance of a notice in certain circumstances when it is discovered that income has escaped assessment and sub-section (1) thereof mandates a return to be filed upon an assessee being served a notice under such provision, whereupon "the provisions of this Act, shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139." 8. Section 143 of the Act pertains to assessment and in its opening words refers to a return being made under Section 139 of the Act or in response to a notice under Section 142 (1) of the Act. At the time relevant for the assessment that was undertaken by the Assessing Officer after a notice under Section 148 of the Act had been issued, Section 143(2) in its then form had two clauses and a proviso after Clause (ii) that precluded a notice under Clause (ii) being served beyond a particular period. Further, Section 153 (2) of the Act directs an order of assessment, reassessment or recomputation to be made under Section ....
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....ircumstances - 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 had raised such objection before the completion of such assessment or reassessment." 12. Even if the provision does not carry a non-obstante clause, since Section 292BB is a provision of general application, it would be applicable in all situations; but only in so far as it proclaims to operate. Section 292BB of the Act, read in the context of several provisions of the Act which mandatorily require notices to be issued in divers situations, cannot be said to have dispensed with the issuance of such....
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....f the view that the issue of invalidity can be raised in the collateral proceedings by the assessee even though the order concerned passed by the authorities have not been challenged before the appellate authority. The case of the assessee find support from the following decisions. In defense of his arguments, the ld. AR stated that the consequential proceedings would be invalid and the assessee can challenge the validity of the assessment framed in the co-lateral/consequential proceedings. The case of the assessee is squarely covered by the decisions of Hon'ble Calcutta High Court in case of Keshab Narayan Banerjee Vs. CIT [1999] 238 ITR 694 (Calcutta)/[1999] 156 CTR 109 (Calcutta) and M/s Classic Flour & Food Processing Pvt. Ltd. Vs. CIT, Kolkata in ITA no. 764 to 766/KOL/2024 vide order dated 05.04.2017, Concord Infra Projects Pvt. Ld. Vs. PCIT in ITA No. 174/KOL/2021 vide order dated 13.10.2024. In all the above decisions it has been held that the assessee is within its legitimate and lawful right to challenge the assessment framed u/s 147 of the Act even in the collateral proceeding as has been held in the aforesaid decisions. 10. In the result, the appeal of the assess....