The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the re-assessment without issuance of notice under Section 143(2) of the Income Tax Act 1961 was void.
The assessee, Gonuguntla Nirmala Devi was an individual and filed her return for the assessment year 2012-13 on 30/03/2014 declaring an income and the same was processed under Section 143(1) of the Income Tax Act. Subsequently, basing on certain information, the case was sought to be reopened under Section 147 of the Income Tax Act by issuing a notice under Section 148 of the Income Tax Act.
The Assessing Officer recorded that in spite of issuance of notice on 28/03/2019 which was served on the assessee, the assessee did not respond to the same. Another notice dated 12/04/2019 calling for details was issued and it was served on the assessee on 13/06/2019. But still the assessee did not respond. Date of hearing was fixed on 06/11/2019 and such notice was served on the assessee on 25/10/2019, but still the assessee did not appear.
Finally, assessee responded to the notice dated 29/11/2019 fixing the date of hearing on
05/12/2019. The Assessing Officer completed the assessment and by order dated 24/12/2019 passed under Section 143(3) read with Section 147 of the Income Tax Act, and determined the income of the assessee.
R. Venkataraman, on behalf of the assessee submitted that issuance of notice under Section 143(2) of the Income Tax Act was necessary when the assessee filed response to the notice
issued under Section 148 of the Income Tax Act, stating that the original return may be treated as a return filed in response to the notice under Section 148 of the Income Tax Act.
He further submitted that the assessee filed the return of income in response to the notice under Section 148 of the Income Tax Act and, therefore, for want of issuance of notice under Section 143(2) of the Act, the assessment was bad under law.
He further submitted that the decision of the Apex Court in the case of ACIT vs. Hotel Blue Moon and the decisions of the various High Courts apart from other decisions, was to the effect that in case of proceedings initiated in section 143(3) read with section 147 of the Act, requirement to issue notice under Section 143(2) of the Income Tax Act was mandatory and such a defect could not be cured by Section 292BB of the Income TaxAct.
Sheetal Sarin, on behalf of the revenue submitted that the assessee did not file any return of
income or any request to treat the original return of income as the return filed in response to the notice under Section 148 of the Income Tax Act, but it was only at a later point of time, namely, assessee filed online the return of income and submitted a letter to treat the return of income filed on the earlier day as the return of income submitted pursuant to the notice under Section 148 of the Income Tax Act.
The two-member Bench of Ramakanta Panda, (Vice President) and K.Narasimha Chary, (Judicial Member)dismissed the appeal filed by the assessee holding that , “In this case, it’s not the case of the assessee that there was any assessment under section 143(3) or section 147 of the Act earlier. Then the case of the assessee falls not under section 151(1), but it falls under section 151(2) of the Act, in which case the satisfaction of the Joint Commissioner is sufficient. Assessee has no good case on this point.”
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