Assessment Order without Issuing proper Notice: ITAT quashes Assessment Order and Addition [Read Order]

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) quashed the assessment order and addition of income due to the invalid notice issued by assessing officer.

M/r Ballu Singh, the Appellant Assessee argued that the Commissioner of Income Tax (Appeals) has erred in confirming the reopening of the assessment proceedings under Section 148 of the Income Tax Act  1961 as a valid proceedings, failing to appreciate that notice under Section 143(2) of the Income Tax Act was neither issued nor served on the assessee, and upholding the addition of  income under Section 69A of the Income Tax Act 1961.

The assessee appealed against the  Assessing Officer’s decision to assess the assessee's income under Section 147 of the Income Tax Act, 1961. The AO had information regarding cash deposited in his bank account and treated it as unexplained income.

The Appellant-Assessee appealed against the addition of undisclosed income under Section 69A of the Income Tax Act, which was arbitrary and ignoring jurisdiction, reasons, submission of assessee, and other evidences.

It was also submitted that the notice issued by non-jurisdictional AO is invalid and the assessment made without issue of fresh notice under section 148 is non established in law.

The counsel for the assessee contended that the notice was ready even prior to the filing of the return.The assessee submitted that notice under Section 143(2) issued at the same time and date of return filing under Section 148 of the Income Tax Act invalidates the entire exercise and all subsequent proceedings are held to be invalid.

The tribunal observed that the assessment order passed by the AO was based on invalid notice. The  Tribunal held that the notice issued under Section 148 of the Income Tax Act by the Assessing Authority who was not vested with the requisite jurisdiction and in that event, issuance of such notice is ab-initio void in the eyes of law and liable to be quashed.

A single member bench comprising of Sri. Kul Bharat (Judicial) held that the based on various decisions of High courts and Supreme Courts, the issuance of notice under Section 148 of the Income Tax Act was bad in law and without jurisdiction, and that the impugned assessment has been framed in violation of natural justice.

The tribunal bench also deleted the addition of unexplained income passed by assessing officer due to non-justification while making the addition.

The Tribunal allowed both the Appeals filed by the Assessee.

To Read the full text of the Order CLICK HERE

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