Assessment without giving Notice is bad in Law: ITAT

The Income Tax Appellate Tribunal (ITAT) held that assessment framed by the Income Tax Officer (ITO)  without giving notice is bad in law.

The assessee filed the return of income for the assessment year 2013- 2014. The return was processed under Section 143(1) of the Income Tax Act. Subsequently, notice under Section 143(2) of the Act was issued and served on the assessee by the Assessing Officer. In view of the change of jurisdiction, notice under Section 142(1) read with Section 129 of the Act was issued and the same was served on the assessee by the Assessing Officer, requiring the assessee to produce the details of profit and loss account, balance sheet, business activities, books of account, ledger extract and details of bills or vouchers, additions made to fixed deposits for the financial year 2012-2013 relevant to the assessment year 2013-2014.

Thereafter, the assessment was completed under Section 143(3) of the Act. The assessee went in appeal before the CIT(A) challenging that there was no proper notice issued under Section 143(2) of the Act. The CIT(A) observed that perusal of records shows notice under Section 143(2) was issued by ITO. It is noted that although the assessment order was passed by ITO due to the transfer of cash under Section 129, original notice under Section 143(2) was to be treated as valid notice and the assessment was valid. Against this appeal, the assessee appealed in the tribunal.

The tribunal consisting of Vice President N. V. Vasudevan and an accountant member Chandra Poojari held that the assessment framed by the Income Tax Officer (ITO)  without giving notice is bad in law.

“The ITO has never issued any notice under Section 143(2) of the Act to the assessee. Since there was no notice under Section 143(2) of the Act issued by the Assessing Officer, the assessment framed consequently is bad in law. In our opinion, the assessment framed by the ITO, Bangalore is not in order on the simple reason that this was framed without giving notice under Section 143(2) of the Act,” the tribunal observed.