Assessment without issuance of Notice U/s 143(2) is void ab-initio: ITAT quashes Assessment Order [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench while quashing the Assessment Order reiterated that the assessment without issuance of notice under section 143(2) is void ab-initio.

The assessee, M/s. Cosmat Traders Pvt. Ltd. is a company and is in the business of share transactions and investments. It filed its return of income for the impugned Assessment Year declaring total income of Rs.38,220/-. Notice under section 143(2) of the Act was issued to the assessee by the Income Tax Officer (ITO), the assessee filed a letter objecting to the notice given under section 143(2) of the Act, on the ground that this officer does not hold jurisdiction over the assessee.

Thereafter, the Commissioner of Income Tax passed an order under section 120 of the Act, transferring the jurisdiction of the assessee to the file of Tax Recovery Officer (TRO). Thereafter, the TRO, Kolkata, passed an order under section 144 of the Act, determining the total income of the assessee at Rs. 5,02,98,220/-.

Mr. Miraj D. Shah, the Counsel for the assessee, submitted that, under the original grounds, the issue has to be restored to the file of the Assessing Officer for the reason that there was violation of principles of natural justice. He pointed out that notice of hearing was not received by the assessee from the Assessing Officer and only when it received penalty notice under section 271(1)(c) of the Act, it came to know about the ex-parte orders. He also pointed out that the CIT(A) has not disposed of the case on merits.

Additionally Mr. Shah submitted that the assessee is challenging the jurisdiction of the Assessing Officer to issue notice under section 143(2) of the Act and alternatively, the jurisdiction of the Assessing Officer, who has completed the assessment under section 144 of the Act. He submitted that the jurisdictional issues go to the root of the matter and has no facts need be enquired into, the legal grounds may be admitted by the ITAT.

The coram of Aby T. Varkey and J. Sudhakar Reddy ruled that the passing of assessment order under section 144 of the Act, without issuing notice under section 143(2) of the Act, by the Assessing Officer having jurisdiction over this assessee, is bad in law and has to be quashed.

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