The Delhi Income Tax Appellate Tribunal (ITAT) has recently held that the defect of issue of section 143(2) notice prior to conclusion of reassessment proceedings is not curable for invoking section 292BB of Income Tax Act 1961.
Section 292BB of the Income Tax Act 1961 states that if in certain circumstances notice was not served or timely not served or improperly served such case as per the above section proceedings can initiated by the assessing officer
S A Syncon Infrastructure Services Pvt. Ltd is a company who filed the return of their income electronically and further the assessing officer noted that notice under section 148 of the Income Tax Act 1961 was issued on 31.03.2016 after recording reasons. After the scrutiny the total income was calculated. Against the order passed by the assessing officer assessee filed an appeal before the ITAT.
Prajnaraj Mohanty counsel for the assessee submits that Notice under section 143(2) of Income Tax Act 1961 was not issued and served on the assessee. He submitted that the issuance of notice as per the above section is a mandatory requirement and the non issuance of notice would result in the assessment order being void-ab-initio.
Further Section 292BB of the Act did not give the power to condone the failure or delay in issuing the statutory notice required to be issued under section 143(2) of the Income Tax Act 1961.
B. M. Singh, counsel for the revenue admitted that the notice under section 143(2) of the Income Tax Act 1961 was not issued and served on the assessee. But non service of notice under section 143(2) of the Income Tax Act 1961 was a curable defect under section 292BB of the Income Tax Act 1961.
After considering the contentions of the both the parties the division bench of the ITAT comprising Anil Chaturvedi, (Accountant Member) and narender Kumar Choudhry, (Judicial Member) allowed the appeal filed by the assessee and observed that,
“Failure of the assessing officer, in reassessment proceedings, to issue notice under section 143(2) of the Income Tax Act 1961 prior to the finalizing the reassessment order could not be condoned by referring to the Section 292BB of the Income Tax Act 1961”.
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