Invalid Notice issued prior to Filing of ITR: ITAT quashes Assessment order [Read Order]

The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the assessment order after finding that the notice issued by the Income Tax Department was invalid and which was filed prior to filing the Income Tax Return.

The Assessee Mideast Integrated Steels Ltd. is a resident corporate entity stated to be engaged in the business of manufacturing pig iron and mining of iron ore. After filing the return of the income assessee's case was selected for scrutiny. After making the certain addition AO passed the assessment order.

Aggrieved by the order the assessee filed another appeal before the CIT(A), who dismissed the appeal of the assessee. Accordingly, the assessee filed another appeal before the tribunal.

Salil Aggarwal, the counsel for the assessee submitted that the notice issued under section 143(2) of the Income Tax Act is invalid, as it was issued before the filing of return of income by the assessee. Hence He submitted, that assumption of jurisdiction to make assessment under section 143(3) of the Act is entirely based on the notice issued under section 143(2) of the Act and any invalidity in the notice under section 143(2) of the Act would affect the assumption of jurisdiction to make an assessment.

Subhra Jyoti Chakraborty,counsel for revenue, supported the order of assessing officers and argued that notice under section 143(2) of the Act was issued and served on the assessee prior to filing of return, however, it is a fact on record that the assessee has fully participated in the assessment proceedings. Therefore, infirmity, if any, in the notice issued under section 143(2) of the Act, would get cured in terms of section 292BB of the Income Tax Act.

The tribunal observed that the assessee had filed its return of income on 26.12.2016. Whereas, as per the observations of the Assessing Officer in the body of the assessment order, notice under section 143(2) of the Act was issued to the assessee on 23.09.2015. Thus, it is established on record that notice under section 143(2) of the Income Tax Act was issued and served on the assessee prior to the filing of the return of income by the assessee.

Hence the notice under section 143(2) of the Act was not in accordance with the provisions of the Act, as, it was not based on any return of income filed by the assessee.

After reviewing the facts the ITAT bench of Saktijit Dey, ( Vice President )and Naveen Chandra (Accountant Member) held that the notice issued under section 143(2) of the Act is invalid. Thus the bench quashed the assessment order.

To Read the full text of the Order CLICK HERE

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