The Income Tax Appellate Tribunal ( ITAT ), Indore Bench, has recently in an appeal filed before it, held that the issuance of notice u/s 143(2), should be within the statutorily prescribed time limit.
The aforesaid observation was made by the Indore ITAT, when appeals and Cross Objections were filed by the Revenue as well as the assessee, as against the order dated 07.09.2020 passed by the Commissioner of Income Tax (Appeals), Bhopal, arising out of the order dated 29.12.2016, passed by the DCIT, Bhopal, under section 143(3) of the Income Tax Act, 1961,for the Assessment Year 2014-15.
The contention of the assessee as submitted by Shri S. N. Agrawal, the A.R.,was that the asessee having filed his return of income on 22.11.2014, the time limit of service of notice under Section 143(2) of the Income Tax Act within 6 months from the end of financial year in which return was furnished, was by 30th September, 2015.
However, the notice under Section 143(2) of the Income Tax Act, was issued on 01.09.2016 and the same served upon the assessee on 28.11.2016, whereupon the assessee filed his objection challenging the issuance of the service of the notices upon him on 28.11.2016 before the.AO, but without any result.
This objection was further raised before the Commissioner of Income Tax (Appeals) and a remand report dated 09.01.2018 was called for. However, the said ground raised by the assessee was found to be not acceptable, hence, rejected.
With the AR further contending that the proof of service of notice under Section 143(2) of the Income Tax Act was not provided to the assesse in spite of repeated requests made to the department authorities below, he drew the attention of the ITAT towards page No.59 of the paper book filed before the ITAT Bench, which was nothing but the copy of the notice issued under Section 143(2) of the Income Tax Act, dated 01.09.2016. And it appeared on the said notice that the assessee was directed to produce any evidence in support of his case on 08.09.2016 at 11:00 am. in the Memo by F.No.DCIT-5(1)/BPL/u/s 142(1)/16-17.
The submission made by the Counsel appearing for the assessee being strengthened by the contents of the said notice dated 01.09.2016, issued under Section 143(2) of the Income Tax Act, he prayed for the quashing of the order passed by the authorities below, while also extending his prayer before the ITAT , to rely upon the judgment passed by the Delhi High Court in case of Alpine Electronics Asia Pvt. Ltd. vs Director General Of Income Tax & Ors, as well as that of the Karnataka High Court in case of M/s. Pai Vinod vs. DCIT. And with Shri Ashish Porwal, Sr.D.R. for the Revenue failing to controvert the submission made by the AR, the ITAT Bench consisting of Bhagirath MalBiyani, the Accountant Member, along with Madhumita Roy, the Judicial Member, observed as follows :
“We have heard the Ld. Counsel appearing for parties, and have also considered the relevant materials and both judgments available on record. It is beyond doubt that the issuance of notice under Section 143(2) of the Income Tax Act was not within time prescribed under the statute.”
“On this aspect, we have further relied upon the judgment in case of Alpine Electronics Asia Pvt. Ltd., wherein it has been held that the service of notice under Section143(2) of the Act within the statutory time limit is mandatory one and not a procedural requirement.”, the ITAT Bench added.
Thus, allowing the assessee’s cross Objection, while dismissing the Revenue’s appeal, the IndoreITAT held:
“Under these circumstances, since, there is admittedly a violation of mandatory provision, the assessment order passed was found to be illegal and liable to be set aside. In that view of the matter, respectfully relying upon the same, we find that the issuance of notice and the service of the same is beyond time as prescribed under the statutory provision and the proceeding, therefore, itself became void-ab-initio and hence quashed.”
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