The Income Tax Appellate Tribunal (ITAT) Delhi Bench ruled that issue of notice under Section 143(2) of Income Tax Act, 1961 is mandatory requirement for framing reassessment order. Therefore which was not curable as per Section 292BB of Income Tax Act.
The assessee Classic Display Systems Pvt. Ltd, filed the appeal against the order of commissioner of Income Tax Appeals [CIT(A)].
The assessee challenged the reassessment order passed by the Assessing Officer without issuing notice under Section 143(2) of Income Tax Act.
During the appeallate proceedings, the counsel for the assessee, Salil Kapoor, argued that the Assessing Officer (AO) has no valid jurisdiction for framing the reassessment order.
Moreover, the AO without issuing notice under Section 143(2) of Income Tax Act framed the assessment order.
On contrary, the counsel for the assessee submitted that copies of the notice under Section 143(2) of the Income Tax Act have not been found in the relevant assessment records and such defects are not curable under Section 292BB of the Income Tax Act.
It was observed by the tribunal that a copy of notice under Section 143(2) of the Income Tax Act was not found in the relevant assessment records.
Further, relied upon the decision of PCIT Vs. Silver Line tribunal observed that “merely because the assessee participated in proceedings pursuant to notice under Section 148 of the Income Tax Act, it would not obviate mandatory requirement AO to issue assessee a notice under Section 143(2) of the Income Tax Act before finalizing order of reassessment”.
It was also found that provision of section 292BB of the Income Tax Act would apply with regard to failure of service of notice and not with regard to failure of issue of notice.
Therefore, failure of AO in reassessment proceedings to issue notice under Section 143(2) of the Income Tax Act prior to finalizing the reassessment order cannot be condoned by referring to the provision of section 292BB of the Income Tax Act.
After reviewing the facts and submissions of the both parties, a single member bench of C.M. Garg, (Judicial Member) quashed the reassessment order.
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