Omission to serve Notice u/s 143(2) of Income Tax Act is not a Curable Defect: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Bangalore bench, while deleting an assessment order held that the omission to serve a notice under section 143(2) of the Income Tax Act, 1961 is not a curable defect for the purpose of applying the provisions of section 292BB of the Act.

The assessee, a partnership firm engaged in the business of real estate, filed its income tax return for the year under consideration declaring taxable income @ Nil (loss of Rs. 26,83,80,898/-. A search and seizure operation under section 132 was conducted in case of Shri Dayananda Pai and group on 12.04.2011 where the office premises of assessee was also covered. In response the notice under section 142(1) dated 30.07.2013, the assessee filed its letter dated 20.09.2013 submitted copy of the return filed on 31.07.2012.

Before the Tribunal, the assessee submitted that 143(2) notice was issued to assessee on 17.10.2013 which is beyond the due date and therefore the assessment order passed is without jurisdiction.

While accepting the above argument, the Tribunal bench comprising Accountant Member Mr. B R Bhaskaran and the Judicial Member Ms. Beena Pillai held that section 292BB of the Act contemplates  situations of irregularities  wherein the notice has  been  served to  the  assessee in time  and in accordance  with  the  provisions  of  this  Act.

“The present case  assessee has not received the notice under section 143(2) in time and therefore the argument raised by  revenue cannot be appreciated,” the bench said.

According to the bench, an omission on part of the Assessing Officer u/s. 143(2) cannot be procedural irregularity and the same is not curable.

“As the notice was not issued within the period of limitation, the empathetic statement of law in the absence of issuance of notice u/s. 143(2) within the period of limitation by the revenue would therefore inure to the benefit of the assessee,” it added.

While quashing the assessment, the Tribunal held that “the Statute make its imperative that notice u/s. 143(2) is to be issued within the period of limitation and any omission or failure would be hit at the root of the jurisdiction applying the principles laid down by the Hon’ble Supreme Court in various judgments. Accordingly, we hold the assessment order passed by the Ld.AO to be bad in law and the same is quashed.”

To Read the full text of the Order CLICK HERE

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