The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, has recently, in an appeal filed before it, quashed an order passed u/s 143(3) by the AO, as the same was passed without issuing the mandatory notice u/s 143(2).
The aforesaid observation was made by the Chandigarh ITAT, when an appeal was preferred before it by the assessee, as against the order dated 15.06.2022, of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.
The ground of the assessee’s appeal being that the CIT(A) has erred in upholding the assessment order passed by the Assessing Officer without issuance of notice u/s 143(2) of the Income Tax Act, 1961 which was mandatory requirement, Shri Sudhir Sehgal, the counsel for the assessee , invited the ITAT’s attention to page 81 of the paper book which was a copy of the information received under RTI Act from the Income-tax Department wherein, the Income Tax Officer, Ward-1, Cum-CPIO, Jagraon vide letter dated 2.9.2021 had informed that as per record, a return of income for assessment year 2012-13 was submitted manually by the Assessee on 17.12.2019 and that no notice u/s 143(2) of the Act was issued in this case.
The counsel for the assessee also invited the ITAT’s attention to the paper book pages 1 to 21 which were copies of various notices issued for verification of the financial transactions, for requisition of information, notice u/s 148 of the Act etc. to submit that the address mentioned in the said notices was incomplete.
He further submitted that the address in the aforesaid notice was insufficient, thereby inviting the ITAT’s attention to the copies of the postal / registered envelope, which were received back by the Department as un-served with the remarks “short address” or “incomplete Address.
He also sought the ITAT’s attention to the paper book page 22 to submit that the only the notice received by the Assessee in this behalf was dated 12.12.2019 issued u/s 142(1) of the Act, whereby, the Assessee was called upon to prepare and file the true and correct return of income, in pursuance of which, the Assessee filed the return of income, adding that the assessment order thus reveals that the AO thereafter, proceeded to frame the assessment on the basis of the return filed by the Assessee along with the relevant documents without issuing any notice u/s 143(2) of the Income Tax Act, and that this case no notices ever was issued u/s 143(2) of the Act by the AO to the Assessee.
On the other hand, Shri M.P. Dwivedi, the Sr.DR, strongly supported the Revenue
Hearing the opposing contentions of both sides, as well as perusing the materials available on record, the Chandigarh ITAT observed:
“It has now been settled position of law that issuance of notice u/s 143(2) of the Act is mandatory for the AO to proceed with the assessment u/s 143(3) of the Act, even in cases pertaining to the reopening of the assessment u/s 147 of the Income-tax Act. Reliance in this respect can be placed on the decision of the Hon’ble Supreme Court in ‘Hotel Blue moon (2010) 3 SCC 259, wherein, the Hon’ble Supreme Court has held that the omission on the part of the AO to issue notice u/s 143(2) of the Act cannot be said to be a procedural irregularity and the same is not curable and, therefore, the requirement of notice u/s 143(2) of the Act cannot be dispensed with.”
“Further, reliance can be placed on the decision of the Hon’ble Supreme Court in the case of CIT Vs. Laxman Das Khandelwal”, a coram of Vikram Singh Yadav, the Accountant Member, along with Sanjay Garg, the Judicial Member added.
Finally, the Chandigarh ITAT held:
“Respectfully following the proposition of the law laid down in these orders stated above, we hold that the assessment order is bad in law for the reason that the assessing authority passed the order u/s 143(3) of the Act without issuing mandatory notice u/s 143(2) of the Act. Accordingly, the assessment order is, hereby, quashed. In the result, the appeal is allowed.”
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