Re-assessment Order framed without Issuance of Notice u/s 143(2) of Income Tax Act is Invalid: ITAT [Read Order]

The Mumbai bench of Income Tax Appellate Tribunal (ITAT) has recently held that re-assessment order framed without issuance of notice under Section 143(2) of Income Tax Act, 1961 is invalid.

Assessee Rameshkumar Tagraji Jain Had filed his return of income for both Assessment years 2010-11 and 2011-12 u/s 139(1) of the Act; and later on the case of the assessee was reopened for both AY’s by issuance of the notice under Section 148 of the Income Tax Act, 1961.

Pursuant to receipt of notice under Section 148 of the Income Tax Act, the assessee had requested the AO to treat the original return filed as return filed in response to the notice under section 148 of the Income Tax Act.

The legal issue raised by the assessee is that after reopening the assessment under Section 147 of Act, the AO ought to have issued the mandatory notice under section 143(2) of the  Income Tax Act, 1961 before framing the assessment under section 143(3)/147 of the  Income Tax Act, 1961 .

When an appeal was filed before the CIT(A) they confirmed the order of the AO. Further, the aggrieved assessee filed a second appeal before the tribunal.

Counsel for the assessee submitted that the re-assessment order framed by the AO after reopening the assessment was bad in law for the omission on the part of AO not to have issued the mandatory notice under Section 143(2) of the Income Tax Act.

Counsel for the revenue contented that assesee didn’t deliberate on this legal issue before CIT(A).

It was observed that AO had not made any mention of issuance/serving of notice under Section 143(2) of the Income Tax Act on the assessee before framing of re-assessment order.

Moreover the tribunal considered that the assessee has raised this legal issue before the CIT(A) and challenged the validity of reassessment orders framed under Section 143(3)/147 of the Income Tax Act without issuance of mandatory notice under Section 143(2) of the Income Tax Act.

After pursuance of the above observation, Aby T. Varkey, (Judicial Member) set-aside the impugned order of CIT(A) and restored the appeal back to his file with a direction to examine the re-assessment records and record a finding of fact as to whether the AO during the re-assessment proceedings had issued/served the notice /issued/served the notice under Section 143(2) of the  Income Tax Act on assessee before he framed the reassessment order under Section 143(3)/147 of the Income Tax Act.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates