Reassessment Order under Sec 143(3) rws 147 without Notice is Invalid: ITAT [Read Order]

In a recent decision in Prakash Rameshbhai Nanda vs Income Tax Officer, Rajkot bench of Income Tax Appellate Tribunal (ITAT) recently held that reassessment order under Section 143(3) read with Section 147 of the Income Tax Act 1961 without notice is invalid.

The assessee is an individual in the present case duly filed his return of income for the relevant assessment year and the assessment was completed accordingly.

Thereafter the Assessing Officer (AO) noticed that the Assessee has made a deposit with ICICI bank amounting to Rs.15,45,135 but the Assessee does not shown the source of the fund and the same was escaped from his returns. Consequently, the AO added the same to the income of the Assessee through a reassessment.

Counsel for the Assessee Advocate Chetan L.Agrawal submitted that the case was reopened the case under section 147 by the issuance of notice under section 148 of the Act. He submitted the assessment order and pointed out that there is no reference to the issuance of notice under section 143(2) of the Act while initiating reassessment proceedings in consequence of such notice issued under s.148 of the Act. He further submitted that the assessment finalized under s.143(3) r.w.s.147 is not sustainable in the absence of fulfilment of the mandatory requirement of issuance of notice under s.143(2) of the Act, and also challenged the validity of the reassessment order.

After analyzing the above narrated facts and circumstances deeply, the Tribunal bench consists of Judicial Member S.S.Godara and Accountant Member Pradip Kumar Kedia observed that “the assessee in the present case has claimed that no notice under s.143(2) of the Act has been issued to the assessee to enable the revenue to frame the reassessment order under s.143(3) rws 147 of the Act. In such circumstances, there cannot be found any reference to the issuance of such notice under s.143(2) of the Act either in the reassessment order or in the order-sheet maintained by the AO listing the sequence of events. The revenue could not bring anything to contradict the allegation of non-issuance of notice”.

The division bench further held that “the reassessment order passed under s.143(3) r.w.s.147 of the Act is without authority of law and thus requires to be quashed. Consequently, additional ground raised by the assessee challenging the validity of the reassessment order is allowed”.

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