Issue of Non-Service of Notice u/s Sec 143 Requires New Examination: ITAT Remands ₹53 Lakh Addition To AO For Fresh Adjudication [Read Order]
ITAT Mumbai remands ₹53 lakh addition as non-service of mandatory Section 143(2) notice and jurisdictional assessment errors occurs.
The Income Tax AppellateTribunal (ITAT) Mumbai Bench has set aside an earlier order of appeal and held that the lower authorities had failed to consider any jurisdictional issues and had denied a fair opportunity to the assessee to put forth their case particularly in relation to an addition of ₹53,00,000 under Section 68 of the Income TaxAct.
The dispute arises out of a filing made by the assessee for assessment year 2014-15 in which the appellant-assessee, Nova Elevators Pvt. Ltd. had shown nil income. The case was later reopened under Section 147 and a reassessment order was passed on December 31, 2018, adding ₹53 lakh to the income of the company on account of unexplained cash credits.
Then, the matter was later heard before the Commissioner of Income Tax (Appeals) where the appeal was rejected for lack of prosecution as no one appeared on behalf of the company.
However, the assessee has raised various additional grounds that challenged the very legality of the proceedings. One of the main grounds was that the mandatory jurisdictional notice under Section 143(2) has not been served.
Further, the assessee submitted that the notice was only uploaded on the portal and sent via email late at night on a Friday with a hearing scheduled for the very next working day which was nothing but a mere technical formality at the end of the limitation period.
The Bench, consisting of Anikesh Banerjee (Judicial Member) and Makarand Vasant Mahadeokar (Accountant Member), held that the jurisdictional matters in question, especially the absence of valid service of notice, served as the root of the matter.
Therefore, the Tribunal held that the revenue department had failed to provide adequate facts to decline these allegations.The ITAT allowed the additional grounds of appeal and restored the entire case to the file of the Assessing Officer. The AO has been asked to pass a speaking order after giving the assessee a reasonable opportunity to be heard and to produce evidence.Accordingly, the appeal wasallowed.
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