The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) ruled that non-issuance and non-service of notice under section 143(2) of Income Tax Act,1961, renders reassessment order null and void.

Pravinbhai Jethabhai Patel,appellant-assessee,was engaged in agriculture. He did not file his income tax return as his income was below taxable limits. The Assessing Officer(AO) found cash deposits of Rs. 25,69,000 and term deposits of Rs. 30,00,000 in his bank during FY 2010-11.

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The case was reopened under section 147, and a notice was issued in March 2018. The assessee filed his return declaring income of Rs. 75,844. He said he sold agricultural land with co-owners for Rs. 83,34,500. His share was Rs. 41,67,250, of which Rs. 4,88,250 was received by cheque and Rs. 36,79,000 in cash.

The AO held that since the sale deed showed only Rs. 4,88,250, the cash amount was unexplained and taxed it under section 56(2)(vii)(a). The Commissioner of Income Tax(Appeals) {CIT(A)] confirmed the addition of Rs. 36,29,000 after allowing Rs. 50,000 as standard deduction.

The assessee appealed to the tribunal against this order.

The assessee counsel argued that no valid notice under section 143(2) was given before passing the reassessment order under section 147. He said the AO mentioned sending a notice dated 11.07.2018, but there was no proof of it on record or on the e-filing portal.

Despite repeated requests, the assessee was not given a copy. The counsel relied on Supreme Court and High Court rulings that said issuing a notice under section 143(2) is mandatory in reassessment cases.

The Departmental counsel did not challenge these legal points and only relied on earlier orders

The two member bench comprising Dr.B.R.R Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) heard both sides and reviewed the records. It was found that the Department did not prove that the notice under section 143(2) dated 11.07.2018 was served to the assessee. The notice was not found on the ITBA or e-filing portal, and the appellant’s requests for it were ignored.

Following Supreme Court and High Court rulings, the appellate tribunal held that the non-issuance and non-service of the notice under section 143(2) rendered the reassessment order null and void. The Department was allowed to come back with proof of the notice. Since the reassessment was invalid, other issues were not decided.

Accordingly the appeal of the assessee was allowed.

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