ACIT, CENTRAL CIRCLE-28, NEW DELHI vs. TEHRI PULP & PAPER LTD, MUZAFFARNAGAR

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

2. Grounds of appeal taken by the Revenue read as under :-

“1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has failed to appreciate the fact that as per section 139(1) of the I.T. Act 1961 return was required to be filed in prescribed form and verified in the prescribed manner setting forth such other particulars as may be prescribed. 2. Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred on facts in holding the proceedings u/s 147 of the Act as illegal, bad in law and invalid without appreciating the fact that return was not filed by the assessee in response to notice 148 dated 27.03.2014 or the notices issued u/s 142(1) dated 21.05.2014 & 27.03.2014 instead of filing a single letter by the counsel of the assessee Sh. Dinesh Mohan for treating the return originally filed u/s 139(1) in response to notice u/s 148 of the Act.

3. Whether on the facts and in the circumstances of the case, Ld. CIT (A) has failed to appreciate the fact that counsel of the assessee through POA (power of attorney) was authorized to plead the case for various purposes like sign, file verify and present pleadings, appeals, cross- objections, petitions review, restoration, withdrawal, certificate, statement of accounts, income tax, wealth tax books of accounts or such other documents before the assessing officer and not for signing the documents related to filing of return of income.

5. Whether on the facts and in the circumstances of the case, Ld. CIT (A) has failed to appreciate the fact that during the entire assessment proceedings completed u/s 147 of the Act, assessee has not contended before the assessing office for not issuing the notice u/s 143(2) of the I.T Act 1961.

7. Whether the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.

8. Whether grounds of appeal are without prejudice to each other.”

3. Although Revenue has raised various grounds, the main ground revolves around ld. CIT (A)’s finding that in absence of service of notice under section 143 (2), the assessment is void.

4. In this regard, ld. CIT (A) has elaborately dealt with the issue. On page 25 of the ld. CIT (A)’s order, there is AO’s remand report in which AO mentioned that notice u/s 143 (2) could not be found. Further, elaborating this aspect, ld. CIT (A) has relied upon the decision of Hon’ble Delhi High Court in the case of PCIT vs. Sh. Jai Shiv Shankar Traders Pvt. Ltd. 2015-TIOL-2477-HC-Del. and held that the assessment order passed by the AO is invalid. We may gainfully refer to the order of ld. CIT (A) in this regard as under :-

“ The appellant has raised a ground that the Assessing Officer did not issue notice u/s 143 (2) in the case which was mandatory, accordingly the assessment order passed by the AO dated 31.03.2015 becomes illegal, bad in law and without justification. The appellant has submitted affidavits from the Director of Company Sh. Sachin Aggarwal affirming the above fact. The comments of the Assessing Officer was received vide letter dated 11.05.2022 which is reproduced above in para 8. The Assessing Officer has stated in his remand report that no notice u/s. 143(2) was found in the assessment records. On perusal of Assessment Order it has been noticed that the Assessing Officer has also not mentioned the fact regarding the issuance of notice u/s 143(2) in this case. The appellant relied upon plethora of decisions of Hon'ble Courts in which it has been held that the issuance of notice u/s. 143(2) is mandatory before issuance of the order of reassessment and that the participation of assessee in the proceeding u/s. 143/147 does not obviate the requirement of issuance of notice u/s. 143(2). In this case, there is no notice u/s. 143(2) on records nor there is any mention of the issue of notice u/s. 143(2) in the Assessment Order. In view of the above facts, it has been noted that the order u/s. 144/147 dated 31.03.2015 cannot be held legally valid in absence of issue of notice u/s. 143(2). Reliance is placed on the decision of Hon'ble ITAT in the case of ACIT Vs P&R Infraprojects Ltd., dt. 07/01/2022 (Hon'ble ITAT Delhi), in which the Hon 'ble IT AT has held as under: 1. "The assessee has challenged the validity of assessment order in absence of issue of notice u/s.143(2) of the IT Act. A perusal of assessment order as well as the order of the CIT(A) shows that no notice u/s. 143(2) was ever issued to the assessee before completing the assessment u/s. 143(3) /147 even in reassessment proceedings and non-issuance of the same makes the assessment order illegal and null.

6. Ld. Counsel for the assessee reiterated the submissions made before the ld. CIT (A) and pointed out that in the remand report, the AO has accepted that no notice has been issued u/s 143 (2) of the Act.

Furthermore, the decision relied upon of Hon’ble Delhi High Court in the case of Sh. Jai Shiv Shankar Traders Pvt. Ltd. (supra) is squarely applicable on the facts of the case. He, therefore, pleaded to uphold the order of ld. CIT (A).