AMAR CHEMICALS,DELHI vs. DCIT, CENTRAL CIRCLE 15 , DELHI
Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLEA.Y. : 2019-2020 AMAR CHEMICALS, 2140, TILAK BAZAR, KHARI BAOLI, DELHI – 110 006 (PAN: AAAFA8033B)
The Assessee has filed the present appeal against the impugned order dated 16.06.2025 passed by the Ld. Commissioner of Income Tax
(Appeals), Delhi -26 on as many as 10 grounds, however, Ld. AR has only argued the juri ictional ground viz. Ground No.1, which reads as under:-
“The Ld. CIT(A) failed to appreciate that issuing and serving the notice u/s. 143(2) of the Act is pre-requisite and juri ictional fact; and the assessment made, without issuing and serving the notice u/s. 143(2) of the Act, is null and void ab initio, invalid, untenable, illegal; and thereby erred in setting aside the assessment order dated 25.03.2025 passed u/s. 147 r.w.s. 144 of the Act for making fresh assessment, denovo.”
2. The facts emanate from the assessment order are that assessee is a partnership firm in the name of and style of M/s Amar Chemicals and is engaged in the business of trading of items used in worship like, Moly, Roly,
Red Lead, Camphor apart from this, firm is also engqged in the trading of 2
some chemicals used in cooking like Ajinomot, Satiric and Tatrick. The assessee filed its original return of income for the AY 2019-20 on 23.10.2019
declaring an income of Rs. 2,41,560/-. A survey u/s. 133A of the Act was conducted in the cases of M/s Chemical Agency and M/s Amar Chemical on 31.10.2018 at their business premises situated at 420, Katra Maidgran, Tilak
Bazar, Khari Baoli, Delhi and 2140, Tilak Bazar, Delhi by Deputy Director of Income Tax (Inv.), Unit-8(2), Delhi. Based on the information, notice u/s. 148
of the Act was issued to the assessee. Thereafter, assessment was compelted at an income of Rs. 7,41,464/-.
3. Aggrieved with the aforesaid order, assessee filed the Appeal before the Ld. CIT(A), who vide impugned order dated 16.06.2025 has partly allowed the appeal of the assessee by setting aside the assessment order for making fresh assessment de novo.
4. Against the aforesaid order passed by the Ld. CIT(A), assessee is in appeal before the Tribunal.
5. At the time of hearing Ld. Counsel of the assessee argued only on the issue involved in ground no. 1 relating to service of juri ictional notice u/s.
143(2) before exparte assessment framed u/s. 144 of the I.T. Act, 1961. He submitted that in this case assessee filed its return of income u/s. 139 on 23.10.2019 and notice u/s. 148 of the Act was issued on 30.03.2023. In response to notice dated 30.3.2023, assessee submitted its reply dated
31.03.2023 by stating that original return filed by the assessee on 23.10.2019
may kindly be treated as return filed in response to notice u/s. 148 of the Act, which was not controverted or disputed by the AO. On 27.2.2024, the asseseee submitted its further reply by reiterating the similar version as narrated in its earlier reply dated 31.3.2023, which was also not controverted or disputed by the AO. It was further submitted that in a case where a return of income was filed and thereafter, notice u/s. 148 of the Act was issued directing the assessee to file the return of income; the assessee, by way of a letter, can request that such earlier return of income be considered a return of income in response to notice u/s. 148 of the Act, and such return of income is a valid return of income. To support his view, Ld. AR relied upon the case law in the case of R.K. Gupta vs. ITO (2008) 115 ITD 384 (ITAT-Delhi); ITO v.
Malvika Arun Somaiya ITA No. 3041/Mum/2004 decided on 27.09.2007;
Tiwari Kanhaiya Lal vs. CIT (1985) 154 ITR 109 (Raj); Iqbal Singh Atwal vs.
CIT (1984) 147 ITR 599 (Cal); K.s. Ratnaswami vs. Addl. ITO (1963) 48 ITR
568 (Mad.). Ld. AR for the assessee further submitted that any assessment made, without issuing and serving the mandatory statutory notice u/s. 143(2) of the Act, is invalid, untenable and null and void ab initio by relying upon the decision of the Hon’ble Supreme Court in the case of CIT vs. Laxman Das
Khandelwal (2019) 417 ITR 325 (SC) and decision in the case of ACIT vs.
Hotel Blue Moon (2010) 321 ITR 362 (SC). It was further submitted that AO at page no. 2 of the assessment order vide para no. 2.3 observed that “statutory notice u/s. 143(2) of the Act could not be sent as the return of income did not file by the assessee in compliance to notice u/s. 148 of the Act.” And 4
thereafter, pasted the screen shot stating that, “You cannot generate notice u/s. 143(2) for this case as no return exists u/s. 148 for this PAN and AY”. In view of this, it was the contention of the Ld. AR that AO clearly shows that the he has treated the return income filed by way of a letter as a valid return of income in response to notice u/s. 148 of the Act and, therefore, was trying to generate the notice u/s. 143(2) of the Act, but could not generate the same.
Had the AO not considered the return of income, filed by way of a letter, as a valid return of income, the question of generating notice u/s. 143(2) of the Act would not have arisen. It was the further contention that AO, during the course of assessment proceedings did not confront the assessee with the situation of non-generation of the notice u/s. 143(2) of the Act. The screen shot, pasted by the AO is dated 23.3.2024, whereas the last date to issue the notice u/s. 143(2) of the Act has already lapsed/ expired on 30.6.2023. It was the further contention that in case the return of income is filed by way of a letter the notice u/s. 143(2) of the Act can be generated. In this regard, he filed a copy of copy of notice u/s. 143(2) dated 5.5.2023 placed at page no.
160 of the PB in the case of Himanshu Gupta, which clearly shows that where return of income in response to notice u/s. 148 was filed by way of letter the notice u/s. 143(2) of the Act can be generated. Hence, it was requested to hold that any notice under section 143(2) was not issued / served within limitation and to quash the assessment order. Per contra, Ld. DR relied upon the orders of the authorities below.
I have heard both the parties and perused the records. I find that in this case assessee filed its return of income u/s. 139 of the Act on 23.10.2019 and notice u/s. 148 of the Act was issued on 30.03.2023 vide DIN & Notice No. ITBA/AST/S/148_1/2022-23/1051648169(1) and in response thereof, assessee filed its reply dated 31.03.2023 which reads as under:-
1 I note that on 27.2.2024, the asseseee submitted its further reply by reiterating the similar version as narrated in its earlier reply dated 31.3.2023, as reproduced above and vide para no. 15 it has been submitted as under:- “15. It is submitted that in response to notice, dated 30.03.2023, issued u/s. 148 of the Act, the assessee vide its letter dated 31.3.2023 submitted on even date has intimated to your honour that, the original return filed by the assessee on 23.10.2019 vide ack. No. 21468060123109 may kindly be treated as return filed in response to notice u/s. 148 of the Act issued by your honour.” 6.2 In view of above, I find plausible force in the contention of the Ld. AR that in a case where a return of income was filed and thereafter, notice u/s. 148 of the Act was issued directing the assessee to file the return of income; the assessee, by way of a letter, can request that such earlier return of income be considered a return of income in response to notice u/s. 148 of the Act, and such return of income is a valid return of income. This view has been fortified by the decision of the ITAT, Delhi in the case of R.K. Gupta vs. ITO (2008) 115 ITD 384 (ITAT-Delhi); wherein similarly the assessee wrote a letter to the AO stating that the return of income already filed may be deemed to be the return filed in compliance of the notice under section 148 and in the cited case, the Ld. DR raised a specific objection, which was noted by the Tribunal as under:- “7….It was further pointed out that technically the assessee did not file a return in response to the notice under section 148 and, therefore, it is not possible to compute the period of limitation for issue of the notice under section 143(2) and this itself indicates that in a case where no return is filed under section 148, there was no requirement to issue a notice under section 143(2).” 6.3 Further, in the above case held as under:- “8…The judgement of the Rajasthan High Court in the case of Tiwari Kanhaiya Lal (Supra) is authority for the proposition that if 7
an assessee feels that it is not necessary to file a fresh return in response to notice under section 148 and that the earlier return filed by him under section 139 should be treated as sufficient compliance of the reassessment notice, he may be inform the Assessing Officer of his decision to treat his previous return as the return filed under section 148 and in that event, the earlier return will have to be treated as a return under section 148. Therefore, the return filed by the assessee in the original assessment proceedings on 31.08.1995 must be taken as the return filed also in response to the notice under section 148, with the rider that the date of filing of such a return would be the date on which the assessee wrote the letter to the Assessing Officer requesting him to treat the original return as the return filed under section 148. In the present case, the letter was written on 23.3.2000 and it is not in dispute that such a letter was received by the Assessing Officer. Therefore, the date of filing the return under section 148 was 23.3.2000 with the result that the last day for issue of the notice under section 143(2) was 31.3.2011 as per the proviso to the sub-section….”
6.4
The appeal of the Department against the aforesaid order was dismissed by the Hon’ble Delhi High Court in the case of CIT vs. RK Gupta
ITA No. 1080/2008 decided on 17.9.2009. Against the said decision of the Hon’ble Delhi High Court, the Department filed a SLP before the Hon’ble
Supreme Court in the case of CIT vs. RK Gupta, SLP CC No. 7867/2010, which has been dismissed by the Hon’ble Supreme Court of India on 05.07.2010. 6.5
It is well settled law that any assessment made, without issuing and serving the mandatory statutory notice u/s. 143(2) of the Act, is invalid, untenable and null and void ab initio, in view of the decision of the Hon’ble
(SC). It was further noted that from the assessment order page no. 2 vide para no. 2.3 that “statutory notice u/s. 143(2) of the Act could not be sent as the return of income did not file by the assessee in compliance to notice u/s. 148 of the Act.” And thereafter, pasted the screen shot stating that, “You cannot generate notice u/s. 143(2) for this case as no return exists u/s. 148 for this PAN and AY”. In this view of the matter, it is noted that AO clearly shows that the he has treated the return income filed by way of a letter as a valid return of income in response to notice u/s. 148 of the Act and, therefore, was trying to generate the notice u/s. 143(2) of the Act, but could not generate the same. Had the AO not considered the return of income, filed by way of a letter, as a valid return of income, the question of generating notice u/s. 143(2) of the Act would not have arisen. During the course of assessment proceedings did not confront the assessee with the situation of non-generation of the notice u/s. 143(2) of the Act. The screen shot, pasted by the AO is dated 23.3.2024, whereas the last date to issue the notice u/s. 143(2) of the Act has already lapsed/ expired on 30.6.2023. In case the return of income is filed by way of a letter the notice u/s. 143(2) of the Act can be generated. In this regard, assesee filed a copy of notice u/s. 143(2) dated 5.5.2023 placed at page no. 160 of the PB in identical case viz.
Himanshu Gupta, which clearly shows that where return of income in response to notice u/s. 148 was filed by way of letter the notice u/s. 143(2) of the Act can be generated, which establish that notice under section 143(2) was not issued/served within limitation. Under the circumstances, the exparte assessment order is void ab initio for want of mandatory service of juri ictional notice u/s. 143(2) of the I.T. Act, 1961 and hence, not sustainable in the eyes of law, in view of the decision of the Hon’ble Supreme
Court of India in the case of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR
362 (SC) wherein, the Hon’ble Supreme Court has held that the issue of notice u/s. 143(2) of the I.T. Act is mandatory and not procedural. The operative portion of the aforesaid decision is reproduced as under:-
ACIT & Anr. vs. Hotel Blue Moon: [(2010) 321 ITR 362 (SC)]
HELD: “It is mandatory for the AO to issue notice u/s 143 (2). The issuance and service of notice u/s 143 (2) is mandatory and not procedural. If the notice is not served within the prescribed period, the assessment order is invalid Reassessment-----Notice-----
Assessee intimating original return be treated as fresh return---
Reassessment proceedings completed despite assessee filing affidavit denying serviced of notice under section 143(2)----
Assessing
Officer not representing before
Commissioner
(Appeals) that notice had been issued---- Reassessment order invalid due to want of notice under section 143(2)--- Income-tax
Act, 1961, ss. 143, 147, 148(1), prov.----ITO v. R.K. GUPTA [308
ITR 49 (Delhi)Tribu.,”
8. In the background of the aforesaid discussions and respectfully following the precedents, as aforesaid, we quash the assessment order as well as the impugned order, on this legal ground itself by accepting the appeal filed by the Assessee.
9. In the result, the appeal of the Assessee is allowed.
Order pronounced on 07/08/2025. (MAHAVIR SINGH)
VICE PRESIDENT
Date: 22.08.2025
SRBhatnaggar