PREKSHA TEXTILE PVT. LTD.,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-3(1)(4), AHMEDABAD

The challenges of the petitioner is against the validity of the order passed under Section 143(3) r.w.s. 147 of the Act in the absence of the issuance of the notice under Section 143(2) of the Act by the authorities below. Counsel appearing for the assessee submitted before us that the notice under Section 143(2) has never been issued by the authorities below. When this particular fact was brought to the notice of the Ld. CIT(A) the appellant was directed to file an affidavit to that effect. It is the further case of the appellant that the entire records as supplied under the application by virtue of the RTI Act, 2005 do not show the issuance of the said notice under Section 143(2) of the Act. He has further taken us to the said records appearing at Pages 1, 2 and 3 of the supplementary Paper Book filed before us by the appellant wherefrom the issuance of the said notice under Section 143(2) by the authorities below is not reflecting at all. Under this premise he urges before us that when the prescribed procedure of issuance of notice under Section 143(2) has not been followed assumption of jurisdiction of issuance of notice of reopening under Section 147 of the Act itself is not sustainable and thus the entire order is liable to be set-aside.

On the other hand, the Ld. DR relied upon the last paragraph of the order impugned passed by the Ld. CIT(A) which speaks of possibilities of misplacement of some pages of the record during transit from AO to Range Head/PCIT or AO to Audit or AO to Revenue Audit or AO to Inspection 2005 under Section 7(1) of the said Act which do not show any such issuance of notice under Section 143(2) of the Act. It is pertinent to mention that the entire files/records were supplied as applied for under this RTI Act, 2005 by the appellant and therefore, there should not have been any probability of having any other separate pages got misplaced during transit as claimed by the Ld. CIT(A). We have also taken note of the submissions and perused the letter dated 31.07.2020 supplied by the Ld. AO which clarifies that no such notice under Section 143(2) is found to have been served upon the assessee. Further that the Ld. AO mentioned all the notices issued by him in the Assessment Order passed under Section 143(3) of the Act. But there was no mentioning of the notice issue under Section 143(2) of the Act which substantiates that no such notice under Section 143(2) of the Act was even issued by the Ld. AO. Under this circumstances, we do not hesitate to come to the conclusion that the notice under Section 143(2) of the Act was not issued at all by the authorities below. The second question as to whether in the absence of issuance of notice under Section 143(2), the reopening under Section 147 of the Act is valid or not has been argued by the Ld. Senior Counsel for the assessee in favour of the assessee relying upon the judgment passed by the Hon’ble Preksha Textiles Pvt. Ltd. vs. ITO Jurisdictional High Court in the matter of CIT vs. Sukhini P. Modi reported in [2014] 52 taxmann.com 50 (Gujarat), a copy whereof has been submitted before us. In that particular matter both the Ld. CIT(A) and the Ld. Tribunal were pleased to hold that procedure prescribed for issuance of notice under Section 143(2) were not followed and therefore, the assumption of the jurisdiction of issuance of notice of reopening itself would not be sustainable. Relying upon the judgment passed by the Hon’ble Apex Court the Hon’ble Jurisdictional High Court was pleased to find no reason of requirement to indulge into the concurrent findings of both the authorities in the absence of fulfillment of mandatory requirement of issuance of notice under Section 143(2) of the Act. The relevant portion of said judgment is as follows:- “8. The apex court in the case of Asstt. CIT v. Hotel Blue Moon [2010] 321 ITR 362/188 Taxman 113 has considered the very issue. The apex court held that the Assessing Officer has to necessarily follow the provisions of section 142 and sub- sections (2) and (3) of section 143. It did not accept the submission of the Revenue that the requirement of the notice under section 143 can be dispensed with and the same is mere procedural irregularity. In the words of the apex court, it is held as under (page 370): “The case of the Revenue is that the expression ‘so far as may be apply’ indicates that it is not expected to follow the provisions of section 142, sub- sections (2) and (3) of section 143 strictly for the purpose of block assessments. We do not agree with the submissions of the learned counsel for the Revenue, since we do not see any reason to restrict the scope and meaning of the expression’ so far as may be apply’. In our view, where the Assessing Officer in repudiation of the return filed under section158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143.”

In the instant case, we notice that both the Commissioner of Income tax (Appeals) and the Tribunal have held that the procedure prescribed of issuance of notice under section 143(2) has not been followed at all. This realm of fact has not been disputed by the Revenue. In view of this decision of the apex court, the assumption of the jurisdiction of issuance of notice of reopening itself would not be sustainable, and, therefore, this court does not require to indulge into the concurrent findings of both the authorities. In the absence of fulfillment of mandatory Preksha Textiles Pvt. Ltd. vs. ITO requirement of issuance of notice under section 143(2) both the authorities rightly and validly held against the Revenue and in favour of the assessee. Resultantly, the tax appeals deserve no further consideration and are dismissed with no order as to costs.”

In the result, assessee’s appeal is allowed. This Order pronounced in Open Court on 15/10/2020 (AMARJIT SINGH) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/10/2020 TANMAY, Sr. PSआदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant

""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त(अपील) / The CIT(A)-

"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड" फाईल / Guard file.