SHRI PURNA CHANDRA DAS,BHUBANESWAR vs. ITO, WARD-3(4), BHUBANESWAR

This is an appeal filed by the assessee against the order of the

CIT(A)-2, Bhubaneswar dated 11.6.2018for the assessment year 2013-14.

assessee pressed legal ground that the assessment order has been passed

without issuing notice u/s.143(2) of the Act, therefore, the order is to be

annulled.

was issued on 24.3.2017 and in response to the said notice, the assessee

filed written submission on 29.3.2017 with copies of bank accounts

maintained and explanation regarding source of cash deposits in saving

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bank account. However, return was not filed for the assessment year 2013-

the assessee on 4.5.2017 requiring the assessee to filed true and correct

return on or before 12.3.2017 and also on 19.5.2017, the assessee was

required to furnish accounts and documents. He submitted that the

assessee filed his return of income for the assessment year 2013-14

electronically u/s. 142 of the I.T.Act instead of filing in response to notice

u/s.148 of the Act. Ld counsel submitted that the Assessing Officer issued

notice u/s.142(1) of the Act on 4.5.2017 and in response to which, the

assessee filed its return of income on 10.10.2017. he submitted that since

a return of income has been filed in response to notice u/s.142(1) of the

Act, the Assessing Officer is duty bound to issue notice u/s.143(2) of the Act

before undertaking scrutiny of the income tax return and completing the

assessment. Therefore, in absence of issue of notice u/s.143(2) of the Act,

the assessment order passed by the AO is abinitio void and liable to be

quashed.

Court in the case of ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC) in

the said case, the Hon'ble Supreme Court held that "Omission on the part

of the assessing authority to issue notice under section 143(2)cannot be a

procedural irregularity and the same is not curable and, therefore, the

requirement of notice under section 143(2) cannot be dispensed with.". He

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further relied on the decision of Hon’ble High Court of Delhi in the case of

Pr. CIT vs. Shri Jai Shiv Shankar Traders Pvt Ltd., in ITA 519/2015 order

dated 14.10.2015, wherein, it is held that failure by the AO to issue a notice

to the assessee under section 143(2) of the Act pursuant to notice under

section 148 of the Act, is fatal to the order of reassessment. He further

referred to the judgment of Hon’ble Madras High Court in the case of

Sapthagiri Finance and Investments vs ITO in TC (Appeal) No.159 of 2006

order dated 17.7.2012 held that beyond notice issued u/s.142(1) of the Act

there was no notice issued under section 143(2) of the Act, there was total

failure on the part of the revenue from complying with the procedure laid

down under section 143(2) of the Act, which is mandatory one. Further

reliance was placed on the decision of Hon’ble Delhi High Court in the case

of CIT vs Pawan Gupta, 318 ITR 322 (Del), wherein, it was held that the

assessment order passed without complying with section 143(2) of the Act,

it would be invalid and not be merely irregular. Reliance was placed on the

decision of ITAT Indore in the case of ACIT vs Sukhamani Cotton Industries

and ors in ITA No.22/Ind/2017 and ors order dated 21.12.2018, wherein it

was held that even though notice u/s.148 of the Act has been issued but

the notice u/s.143(2) of the Act has not been issued, a fatal error has been

committed by the AO and thus the reassessment order u/s.147 r.w.s 143(3)

of the Act is invalid.

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authorities.

case as well as the orders of lower authorities. In the instant case, the

assessee is an individual and derives his income from other sources. Since

the assessee did not file return of income, a notice u/s.148 of the Act was

issued by the AO and in response to which, the assessee filed written

submission with copies of bank accounts and explanation regarding source

of cash deposits in saving bank account. Thereafter, another notice

u/s.142(1) of the Act was issued by the AO requiring the assessee to

prepare the return of income and file the same on or before 12.5.2017.

Thereafter, the AO proceeded to frame assessment u/s.144/147 of the Act

on 29.12.2018 without issuing notice u/s.143(2) of the Act. While doing so,

the AO took cognizance of total income as shown in the statement of

income accompanied with the return filed u/s.142(1) of the Act. On

perusal orders of lower authorities, I find that though the assessee has filed

its return of income in response to notice u/s.142(1) of the Act, the

Assessing Officer has failed to issue any notice u/s.143(2) of the Act, which

is mandatory. I also find that the Hon’ble Supreme Court in the case of

Blue Moon (supra) held that "Omission on the part of the assessing

authority to issue notice under section 143(2)cannot be a procedural

irregularity and the same is not curable and, therefore, the requirement of

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notice under section 143(2) cannot be dispensed with.". Further the Hon'ble

Allahabad High Court in the case of CIT vs. Salarpur Cold Storage Private

Limited (2015) 228 taxmann 48 (Mag.) (All), held that "Where there is a

failure apparent to issue a notice under section 143(2) within prescribed

period, it cannot be cured by taking recourse to section 292BB of the

Income Tax Act, 1961."

363 ITR 311 (Ker), has held that "Where no notice as issued under section

143(2) to assessee, assessment made under section 143(3) was to be set

aside." Similar view has also been taken in plethora of judgments cited

supra.

laws, we find that statutory notice as required to Sec. 143(2) of the Act was

to be issued by the Competent Authority and within the time. I also find

that the ld. DR also failed to bring anything contrary to the arguments

advanced by the ld. AR with regard to the issue of notice u/s.143(2) of the

Act before completion of assessment u/s.144/147 of the Act. Consequently,

I find that in absence of any valid notice u/s.143(2) of the Act having been

issued in the instant case, the impugned order passed u/s.144/147 of the

Act cannot be sustained. As such, the assessment framed, without the

issuance of the mandatory notice u/s. 143(2), is void ab initio. The assessee

succeeds in legal ground of appeal.

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grounds of appeal on merits are not adjudicated upon

Order pronounced on 31 /12/2019.

(Chandra Mohan Garg) JUDICIAL MEMBER Cuttack; Dated 31 /12/2019 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Purna Chandra Das, Plot No.9, Ashok Nagar, Bhubaneswar

By order

Sr.Pvt.secretary ITAT, Cuttack

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