PR COMMISSIONER OF INCOME TAX JAIPUR- II vs. SHRI MAHENDRA KUMAR SETHIA

ITA/315/2018HC RajasthanRJHC02099880201820 August 2019Bench: S. RAVINDRA BHAT,INDERJEET SINGH1 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Court observed that it is settled law that an assessment cannot be deemed complete under Section 143(3) without issuing a notice under Section 143(2). The ITAT had relied on the precedent of Additional Commissioner of Income Tax Vs. Hotel Blue Moon 321 ITR 362, and the assessee had indeed challenged the assessment on this ground. Since the Revenue did not raise this ground in its appeal and did not appear to have opposed the factual basis of the ITAT's finding during the hearing, the Court found no substantial question of law to consider. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The Principal Commissioner of Income Tax, Jaipur-II (the Revenue) filed an appeal before the Rajasthan High Court against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had invalidated an assessment for Assessment Year 2007-08. The Revenue's appeal challenged the ITAT's decision to invalidate the assessment on the ground that a notice under Section 143(2) of the Income Tax Act was not issued. The Revenue contended that this issue was not raised before the lower appellate authority. The High Court noted that the ITAT relied on the ruling in Additional Commissioner of Income Tax Vs. Hotel Blue Moon 321 ITR 362, and that the assessee had indeed challenged the assessment's validity due to the absence of a Section 143(2) notice.

What were the issues?

1. Whether the ITAT erred in invalidating the assessment for AY 2007-08 on the ground that no notice was issued under Section 143(2) of the Income Tax Act, 1961? (Question of law) Assessee's Contentions: The assessee argued and challenged the validity of the assessment proceedings in the absence of a notice under Section 143(2). (Relied on Additional Commissioner of Income Tax Vs. Hotel Blue Moon 321 ITR 362). Revenue's Contentions: The Revenue submitted that the issue of the invalid assessment due to the absence of a Section 143(2) notice was not urged before the lower appellate authority. The Revenue did not oppose the factual foundation for the ITAT's finding.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3)

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No.315/2018 Pr. Commissioner Of Income Tax, Jaipur- II, Jaipur. ----Appellant Versus Shri Mahendra Kumar Sethia, O-1-B, Hospital Road, Jaipur ----Respondent For Appellant(s) : Mr. Nikhil Simlote HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE INDERJEET SINGH Order 20/08/2019 1. The question of law on behalf of the revenue is that ITAT should not have invalidated the assessment (for AY 2007-08) on the ground that notice was not issued under section 143(2) of the Income Tax Act. 2. It is submitted in this regard that this issue was not urged before the lower appellate authority. 3. This court notices from the impugned order that ITAT relied upon the ruling in Additional Commissioner of Income Tax Vs. Hotel Blue Moon 321 ITR 362. Apparently the assessee had argued and challenged the validity of assessment proceedings, in the absence of a notice under section 143(2). It is now settled law that without issuing notice under section 143(2) the assessment cannot be deemed complete under section 143(3) of the Act. Since the revenue has not urged this ground as an appeal - nor does it appear to have opposed the factual foundation for the finding by the ITAT in the hearing before it, this Court is of the opinion that no substantial question of law arises. 4. The appeal is therefore dismissed. (INDERJEET SINGH),J (S. RAVINDRA BHAT),CJ VIJAY/JYOTI /40

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