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Facts
The assessee is challenging an order that confirmed additions of Rs. 30,50,000/-. The additions were based on unexplained cash deposits of Rs. 14,50,000/- made during demonetization and other credits of Rs. 16,00,000/- in the bank account. The primary contention of the assessee is that the reassessment proceedings were vitiated due to non-service of mandatory notices.
Held
The Tribunal held that the reassessment proceedings were vitiated due to non-service of notice u/s 148 of the Act, which is a mandatory procedural requirement for making an assessment. The Tribunal directed the Assessing Officer to serve the notice u/s 148 and then proceed to make the assessment de novo after providing the assessee an opportunity to file a return and be heard. Relief was granted to the extent of Rs. 2,50,000/- out of the cash deposit addition, and a verification was ordered for the other addition. The grounds related to double addition were allowed.
Key Issues
Whether the reassessment proceedings are valid when the notice u/s 148 was not served on the assessee, and whether the additions made under section 69A are justified.
Sections Cited
250, 147, 143(3), 148, 69A, 115BBE, 142(1), 133(6), 292BB, 143(2), 149, 148(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: March 17th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated Page 2 of 19 Page 3 of 19 Page 4 of 19 Page 5 of 19 Page 6 of 19 “7.1 In the Ground No.1 to 4 of the appeal, the assessee has raised objection basically on two issues the first being that notice u/s.148 was never served on to him and no notice u/s.143(2) was ever issued to him by the AO. Though, the appellant is making open statement that notice u/s148 was never served upon him but he is completely silent as to whether this issue was ever raised by him before the AO while participating in the assessment proceedings. If so, is there any written document/letter available with him and why the copy of same is not being filed during the course of appeal proceedings. From the body of assessment order, it is clear that a notice u/s.148 dated 01.08.2018, was duly generated and issued by the AO. It is also clear from the assessment order that in response to show cause notice dated 09.10.2019, the appellant did file written submission thereby participating in the assessment proceedings. His participation in the proceedings and his action of not having raised any objection before the AO regarding the service of notice u/s.148 is in complete contradiction to the statement(s) made by him at the appellate stage. Nevertheless, even if the assessee chooses to raise such a contradictory issue at the stage of appeal, the same should have been supported by way of some kind of a cogent evidence such as a certificate from the postal authorities and or extracts of his e-mail ID registered with the Department etc. Prima-facie the objection of the assessee of not having served with a notice u/s. 148, that too not supported by way of any evidence, appears to be a self-serving statement which cannot be taken cognizance of. 7.1.1 The assessee submits that the assessment order is bad in law as no notice u/s. 143(2) was issued to him. On the identical issue the Hon'ble Bench of ITAT, Hyderabad in the case of Gonuguntla Nirmala Devi Vs ACIT (ITAT Hyderabad) in the Appeal Number:
pronounced recently on 17/08/2023 has held that the absence of a Section 143(2) notice did not affect the proceedings when no return was filed by the assessee within the stipulated time. In the case under consideration, the fact remains that the assessee has never filed any income-tax return in response to notice u/s.148 and the AO issued notices u/s.142(1) from time to time and hence, there is no infirmity in the action of AO in completing the assessment proceedings. The appellant in his submission, as reproduced above under para 6 of this order has repeatedly stated that issuance of notice u/s.143(2) is a prior requisite for completing the assessment proceedings for which the reference to several case-laws has also been made. However, in all the cases referred by the Page 7 of 19 Page 8 of 19 Page 9 of 19 Page 10 of 19 Page 13 of 19 “143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.”
It is also imperative to understand the provisions of section 292BB of the Act which are as under:
292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was— (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.