ITO, MEERUT vs. MOHD ILIYAS, MEERUT

The only grievance projected through various grounds is against the quashing of the assessment order passed u/s 147 of the Income-tax Act, 1961 (hereinafter also called `the Act’) for non-issuance of notice u/s 143(2) of the Act.

Briefly stated, the facts of the case are that the Assessing Officer initiated proceedings by way of notice u/s 148 and added a sum of Rs.53,07,000/- in an ex parte assessment order, being, income from `capital gains’ on account of sale of land which the assessee had claimed to be outside 8 kms. of Municipal limit of Meerut and hence exempt from tax. The assessment order was passed u/s 147 read with section 144 of the Act. The ld. CIT(A) set aside the assessment order on the ground that no notice u/s 143(2) was ever issued to the assessee.

We have heard both the sides and gone through the relevant material on record. It is observed from the impugned order that the assessee, vide its letter dated 12.06.2014 submitted before the Assessing Officer that the return filed on 29.04.2014 should be considered in response to notice u/s 148 of the Act. This position was ascertained by the ld. CIT(A) on inspecting the assessment record, who further recorded that no notice u/s 143(2) was issued to the assessee. No material has been placed before us to demonstrate that the findings recorded in the impugned order, namely, that the assessee filing the return on 29.04.2014 in response to notice u/s 148 and non-service of notice u/s 143(2) by the Assessing Officer, are not correct. The further fact that the assessment order has been passed u/s 144 of the Act corroborates the non-issuance of notice u/s 143(2) to the assessee. It is a settled legal position that notice u/s 143(2) of the Act must be issued before making an assessment u/s 147 of the Act. The Hon'ble Delhi High Court in Principal CIT vs. Silver Line & Anr. (2016) 383 ITR 455 (Del), has held that a reassessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the Assessing Officer to the assessee u/s 143(2) of the Act. Similar view has been taken by the Hon'ble Kerala High Court in Travancore Diagnostics Pvt. Ltd. vs. ACIT (2017) 390 ITR 167 (Ker). In view of the aforestated legal position, we are satisfied that the ld. CIT(A) adopted an unimpeachable view in setting aside the assessment order for non-issuance of notice u/s 143(2) of the Act.