M/S. DIAMOND BUILDERS PVT. LTD.,GHAZIABAD vs. ITO, NEW DELHI

The first issue raised in this appeal is against non issue/service of notice u/s 143(2) of the Act, thereby leading to nullity of the assessment.

The ld. counsel for the assessee submitted that the AO did not issue any notice u/s 143(2) before finalizing the assessment u/s 143(3) read with section 147. It was submitted that this issue was taken up before the ld. CIT(A) in the first round of proceedings, but, the appeal of the assessee was dismissed by means of a non-speaking order. When the assessee approached the Tribunal, the original order passed by the ld. CIT(A) was set aside with the direction to the first appellate authority to provide the assessee a reasonable opportunity of being heard and, thereafter: “pass a speaking order on merits.” When the matter again came up before the ld. CIT(A), the ld. AR pointed out, the assessee again raised the objection about the non issue/service of notice u/s 143(2) which the ld. CIT(A) refused to dispose of by holding that the Tribunal has restored the matter to the CIT(A) for passing the speaking order `on merits’. That is how the ld. CIT(A) dealt with additions made on merits. The ld. AR contended that, thus, the legal grounds about non- issue/service of notice u/s 143(2) remained undisposed of. The ld. DR candidly agreed with the contention advanced on behalf of the assessee.

I have heard the rival submissions and perused the relevant material available on record. It is observed that the Tribunal in the first round remitted the matter to the file of the ld. CIT(A) for disposing of the appeal `on merits’ which means that all the grounds, including the legal grounds were required to be disposed of by the ld. CIT(A) on merits by a speaking order rather than disposing the appeal in summary manner. The question of service of notice u/s 143 (2) is a necessary legal issue which leads to the acquisition of jurisdiction for framing the assessment. Since the ld. CIT(A) has not disposed of this legal ground raised before him, I am of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of ld. CIT(A). I order accordingly and direct him to dispose of all the grounds taken before him including the legal grounds, on merits, after allowing a reasonable opportunity of being heard to the assessee.

In the result, the appeal is allowed for statistical purposes.