SAURABH BANKIMCHANDRA DANI,MUMBAI vs. DCIT 4(1), MUMBAI

In this appeal, assessee is aggrieved for the order passed under Section 143(3) read with Section 147 on the plea that no notice under Section 143(2) was issued nor the reasons recorded for reopening were supplied to the assessee.

It was argued by learned AR that no notice under Section 143(2) was issued. Our attention was invited to the remand report called by CIT(A) during appellate proceedings wherein, AO has clearly accepted that no notice under Section 143(2) was issued. Reliance was placed on the decision of the Delhi High Court 2 Saurabh Bankimchandra Dani in the case of Jai Shiv Shankar Traders Pvt. Ltd., 383 ITR 448, Bangalore High Court in the case of Ashed Properties & Investments (P) Ltd., 62 taxmann.com 340 and on the decision of Chandigarh Tribunal in case of Sanjeev Aggarwal 159 ITD 302 in support of proposition that assessment framed without issue of notice under Section 143(2) is null and void. It was also contention of learned A.R that reasons recorded for reopening was also not supplied to assessee inspite of specific request made by assessee.

On the other hand, learned DR relied on the order of the lower authorities.

We have considered rival contentions and carefully gone through the orders of the authorities below as well as remand report issued by the AO wherein AO has clearly accepted the fact that no notice under Section 143(2) was issued, however, he supported the order passed under Section 143(3) read with Section 147 by observing that assessee has not objected the same during the course of assessment proceedings. The failure by the AO to issue notice under Section 143(2) is fatal to the order of the reassessment as per verdict of Hon’ble Delhi High Court in the case of Jai Shiv Shankar Traders (supra), Hon’ble Chandigarh High Court in case of Sanjeev Aggarwal further clarified the position with regard to introduction of provisions under Section 292BB and the assessment framed without issue of 143(2) notice and observed as under:- “From the bare perusal of the above section, we see that a deeming fiction has been created by this section. In case, an assessee cooperates during the assessment even if no notice has been served on him, it is deemed to be served upon him in time as per the provisions of the Act. The provisions of this 3 Saurabh Bankimchandra Dani section is deemed to be served upon him in time as per the provisions of the Act. The provisions of this section clearly laid down the circumstances under which the deeming fiction has to come into force. These conditions have been stated to be as (a), (b) and (c), which talks about the situation where the notice was not served upon the assessee or not served upon him in time or served upon him in an improper manner respectively. Therefore, we see that section talks about only the situation where the assessee raises the issue of non- service of a notice and still cooperates with the Department. Otherwise also, we are of the opinion that issuance of statutory notice cannot be dispensed with by the cooperation of the assessee. Since this notice forms the basis for Assessing Officer to assume jurisdiction under respective sections. Reliance placed by the learned counsel for the assessee on the judgment of the Punjab & Haryana High Court in the case of Cebon India Ltd (supra) is not out of place, whereby it has been very categorically held that absence of a statutory notice cannot be held to be curable under Section 292BB of the Act.”

In view of the above discussion, respectfully following the decision of Delhi High Court as well as co-ordinate Bench as referred above, we do not find any merit in the re-assessment order passed u/s 143(3) read with section 147, framed without issue of 143(2) notice.

In the result, the appeal of the assessee is allowed.