CLASSIC DISPLAY SYSTEMS PVT. LTD.,NEW DELHI vs. ITO WARD 6(2), NEW DELHI

The ld counsel of the assessee, pressing into service legal ground No. 2 of assessee submitted that the AO before framing the reassessment order have not assumed valid jurisdiction as the AO has proceeded to pass reassessment order without issuing notice u/s 143(2) of the Act subsequent to the assessee having informed the AO that the return originally filed should be treated as return filed in pursuant to the notice u/s 148 of the Act. Thus, the entire proceeding and impugned reassessment order is invalid being passed without having valid jurisdiction. The ld counsel has also placed reliance on the various judgments of Hon'ble High Court including judgment of Hon'ble jurisdictional High Court of Delhi in the case of PCIT Vs. Silver Line reported as 383 ITR 455 Del).

Replying to the above the ld Sr. DR supported the orders of the authorities below and submitted that even if it is presumed that the AO has not issued any notice u/s 143(2) of the Act then also such kind of defects are covered in the provision of section 292BB of the Act. 5. Placing rejoinder to the above the ld counsel drew our attention towards copy of the report of the AO vide dated 26.04.2013 addressed to the Sr. DR and submitted that the copy of the notice u/s 143(2) of the Act have not been found in the relevant assessment records and such defects is not curable u/s 292BB of the Act. 6. On careful consideration of the above submission, first of all from the report of the AO vide dated 26.04.2023 (supra) it has been reported that the copy of notice u/s 143(2) of the Act was not found in the relevant assessment records. Therefore, I safely presumed that the revenue failed to substantiate the fact that the AO had issued notice u/s 143(2) of the Act before framing reassessment order. Identical controversy was placed for adjudication before the Hon'ble Jurisdictional High Court in the case of PCIT Vs. Silver Line (supra) wherein, their lordship speaking in jurisdictional Classic Display Systems Pvt. Ltd High Court held that merely because the assessee participated in proceedings pursuant to notice u/s 148 of the Act, it would not obviate mandatory requirement AO to issue assessee a notice u/s 143(2) of the Act before finalizing order of reassessment. Their lordship also held that the provision of section 292BB of the Act would apply with regard to failure of service of notice and not with regard to failure of issue of notice therefore, failure of AO in reassessment proceedings to issue notice u/s 143(2) of the Act prior to finalizing the reassessment order cannot be condoned by referring to the provision of section 292BB of the Act. Respectfully following the proposition rendered by the Hon’ble Jurisdictional High Court I hold that in absence of any notice u/s 143(2) of the Act by the AO to the assessee the entire reassessment proceedings, notice u/s 148 of the Act and all consequential orders including reassessment order is not sustainable and valid being passed without assuming valid jurisdiction as per provision of the Act. Therefore, the impugned reassessment order is quashed. Accordingly, ground No. 2 of the assessee is allowed.

Since in the earlier part of this order I have allowed legal ground of assessee and have quashed the impugned reassessment order and ld representatives of both sides have not made any arguments on the other grounds of assessee therefore, in absence of any argument thereon I do not deem it proper to adjudicate the other grounds of assessee.

In the result, appeal of the assessee is partly allowed on legal ground. Order pronounced in the open court on 07/07/2023.