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2016 (9) TMI 746 - AT - Income TaxValidity of the assessment - notice u/s. 143(2) not served within the prescribed time - Held that - The Tribunal has taken a view in a number of cases that if notice u/s. 143(2) is not served within the prescribed period, the assessment framed consequent thereto is bad in law and deserves to be quashed, following the various judgments of different High Courts. We therefore, following the judgment of the Hon ble Allahabad High Court in ACIT v. Greater Noida Industrial Development Authorit 2015 (8) TMI 620 - ALLAHABAD HIGH COURT to hold that the notice u/s. 143(2) was not served within the prescribed period, therefore assessment framed consequent thereto is quashed. Accordingly, we set aside the order of the CIT(Appeals) as well as the assessment order. Since we have quashed the assessment order, we find no justification to deal on the merits of the case. - Decided in favour of assessee.
Issues Involved:
1. Validity of assessment proceedings due to non-service of notice under Section 143(2) within the prescribed period. 2. Legality of additions upheld by the CIT(A) without considering written submissions and evidence. 3. Discrepancies in the balance sheet regarding an outstanding loan. 4. Contradictions in the appellant's statements regarding the nature of a receipt. Detailed Analysis: 1. Validity of Assessment Proceedings: The primary issue raised by the assessee was the validity of the assessment proceedings due to the non-service of the notice under Section 143(2) within the prescribed period. The assessee filed the return of income on 20.08.2011, and thus, the notice under Section 143(2) had to be issued by 30.09.2012. The Assessing Officer (AO) claimed to have issued a notice on 13.09.2012, but it was not served on the assessee. Consequently, another notice was issued on 14.12.2012. The Tribunal noted that the AO's own admission indicated that the first notice was not served, which invalidated the jurisdiction to frame the assessment. The Tribunal relied on the judgment of the Hon'ble Allahabad High Court in ACIT v. Greater Noida Industrial Development Authority, which held that the non-service of notice within the prescribed period invalidates the assessment. 2. Legality of Additions Upheld by CIT(A): The assessee contended that the CIT(A) erred in upholding the additions of ?2,37,00,000 without considering the written submissions dated 09.10.2014 and 14.08.2014, along with the enclosed evidence. The Tribunal, however, did not delve into the merits of this issue as it had already quashed the assessment order due to the invalid notice under Section 143(2). 3. Discrepancies in the Balance Sheet: The assessee argued that the CIT(A) erred in holding that there was no outstanding loan amount in the balance sheet of Krishna Enterprises, ignoring the evidence placed before him. This issue was also not addressed on merits by the Tribunal due to the quashing of the assessment order. 4. Contradictions in Appellant's Statements: The assessee claimed that the CIT(A) erred in upholding the addition on the grounds of initial statements about the receipt being a fee for a project, which later got converted into a loan. The Tribunal did not address this issue on merits, as the assessment order was quashed. Conclusion: The Tribunal quashed the assessment order on the grounds that the notice under Section 143(2) was not served within the prescribed period, thus invalidating the jurisdiction of the AO to frame the assessment. Consequently, the Tribunal set aside the order of the CIT(A) and did not address the merits of the other issues raised by the assessee. The appeal of the assessee was allowed.
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