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2017 (1) TMI 624 - ITAT DELHI

2017 (1) TMI 624 - ITAT DELHI - TMI - Validity of assessment - non-service of notice u/s. 143(2) within the prescribed time - Held that:- AO has not issued any notice u/s 143(2) of the I.T. Act to the assessee. During the entire assessment proceedings, the assessment order in dispute is invalid, void abnitio and against the provisions of the law and the impugned order is not sustainable in the eyes of law and hence, cancel the same by accepting the appeal filed by the Assessee. - Decided in favo .....

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. 2. That the CIT(A) has not appreciated that the ITO has grossly erred in deciding the case exparte without service of notice u/s. 143(2) within the prescribed time. 3. That Ld. CIT(A) has not appreciated that notice u/s. 143(2) of Income Tax Act, 1961 dated 27.6.2007 issued by the ITO was served upon some unknown person/ unrelated person and not upon the assessee. Hence, the orders of the ITO are liable to be quashed on this ground alone. 4. That Ld Commissioner OfIncome Tax (Appeals). XXV Has .....

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ned The Said Sale, Which Is Without Any Basis And Without Any Reasonable Material Available On Record. 7. That Ld Commissioner Of Income Tax (Appeals) XXV Has Not Appreciated That All The Additions Made By The A.O. Are Bad In Law, Illegal And Against The Principal Of Natural Justice. 8. That Appellant Craves Leave To Add, Alter, Omit To /From The Grounds Of Appeal At The Time Of Hearing. Prayer: - In View Of The Above Mentioned Circumstances It Is Most Respect Fully Prayed That Please Quashed Th .....

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tice u/s. 143(2) of I.T. Act, 1961 dated 27.6.2007, for hearing dated 14.8.2007, was issued. As per AO on noncompliance the case was again refixed and notice u/s. 143(2) of the I.T. Act, 1961, dated 25.7.2008, for hearing dated 8.9.2008, was issued. Subsequently notice u/s. 142(1) of the I.T. Act, 1961 dated 24.10.2008 and 12.11.2008, alognwith questionnaire for hearing dated 24.11.2008 and 08.12.2008, was issued upon the assessee. AO observed that on non-compliance and even after given ample op .....

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AF of I.T. Act, 1961 @30% and completed the assessment at the income of ₹ 210,000/- as against declared income of ₹ 132,400/- vide his order dated 29.12.2008 passed u/s. 144 of the Income Tax Act, 1961. 3. Aggrieved with the aforesaid order dated 29.12.2008, assessee filed the Appeal before the Ld. CIT(A), who impugned order dated 14.12.2015 has confirmed the additions made by the AO. 4. Against the aforesaid order dated 14.12.2015 passed by the Ld. CIT(A), assessee is in appeal befo .....

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on this issue before the Ld. First Appellate Authority but he has also rejected the request of the assessee in routine manner. Finding of the Ld. CIT(A) is contrary to the law and the facts and circumstances of the present case as well as the decision of the Hon ble Supreme Court of India in the case of ACIT & Anr. Vs. Hotel Blue Moon [2010] 321 ITR 362 (SC) wherein the Hon ble Supreme Court has held that the issue of notice u/s. 143(2) of the I.T. Act is mandatory and not procedural. If the .....

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rein the Hon ble Courts held that non-service of the notice u/s. 143(2) of the I.T. Act, the assessment made in such cases is invalid. He requested that on this ground the assessment in dispute as well as the impugned order passed by the Ld. CIT(A) may be declared invalid, void abnitio. In support of his contention Ld counsel of the assessee cited following relevant judgment:- ACIT & anr. Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC) 6. Ld. DR relied upon the order passed by the Ld. CIT(A) and .....

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reme Court of India on the legal issue in dispute. No doubt assessee has raised so many grounds of appeal in which the assessee challenged the non-service of the notice u/s. 143(2) of the Act. In support of his contention he has also cited various decisions. Assessee has also challenged the addition in dispute on merit also by producing various documentary evidence supporting its claim before the Revenue Authority as well as before us, but he argued only on the issue involved in ground no. 2 to .....

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u/s. 144 of the I.T. Act. I find considerable cogency in the assessee s counsel contention that there was non-service of notice u/s. 143(2) of the I.T. Act within the prescribed time; the notice dated 27.6.2007 was served to some unknown person/ unrelated person and decided the exparte on 29.12.2008 as no notice for fixing the case for 29.12.2008 was issued and exparte assessment order has been passed. I am of the view that the AO has not issued notice u/s. 143(2) of the I.T. Act which is mandat .....

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t order dated 29.12.2008 passed u/s. 144 of the I.T. Act as invalid. My view is supported by the various judgment of the Hon ble Supreme Court, Hon ble Jurisdictional High Court, other High Courts and Special Benches decision of the ITAT. The relevant portion of the various judgments of the Hon ble Courts are reproduced as under:- ACIT & Anr. vs. Hotel Blue Moon: [(2010) 321 ITR 362 (SC)] HELD: It is mandatory for the AO to issue notice u/s 143 (2). The issuance and service of notice u/s 143 .....

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me-tax Act, 1961, ss. 143, 147, 148(1), prov.-ITO v. R.K. GUPTA [308 ITR 49 (Delhi)Tribu., DIT vs. SOCIETY FOR WORLDWIDE INTERBANK FINANCIAL TELECOMMUNICATIONS in ITA 441 OF 2010 (Delhi High Court) [(2010) 323 ITR 249] The notice u/s 143(2) was issued on 23-03-2000 while the return was filed on 27-03-2000. Even if it was issued on 27-03-2000 without examining the return, it was invalid. The notice was invalid and so was the assessment. DCIT vs. Indian Syntans Investments (P) Ltd. [(2007) 107 ITD .....

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s 143(2) within the prescribed time, made the whole block assessment order null and void and bad in law, despite the assessee not having raised any objection before the passing of the assessment order and despite the provisions of section 292BB of the Act? " Held: In this case, Hon'ble High Court has held that section 292BB cures the defects in service of notice but section 292BB is 'confined to only service of notice under this Act and this section does not apply to 'Issuance o .....

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he Act. CIT vs Rajeev Sharma 336 ITR 678, High court of Allahabad. In view of above submissions and case laws, it has been established that no notice u/s 143(2) was issued in the present case and therefore the impugned assessment is liable to be annulled. M/s Sapthagiri Finance and Investments vs. ITO: TC(A). No. 159 of 2006 dated 17.07.2012 (Mad HC) [(2013) 90 DTR (Mad) 289] Relevant para reproduced here under: "13. As far as the present case is concerned, the provisions of Section 148 als .....

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otice issued under Section 143(2), and in the light of the fact that the very basis of the reassessment was the failure on the part of the assessee in not disclosing the capital gains arising on the transfer of property for assessment and that admittedly the assessee had requested the officer to accept the original return as a return filed in response to Section 148 of the Act, we hold that there was total failure on the part of the Revenue from complying with the procedure laid down under Secti .....

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reeJai Shiv Shonhor Traders (P) Ltd. - A.Y. - 2008-09 Reassessment order passed under section 143(3)/148 without issue of a valid notice under section 143(2) was illegal. CIT vs. Pawan Gupta & Ors. [(2009) 318 ITR 322 (Del) Hon'ble Delhi High Court held in Para 38 of the order observed as under:- "Thus, we are of the clear view that where the assessing officer is not inclined to accept the return of undisclosed assessment filed by the assessee issuance of a notice under section 143( .....

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