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ACIT, CC-9, NEW DELHI Versus M/s RAVNET SOLUTIONS PVT. LTD. and Vice-Versa

2017 (4) TMI 818 - ITAT DELHI

Validity of assessment proceedings - non-Service of notice u/s 143(2) - 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, we cancel the same by accepting the Cross Objection filed by the Assessee. - I.T.A. No.4889/DEL/2011, C.O. NO. 6/DEL/2012, (IN ITA NO. .....

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1. The order of the Ld. CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 33,41,230/- made on account of salary and liaisoning expenses. is not correct in law and facts. 2. That the Ld. CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 4,40,000/- made on account of web designing. 3. That the Ld. CIT(A) erred in law and on facts of the case in deleting the addition of ₹ 58,10,000/- made on account of share application money. 4. .....

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he case Ld. CIT(A) has erred in law and on facts in not quashing the impugned assessment order on the ground that the same was passed without assuming jurisdiction as per law and without serving the mandatory notice u/s. 143(2) of the Income Tax Act, 1961. 2. That in any case and in any view of the matter, action of ld. CIT(A) in confirming the action of AO in framing the assessment order that too without serving the mandatory notice u/s. 143(2) is bad in law and against the facts and circumstan .....

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sent through Speed Post on 17.9.2008 at the address as per the AST systems fixing the case for hearing on 23rd September, 2008. On 23.9.2008, neither anybody attended nor any rely was filed. A fresh notice u/s. 142(1) dated 29.1.2009 was issued. Again none attended nor any rely was filed. Again a notice u/s. 142(1) alongwith questionnaire was issued through Speed Post on 18.2.2009 but again none attended nor anyh rely was filed. Finally a notice u/s. 142(1) was sent on 18.3.2009 fixing the case .....

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at the address of the assessee as well as the Director of the company fixing the case for hearing on 16.11.2009. One notice sent a office address was received back. Again a final opportunity notice alongwith proposed addition was sent through speed post at two of the address of the assessee company and one of the Directors of the Company. But none attended nor any rely was filed. Under such circumstances, the AO completed the assessment proceedings exparte on the basis of material information on .....

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t the threshold, Ld. Counsel of the assessee has stated that the Cross Objection filed by the assessee has involved the legal issue and therefore, the same may be first decided. Hence, we first deal with the Assessee s Cross Objection and adjudicate upon the legal issue. 8. At the time of hearing Ld. Counsel of the assessee argued only on the issue involved in ground nos. 1 to 2 relating assuming jurisdiction as per law and without serving the mandatory notice u/s. 143(2) of the I.T. Act, 1961 a .....

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M/s S. Chandak & Co. for consultation and ROC fees paid for Form No. 18; Copy of payment receipt for Form No. 32 dated 20.5.2008; Copy of Bill dated 20.5.2008 raised by M/s S. Chandak & Co. for consultation and ROC fees paid for From No. 18; Copy of challan dated 25.2.2009 for Form No. 18; Copy of Form No. 18 showing change of address w.e.f. 2.2.2009; copies of the list of the documents requested from department s file after inspection along with fee paid for the same; copy of order shee .....

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ithin the prescribed period, the assessment order is invalid. He further submitted that the Ld. CIT(A) has ignored the order of the Hon ble Supreme Court of India (Supra) and passed the impugned order which is contrary to law and facts on file and deserve to be cancelled. 9. Ld. DR relied upon the order passed by the Ld. CIT(A) and stated that the Ld. First Appellate Authority has passed a well reasoned order on the basis of the records and as per the provisions of law, therefore, the impugned o .....

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h statement of total income of assessee; copy of payment receipt for Form No. 18 dated 20.5.2008; Copy of Bill dated 20.5.2008 raised by M/s S. Chandak & Co. for consultation and ROC fees paid for Form No. 18; Copy of payment receipt for Form No. 32 dated 20.5.2008; Copy of Bill dated 20.5.2008 raised by M/s S. Chandak & Co. for consultation and ROC fees paid for From No. 18; Copy of challan dated 25.2.2009 for Form No. 18; Copy of Form No. 18 showing change of address w.e.f. 2.2.2009; c .....

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for the same mentioning the address of the assesse at 305, Agarwal Arcade, Plot No. 6, Sector-12, Dwarka, New Delhi - 110 078 addressed to the ITO Ward 15(3), New Delhi; From the order sheet recorded during assessment proceedings filed at page no. 13 of the Paper Book shows that 15.9.2008 - Notice u/s. 142(1) issued. However, the AO as well as Ld. CIT(A) in their respective orders mentioned that the Notice u/s. 143(2) was issued on 15.9.2008 which is contrary to the order sheet recorded by the .....

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were served to the assessee on the address i.e. 6, Community Centre, Basement, East of Kailash, New Delhi. This shows that the notice u/s. 143(2) of the Act were never sent either on the address mentioned in the return of income i.e. 41, LIG Flats, Pocket-3, Dwarka, Phase-I, West Delhi and nor sent at the address mentioned on the assessment order i.e. 6, Community Centre, Basement, East of Kailash, New Delhi. This has established that there was nonservice of notice u/s. 143(2) of the I.T. Act w .....

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ce of the mandatory notice u/s. 143(2) of the Act is decided in favor of the assessee by declaring the assessment order dated 11.12.2009 passed u/s. 143(3) of the I.T. Act as invalid. Our view is fully 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) .....

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ssioner (Appeals) that notice had been issued- Reassessment order invalid due to want of notice under section 143(2)- Income-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 w .....

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n Tax Appeal no. 435 of 2011 of Hon'ble Gujarat High Court Issue Involved: "Whether non-issuance of the notice u/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 .....

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e a go-bye to mandatory requirement of issuance of notice within the statutory fixed by the proviso to section I43(2) of the 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] .....

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under Sections 142 and 143 (2) is mandatory. On the admitted fact that beyond notice under Section 142(1), there was no notice 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 Ac .....

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ed with. S. 143(2) is applicable to proceedings u/s 147 & 148. JYOTI PAT RAM VS. ITO [(2005) 92 ITD 423 (Lucknow) - ShreeJai 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 .....

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