Reassessment completed without serving notice u/s 143(2) invalid. Issue and service of notice are jurisdictional requirements
ABACUS Case Law Citation
ABCAUS 3377 (2020) (08) ITAT
Important case law relied upon by the parties:
CIT vs. Chetan Gupta 382 ITR 613
In the instant case, the assessee had raised additional grounds challenged the assumption of jurisdiction u/s 147 of the Income Tax Act, 1961 (the Act).
The case of the assessee was that the reassessment was framed by the Assessing Officer (AO) without jurisdiction as the statutory notice u/s 143(2) of the Act had been issued beyond the statutory period and notice was not served on the assessee and hence the assessment framed was unsustainable in law.
The CIT (A) had observed that failure to serve a notice u/s 143(2) after reopening the assessment u/s 147, or delay in service of notice u/s 143(2), is not fatal to the proceedings u/s 147.
The Tribunal observed that undisputedly, the notice was issued only after expiry of nearly six months beyond the prescribed statutory time limit.
The Tribunal observed that the Hon’ble High Court had held that in order to complete reassessment u/s 148, the issue of notice to the assessee and service of such notice upon the assessee are jurisdictional requirements that must be mandatorily complied with. The Hon’ble High Court held that they are not mere procedural requirements.
The Tribunal opined that without saying, issuance of notice beyond the prescribed statutory time limit cannot be considered to be a proper service of notice. Even under the 1922 Act, the service of notice within the mandatory period was held to be the foundation for assumption for jurisdiction for reassessment proceedings.
The Tribunal observed that in the instant case, it was undisputed that that statutory notice u/s 143(2) was issued beyond the statutory time limit for issuing such notice.
Therefore, in view of the settled law the Tribunal held that the impugned reassessment u/s 147 of the Act had became unsustainable.
Accordingly, the additional grounds raised by the assessee was decided in his favour and order of the CIT(A) was set aside the reassessment framed u/s 147 read with section 144 of the Act was quashed.
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