"Assessment Order Quashed Due to Non-Issuance of Notice Under Section 143(2) (of Income Tax Act, 1961) Within Prescribed Time Limit".

The assessee filed an appeal against the order of the Commissioner of Income Tax (Appeals)-II, Indore, dated 01.11.2018 for AY 2009-10. The appeal was based on the additional ground that the assessment order was invalid due to the non-issuance of notice under section 143(2) (of Income Tax Act, 1961), 1961 by the Assessing Officer (AO). The assessee's counsel argued that this legal issue, which goes to the root of the matter, could be raised for the first time before the Tribunal and adjudicated based on the material already available on record. The CIT(DR) opposed the admission of the additional ground.

Despite several requests to the AO, the assessee could not obtain copies of the notices issued under sections 143(2) (of Income Tax Act, 1961) and 142(1) of the Act. Therefore, the assessee filed an application under the Right to Information Act, which was responded to by the ITO on 14.12.2020, providing copies of the notices dated 11.07.2016 for AY 2009-10, which were beyond the prescribed time limit. The learned counsel argued that when no notice under section 143(2) (of Income Tax Act, 1961) has been issued and served on the assessee within the prescribed time limit, the assessment order is vitiated and this defect is not curable under section 292BB (of Income Tax Act, 1961).

The CIT(DR) supported the AO's action and argued that if there is any minor defect in the notice, it is curable under section 292BB (of Income Tax Act, 1961). However, he could not produce the relevant assessment records or a copy of the notice under section 143(2) (of Income Tax Act, 1961), dated 15.09.2010, as noted by the AO in the assessment order.

The Tribunal noted that the impugned assessment order was passed on 29.12.2011, and the AO mentioned that notice under section 143(2) (of Income Tax Act, 1961) dated 15.09.2010 was duly served upon the assessee on 16.09.2010. However, in response to the assessee's RTI application, the AO provided copies of the notices under sections 143(2) (of Income Tax Act, 1961) and 142(1), both dated 11.07.2016, revealing that the AO issued said notices on 11.07.2016, much after passing the assessment order on 29.12.2011.

Following the judgment of the Supreme Court in the case of Laxman Das Khandelwal, the Tribunal held that the impugned assessment order dated 29.12.2011 passed under sections 154 (of Income Tax Act, 1961)/143(3) of the Act is not valid and sustainable, as it was passed by the AO without assuming valid jurisdiction by issuing notice under section 143(2) (of Income Tax Act, 1961) within the prescribed time limit. Thus, the impugned assessment order and all consequent proceedings and orders were quashed. The additional ground of the assessee was allowed. As a result, the appeal of the assessee was partly allowed.

1. This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-II, Indore dated 01.11.2018 for AY 2009-10. Request of assessee for admission of additional ground no. 3

2. The learned counsel submitted that the assessee a challenging the validity of assessment order on the legal ground of non-issuance of notice u/s. 143 (of Income Tax Act, 1961) (2) of the Income Tax Act, 1961 by the AO as per judgement of Hon’ble Supreme Court in the case of Collector Land Acquisition, ... vs Mst. Katiji & Ors reported in 1987 AIR 1353 the legal issue can be raised first time before the Tribunal which goes to the root of the matter and can be adjudicated on the basis of material already available on record without any other documentary evidence or exercised. The ld. CIT(DR) opposed to the

admission of additional ground. The additional ground sought to be raised by the assessee reads as follows:-

The assessment is null and void as no notice was issued u/s. 143(2) (of Income Tax Act, 1961)

within time.

3. On careful consideration of above we are of view that the assessee seeks to raise legal contention based on factual position of the case. Undisputedly, this issues was not raised before the ld. CIT(A) but as per preposition rendered by Hon’ble Supreme Court (supra) and other various judgments of Hon’ble High Court the legal issue which goes to the root of the matter and can be decided on the basis material available on record

can be raised first time before the Tribunal and the same deserve to be admitted and adjudicated. Hence additional ground of assessee, as noted above, is admitted for adjudication.

4. The learned counsel submitted that despite several request to the AO, the

assessee could not get copies of the notices issued by the AO u/s. 143(2) (of Income Tax Act, 1961) and 142(1) of the Act. Therefore the assessee filed an application under Right to Information Act, on 20.11.2020 which was replied by the ITO on 14.12.2020 providing copies of the notice u/s. 143(2) (of Income Tax Act, 1961) and 142(1) of the Act dated 11.07.2016 for AY 2009-10 which are beyond prescribed time limit. The learned counsel also drew our attention towards order sheet of the AO for AY 2009-10 wherein the date of issuance said notices has been mentioned

as 11.07.2016. The learned counsel placing reliance on the judgment of Hon’ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal dated 13.08.2019 in SLP (C) 7708 of 2019 submitted that when no notice u/s. 143(2) (of Income Tax Act, 1961) has been issued and served on the assessee within prescribed time limit then the assessment order is vitiated and this defect is not curable u/s. 292BB (of Income Tax Act, 1961).

5. Replying to the above the ld. CIT(DR) strongly supported the action of the AO and submitted that if there is any minor defect in the notice then it is curable u/s.292BB (of Income Tax Act, 1961), hence additional legal ground of assessee may kindly be dismissed. On being asked by the bench the ld. CIT(DR) shown his inability to submit relevant assessment record and submitted that despite several efforts the departmental is unable to trace and place relevant assessment records. However, he did not controvert the copies of notice u/s. 143(2) (of Income Tax Act, 1961) and 142(1) dated 11.07.2016 and order sheet of

Assessing Officer for AY 2009-10 starting from 11.07.2016.

6. First of all, we note that impugned assessment order was passed on 29.12.2011 and in the first paragraph of order the Assessing Officer mentions that notice u/s. 143(2) (of Income Tax Act, 1961) dated 15.09.2010 was duly served upon the assessee on 16.09.2010 but in reply to application of assessee under RTI Act, dated 20.11.2020 the Assessing Officer vide letter dated 14.12.2020 provided copies of the notices u/s. 143(2) (of Income Tax Act, 1961) and 142(1) both dated 11.07.2016 along with copy of order sheet from date 11.07.2016. Which reveals that the Assessing Officer in fact issued said notices on 11.07.2016 much after passing assessment order on 29.12.2011. therefore we safely presume that the Assessing Officer has not issued any notice u/s. 143(2) (of Income Tax Act, 1961) on 15.09.2010 as noted in the first paragraph of assessment order.

7. In the case of ITO vs. Laxman Das Khandelwal (supra) Hon’ble Supreme Court by referring to its own judgment in the case of ACIT vs. Hotel Blue Moon 321 ITR 362 (SC), held that the service of the notice of the assessee u/s. 143(2) (of Income Tax Act, 1961), within prescribed period of time is a prerequisite for framing valid assessment orders. However their Lordships made distinction between the cases where the assessee participated in the proceedings and notice was not served upon him, or not served upon him on time or served upon him in improper manner then the provision of secioton 292BB of the Actwould come into play in favour of the revenue. Their Lordship further explained that but in a case where there is no notice u/s. 143(2) (of Income Tax Act, 1961) was ever issued by the department then the result would be different and it has to be held that the impugned assessment order is null & void being passed without assuming valid jurisdiction by the Assessing Officer.

8. Since in the present case the ld. CIT(DR) neither produced assessment records nor produce copy of notice u/s. 143(2) (of Income Tax Act, 1961), dated 15.09.2010 as noted by the Assessing Officer in the assessment order therefore respectfully following the judgment of Hon’ble Supreme Court in the case of Laxman Das Khandelwal (supra) we hold that the impugned assessment order dated 29.12.2011 passed u/s. 154 (of Income Tax Act, 1961)/143(3) of the Act is not valid and sustainable being passed by the AO without assuming valid jurisdiction by

issuing notice u/s. 143(2) (of Income Tax Act, 1961) within prescribe time limit. Thus, impugned assessment order and all consequent proceedings and orders are quashed. Accordingly additional ground of assessee is allowed.

9. Since in the earlier part of this order we have quashed assessment order and all other consequent orders therefore grounds of assessee on merits are not being adjudicated and left open.

10. In the result, the appeal of the assessee is partly allowed.

Order pronounced in Open court on 18.05.2023.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (CHANDRA MOHAN GARG)

ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 18th May, 2023.