INCOME TAX ACT, 1961

Sections 143(2) & 143(3)

Assessment - Validity of assessment - No notice under section 143(2) issued by AO who assumed jurisdiction under section 129 on transfer of jurisdiction -

Notice under section 143(2) was issued and served on the assessee on 28-8-2015 by the AO, i.e., ITO, Ward 6(2)(2), Bangalore. In view of the change of jurisdiction, notice under section 142(1) read with section 129 dated 6-10-2015 was issued and the same was served on the assessee on 9-10-2015 by the AO, i.e., ITO, Ward 6(2)(3) Bangalore, requiring the assessee to produce the details of profit and loss account, balance sheet, business activities, books of account, ledger extract and details of bills/vouchers, additions made to fixed deposits. Thereafter, the assessment was completed under section 143(3) on 10-3-2016 by ITO, Ward 6(2)(3). CIT(A) noted that although assessment order was passed by ITO, Ward 6(2)(3) due to transfer of case under section 129, original notice under section 143(2) was to be treated as valid notice and the assessment was valid.Held: In the present case, the original jurisdiction of the AO was ITO, Ward 6(2)(2), Bangalore, who issued notice under section 143(2) dated 28-8-2015 fixing the case for hearing on 15-9-2015. However, the assessment records were transferred vide order under section 129, to the ITO, Ward 6(2)(3), Bangalore, and thereafter notice under section 142(1) read with section 129 dated 6-10-2015 was issued and served on the assessee. Thus, it is an admitted fact that the ITO, Ward 6(2)(3) Bangalore had never issued any notice under section 143(2) to the assessee. Since there was no notice under section 143(2) issued by the AO, Ward 6(2)(3), the assessment framed consequently was bad in law. The assessment framed by the ITO, Ward 6(2)(3), Bangalore was not in order on the simple reason that this was framed without giving notice under section 143(2). The reliance placed by the DR on section 2892BB was totally misconceived.

Followed:Asstt. CIT and another v. Hotel Blue Moon (2010) 321 ITR 362 (SC) : 2010 TaxPub(DT) 1434 (SC) and Rungta Irrigation Ltd. v. Asstt. CIT in ITA No. 1224/Kol/2019 : 2019 TaxPub(DT) 6843 (Kol-Trib).

REFERRED : Tribunal in ITA No. 1163/Chd/2018 : 2019 TaxPub(DT) 6723 (Chd-Trib) and H.P. Singh & Ors. v. ITO - Order, dated 1-8-2019.

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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