Income Tax Appellate Tribunal - Jaipur
Mahendra Kumar Sethia, Jaipur vs Ito (T & J), Jaipur on 31 May, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM
vk;dj vihy la-@ITA No. 186/JP/2017
fu/kZkj.k o"kZ@Assessment Year : 2007-08
Shri Mahendra Kumar Sethia cuke The ITO, (T&J),
O-1-B, Hospital Road, Vs. O/o The Pr. Commissioner of
Jaipur- 302004. Income Tax-2,
Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIDPS 1739 G
vihykFkhZ@Appellant izR;FkhZ@Respondent
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s Assessee by : Shri Esha Kanungo (Adv.)
jktLo dh vksj ls@ Revenue by : Smt. Seema Meena (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 28/05/2018
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 31/05/2018
vkns'k@ ORDER
PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 11.01.2017 of CIT (A), Ajmer for the assessment year 2007-08. The assessee has raised the following grounds:-
"1. Under the facts and circumstances of the case the Learned CIT(A) has erred in passing the order ex-parte without serving the notice to the assessee.ITA No. 186/JP/2017
Shri Mahendra Kumar Sethia vs. ITO (T&J)
2. Under the facts and circumstances of the case the Learned CIT(A) has erred in not giving the opportunity to the assessee of being heard.
3. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making disallowance of 25% of alleged bogus purchases thereby making addition of Rs. 1,53,87,305/-.
4. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing."
2. Since Ground No. 1 was not raised by the assessee before the authorities below, therefore, the assessee has filed an application under Rule 11 r.w.s. 22 of the ITAT Rules, 1963 for admission of the additional ground which reads as under:-
"Under the facts and circumstances of the case the Learned CIT(A) has erred in upholding the action of the Learned Assessing officer in completing the assessment u/s 147/143(3) of the income Tax Act, 1961 without issuing notice u/s 143(2) of the Income Tax Act, 1961 before completion the assessment."
3. We have heard the ld. AR as well as the ld. DR on admission of additional ground and considered the relevant material on record. There is no dispute that the additional ground raised by the assessee involves pure question of law and does not require any investigation of facts or 2 ITA No. 186/JP/2017 Shri Mahendra Kumar Sethia vs. ITO (T&J) any fresh facts to be verified but the facts already available on record of the Assessing officer are required to be considered in order to adjudicate the additional ground raising the issue of validity of assessment proceedings without issuing notice U/s 143(2) of the Act. Therefore, In view of the decision of Hon'ble Supreme Court in case of National Thermal power Co. Ltd. vs. CIT 299 ITR 383 and in view of the fact that for adjudication of question law no new facts are required but the facts which are on record to be considered, we admit the additional ground raised by the assessee.
4. On merit of the additional ground:- The ld. AR of the assessee has submitted that the assessment order in question has been passed by the AO without issuing notice U/s 143(2) and therefore, the impugned assessment is not sustainable in law when the AO has proceeded to pass the order without issuing the mandatory notice U/s 143(2) of the Act. The ld. AR of the assessee has relied upon the decision of Hon'ble Supreme Court in case of ACIT vs. Hotel Blue Moon 321 ITR 362 as well as the decision of the Hon'ble Allahabad High Court in case of CIT vs. Rajeev Sharma 336 ITR 678. The ld. AR has also relied upon a series of decisions of Hon'ble High Courts on 3 ITA No. 186/JP/2017 Shri Mahendra Kumar Sethia vs. ITO (T&J) the point that without issuing notice U/s 143(2) of the Act the completion of assessment/ reassessment is not valid.
5. On the other hand, ld. DR has submitted that when the assessee did not raise this ground before the AO and allowed the AO to complete assessment proceedings then, the assessee cannot take this objection that the assessment order passed by the AO is illegal. The ld. DR as also produced the assessment record as per directions of the Bench and admitted the fact that there is no notice U/s 143(2) on the assessment record.
6. Having considered the rival submissions as well as careful perusal of record we note that the Assessing Officer has not stated either in the assessment order or in the order sheets of the assessment proceedings that any notice U/s 143(2) of the Act was issued to the assessee. Even the assessment record produced before us by the ld. DR does not contain any notice issued U/s 143(2) of the Act. Thus, it is clear that there is no notice U/s 143(2) of the act issued by the AO and the reassessment proceedings in the case of the assessee were competed without issuing a notice U/s 143(2) of the Act. The Hon'ble Supreme Court in case of ACIT vs. Hotel Blue Moon(supra) has held that failure on the part of the assessing authority to issue notice U/s 4 ITA No. 186/JP/2017 Shri Mahendra Kumar Sethia vs. ITO (T&J) 143(2) cannot be a mere procedural irregularity and the same is not curable. It is not a mere formality but it gives the jurisdiction to the Assessing officer to complete the assessment U/s 143(3) of the Act therefore, non issuance of notice U/s 143(20 vitiates the assessment proceedings. In view of the decision of the Hon'ble Supreme Court in case of ACIT Vs. Hotel Blue Moon (supra) as well as the decision of Hon'ble Allahabad High Court in case of CIT vs. Rajeev Sharma (supra) the assessment proceedings completed without issuing notice U/s 143(2) of the act are void ab-initio and liable to be quashed. Accordingly, we quash the impugned assessment being illegal and void ab-initio. Since, we have quashed the assessment as invalid, therefore, we do not propose to go into other grounds raised in this appeal.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 31/05/2018.
Sd/- Sd/-
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(Bhagchand) (Vijay Pal Rao)
ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur
fnukad@Dated:- 31/05/2018.
*Santosh.
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Mahendra Kumar Sethia, Jaipur.
2. izR;FkhZ@ The Respondent- ITO,(T&J), Jaipur.5 ITA No. 186/JP/2017
Shri Mahendra Kumar Sethia vs. ITO (T&J)
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File {ITA No. 186/JP/2017} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 6