ACIT Vs Logic Control Pvt. Ltd. ( ITAT Delhi)
No 143(2) Notice = No Jurisdiction: Reassessment quashed as void ab initio; Dart Infrabuild applied; Revenue appeal dismissed
In this Revenue appeal against Logic Control Pvt. Ltd. for AY 2011-12, Tribunal examined the core jurisdictional challenge relating to non-issuance of statutory notice u/s 143(2) in a reassessment framed u/s 143(3) r.w.s 147. The case was reopened vide notice u/s 148 dated 29.03.2018 alleging non-filing. In response, assessee filed return on 11.09.2018 declaring ₹58.92 lakh, which AO processed u/s 143(1). AO thereafter completed reassessment on 14.12.2018 by making additions aggregating ₹1.89 crore & finally determining income at ₹2.48 crore .
During hearing, it was undisputed that no notice u/s 143(2) was ever issued before the reassessment was finalised. Revenue argued that since the return was filed beyond the time prescribed in the 148 notice, issuance of notice u/s 143(2) was not required. Tribunal rejected this contention, noting that AO had accepted & acted upon the very return filed u/s 148 while computing income, thereby triggering the mandatory requirement to issue notice u/s 143(2).
Tribunal relied extensively on the Delhi High Court judgment in PCIT Vs Dart Infrabuild Pvt Ltd (460 ITR 532)—quoted at length between pages 4 to 10 of the order—which holds that once AO considers the return filed in response to 148, issuance of notice u/s 143(2) becomes jurisdictional & indispensable; absence of such notice renders reassessment invalid. Tribunal also observed that Section 292BB cures only defects of service, not defects of issuance, & therefore cannot salvage an assessment where notice was never issued.
Hotel Blue Moon (SC) was affirmed as correctly relied upon by CIT(A) since its ratio on mandatory issuance of 143(2) applies equally to reassessment u/s 147 when AO chooses to proceed u/s 143(3). The Tribunal held that the Revenue’s attempt to distinguish Blue Moon on the ground that it related to block assessments was misplaced.
Since the factual matrix was identical to Dart Infrabuild, Tribunal held that the reassessment suffered from a jurisdictional defect, was void ab initio & liable to be quashed. Grounds 1 & 2 of Revenue were dismissed & with that the appeal itself failed.
Accordingly, the Revenue’s appeal was dismissed in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
