Amit Singhal Vs NFAC (ITAT Delhi)
No 143(2), No Reassessment: Return Filed, AO Can’t Pretend Otherwise—ITAT Delhi Quashes Entire 147 Proceedings
Assessee’s assessment for AY 2017-18 was reopened u/s 147 alleging cash deposit of ₹1 crore. Though Assessee had filed return in response to notice u/s 148 on 07.10.2021 and duly e-verified it on 22.02.2022, AO proceeded to complete reassessment u/s 144 on the premise that no valid return was filed, without issuing mandatory notice u/s 143(2), and made addition of ₹1 crore u/s 69A r.w.s. 115BBE. NFAC upheld the action holding that since return was allegedly invalid, 143(2) was not required.
ITAT Delhi rejected this approach. Tribunal noted that AO himself computed income starting from the returned income, clearly showing that return was taken cognisance of, and yet for jurisdictional requirement of 143(2), AO took a contradictory stand. Such pick-and-choose approach is impermissible. Once a return is filed in response to notice u/s 148, issuance of notice u/s 143(2) is mandatory, and failure to do so goes to the root of jurisdiction.
Relying on SC in CIT vs Laxman Das Khandelwal (108 taxmann.com 183), ITAT held that non-issuance of notice u/s 143(2) is fatal and cannot be cured. Entire reassessment framed u/s 147 r.w.s. 144 was quashed, leaving all other issues academic.
FULL TEXT OF THE ORDER OF ITAT DELHI
