Notice served on CA of an assessee who was not specifically authorised to accept the same can’t be said to be served validly

It is mandatory to issue notice of hearing under section 143(2) of the Act within the stipulated period of 12 months from the end of the month in which the assessee has filed the return of income. In this case, we find that the return of income was filed on 30.10.2001, and therefore the notice under Section 143(2) for hearing of the case could have been served on or before 31.10.2002.

We find that it is an admitted fact that the notice of hearing under section 143(2) of the Act dated 29. 10.,2002 fixing the date of hearing on 14.11.2002 was served on 31.10.2002 on Shri Devang Shah, Chartered Accountant, who has audited the accounts of the assessee- firm. The CIT(A), in the second round, has sent the matter back to the AO for offering his comments on the service of notice under Section 143(2), and the AO has submitted his report vide letter dated 9.3.2006, whose extract has been reproduced by the CIT(A) in the impugned order. We find that the AO has not claimed that Shri Devang Shah, CA was authorized to receive any notice on behalf of the assessee- firm or was the representative of the assessee or that any power of attorney was executed by the assessee firm in favor of the said Chartered Accountant. In these facts of the case, it could not be said that the notice of hearing dated 29.10.2002 issued under Section 143(2) fixing the date of hearing on 14.11.2002 was validly served within the statutory period of 12 months from the end of the month in which the assessee has filed its return of income. The subsequent notice issued by the AO under section 143(2) was after the expiry of the statutory period of 12 months from the end of month in which the return of income was filed by the assessee. The assessee- firm was closed on 15.5.2003 i.e. after the end of the statutory period of valid service of notice in this case. The non-service of notice under Section 143(2) within the statutory period goes to the root of the matter, and since the jurisdiction was not validly assumed by the AO, we have no alternative but to cancel the assessment framed in this case. In Shubham Enterprises Vs. ITO, 3 SOT 250 (Allahabad Bench), the Tribunal has held that the service of valid notice under Section 143(2) is mandatory and non-compliance of the said provision within the period of 12 months from the end of the month in which the return is furnished, make the assessment null and void. Accordingly, the grounds of the appeal of the assessee are allowed.

ITAT AHMEDABAD, “B” BENCH

BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND
TEJ RAM MEENA, ACCOUNTANT MEMBER)

ITA No. 1419/Ahd/2006

[Asst. Year : 2001-2002]

M/s. Devansh Enterprise Vs. ITO

Date of Pronouncement : 01-02-2013

O R D E R

PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the assessee for the assessment year 2001-2002 is directed against the order of the CIT(A)-VI, Ahmedabad dated 28.03.2006.

2. The grounds of the appeal of the assessee are as under: