Case Law Details
Osian Stock Broking Pvt. Ltd. Vs ITO (ITAT Kolkata)
In the recent case of Osian Stock Broking Pvt. Ltd. Vs ITO, the Income Tax Appellate Tribunal (ITAT) Kolkata nullified an addition due to the late issuance of Notice under Section 143(2) of the Income Tax Act. The ITAT concluded that the Notice was sent beyond the specified deadline, making the assessment void ab initio.
Analysis: The ITAT Kolkata carefully examined the arguments put forth by both the assessee and the Departmental Representative (DR). The crux of the dispute revolved around the timing of the issuance of the Notice under Section 143(2). While the notice was signed on the last permissible date, it was emailed to the assessee well past the due date. The assessee’s representative argued, citing precedent from the Hon’ble Jurisdictional High Court, that a notice is considered issued only when it is set in motion for delivery to the assessee, not when it is signed.
The DR argued that the notice under Section 148 was issued within the timeline, and therefore, the subsequent notice under Section 143(2), despite its delay, should not affect the validity of the assessment. However, the ITAT relied on various high court decisions to establish that even in reassessment proceedings under Sections 147/148, timely issuance of notice under Section 143(2) is mandatory, and non-compliance cannot be rectified through the deeming provision under Section 292BB.
Conclusion: In its judgment, the ITAT reiterated the necessity of abiding by statutory timelines in the tax assessment process. The decision affirms the principle that due process and compliance with procedural law are as important as the substantive aspects of tax law. This decision offers important insights into the interpretation of statutory timelines and the consequences of their non-compliance.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
