Kanak Kumar Jain Vs DCIT (ITAT Jodhpur)
ITAT Jodhpur held that issuance of re-assessment notice under section 148 of the Income tax Act to non-existent firm and to deceased partners is invalid issuance of notice. Accordingly, order passed thereon is liable to be quashed.
Facts- After receiving information, proceedings u/s. 147 of the IT Act was initiated. Accordingly, a notice u/s. 148 dated 08.03.2018 was issued in the name of non-existent firm and not properly served thereon. The said reassessment proceeding was based on ADIT (Inv.)-II, Udaipur report issued after survey u/s 133A on dated 03.12.2016.
AO without rejecting an objection for issuance of notice under section 148 to non-existent assessee and not following the procedure u/s 189(3) of the Act, arbitrarily completed an assessment order on 24.12.2018 without impleading the legal representatives of deceased partners of firm and made estimated addition of Rs. 20,94,152/-. On appeal, CIT (A)-1, Udaipur confirmed the validity of issuance and service of notice and addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that in this case the AO issued notice u/s 148 on the appellant firm, when the objection was filed about non existence of the firm, he without dealing with the objections filed by the LH of one of the partner finalized the assessment in the name of the instant appellant. No notice(s) seem to had been issued on the legal heir of all the deceased partners and even all of them were not impleaded as legal heirs. Therefore, there have been lapses in issuing notice u/s 148 and in service of such notice. Therefore issue of valid notice and its valid service are sine qua non for reassessment proceedings which are lacking in this case. Under these facts and circumstances we are of the view that ld. CIT (A) was required to consider the application of the Appellant u/s 154 of the Income tax Act, 1961 in true spirit of law in which she failed. We set aside the order of the ld. CIT (A) and quash the notice u/s 148 and subsequent proceedings.
