Prem Lata Verma Vs DCIT (ITAT Agra)
Reassessment Quashed for Non-Issuance of Mandatory Notice u/s 143(2); Entire Addition of ₹4 Crore u/s 68 Set Aside – ITAT Agra
The Agra Bench of the ITAT allowed the assessee’s appeal and quashed the entire reassessment for AY 2016-17 on the ground that the Assessing Officer failed to issue the mandatory statutory notice under section 143(2), rendering the assessment proceedings null and void.
The case was reopened under section 147 based on election affidavit disclosures regarding large loans advanced by the assessee to group entities. The AO completed assessment under section 147 r.w.s. 144, making major additions of ₹4 crore under section 68 (unexplained loans) and ₹15 lakh as income from other sources, which were confirmed ex-parte by the NFAC-CIT(A).
Before the Tribunal, the assessee raised an additional legal ground that no notice under section 143(2) was ever issued, despite the assessee having requested that the original return filed under section 139 be treated as the return in response to notice under section 148.
The Tribunal held that:
- Issuance of notice under section 143(2) is mandatory once a return is filed, even in reassessment proceedings,
- Non-issuance of such notice is not a curable defect but a jurisdictional error, and
- Entire assessment becomes void ab initio.
Relying on the Supreme Court decision in ACIT v. Hotel Blue Moon (321 ITR 362) and the Bangalore ITAT ruling in Intact Developers Pvt. Ltd., the Tribunal held that the reassessment proceedings stood vitiated.
Accordingly, the ITAT quashed the entire assessment order without going into merits, and all additions including ₹4 crore u/s 68 automatically stood deleted. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AGRA
