Seema A Talesara Vs ITO (ITAT Mumbai)
ITAT Mumbai held that passing of assessment order without mandatory service of notice under section 143(2) of the Income Tax Act is unjustified. Accordingly, assessment order being passed sans serving notice u/s 143(2) of the Act, is liable to be quashed.
Facts- During the course of scrutiny assessment, AO observed that Assessee has shown long term capital gain income of Rs.97,15,890/- and the same has been claimed as exempt. The said long term capital gain income is earned on account of sale of shares of M/s Kadwani Securities Ltd and Lifeline Drugs and Pharma Ltd. AO on the basis of report of the Kolkata Investigation Wing, treated the said shares as penny stock as ingenuine and manipulated and ultimately, treated the sale price of the said share amounting to Rs.1,01,69,601/- as un-explained cash credit and added the same in the income of the Assessee.
Commissioner (A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- The service through affixture remained un-proved/un¬substantiated, as no efforts were made to serve the notice u/s 143(2) of the Act through ordinary process and there is no specific order for substituted service by the AO and even otherwise the affixture as appears in report of Inspector (supra), is also not as per the procedure established by law. Hence we don’t have hesitation to hold that in the instant case, infact no service of notice 143(2) of the Act has been made and/or attributed. We also observe that Hon’ble Apex Court in the case of CIT Vs Laxman Das Khnadelwal {417 ITR 325 (SC) has clearly held that absence of service of notice, cannot be cured by invoking the provisions of section 292BB of the Act.
