Pahwa Buildtech Private Limited Vs DCIT (ITAT Delhi)
Delhi ITAT: Reassessment Quashed for Complete Absence of Section 143(2) Notice – Presumption Under Evidence Act Cannot Cure Jurisdictional Defect
The Delhi ITAT quashed the reassessment framed under Sections 147/143(3) holding that issuance of notice under Section 143(2) is a mandatory jurisdictional requirement, and its complete absence renders the assessment invalid. The reassessment had resulted in an addition of ₹35 lakh under Section 68 towards unexplained share application money.
Significantly, in the remand proceedings, the AO himself admitted that no Section 143(2) notice could be found in the ITBA case history, while the original manual assessment records were also unavailable. The CIT(A), nevertheless, sustained the assessment by invoking a presumption under Section 114 of the Indian Evidence Act, 1872 that the notice had been issued.
The ITAT rejected this approach and relied upon the Supreme Court judgment in CIT v. Laxman Das Khandelwal [2019] 417 ITR 325 (SC), reiterating that Section 292BB can cure defects in the service of a notice, but cannot cure the complete absence of issuance of the notice itself.
Since the Department could produce no evidence that a Section 143(2) notice was ever issued, the Tribunal held that its issuance could not merely be presumed. The reassessment was consequently quashed as invalid, and all other jurisdictional and merits grounds were rendered academic.
Cases Discussed
