Raj Kumar Kapoor Vs Assessing Officer (ITAT Delhi)
Delhi ITAT Quashes Reassessment for Failure to Issue Mandatory Notice under Section 143(2), Even Though Return Filed under Section 148 Was Treated as Invalid
The Delhi ITAT quashed the reassessment framed under section 147 after holding that the issuance of notice under section 143(2) is a mandatory jurisdictional requirement once an assessee files a return in response to a notice under section 148, irrespective of the Revenue’s contention that such return was treated as invalid by the CPC for want of e-verification. The assessee had challenged an addition of ₹2.11 crore under section 56(2)(vii)(b)(ii) arising from the difference between the purchase consideration of an immovable property and its stamp duty valuation. However, the Tribunal admitted the additional legal ground relating to the validity of the reassessment and held that it went to the root of the jurisdiction. Relying on the Delhi High Court’s decisions in PCIT v. Dart Infrabuild (P.) Ltd. and PCIT v. Jai Shiv Shankar Traders (P.) Ltd., as well as the Allahabad High Court’s ruling in CIT v. Rajiv Sharma, the Tribunal held that non-issuance of notice under section 143(2) is not a mere procedural irregularity but a jurisdictional defect, which cannot be cured by section 292BB or by the assessee’s participation in the proceedings. Since the Assessing Officer admittedly did not issue a notice under section 143(2) after the return was filed in response to section 148, the entire reassessment proceedings were declared null and void, rendering it unnecessary to examine the merits of the addition under section 56(2)(vii)(b) or the controversy regarding reference to the DVO under section 50C(2).
