Case Law Details
Smt. Snigdha Jain Vs ACIT (Central)-2 (ITAT Indore)
The case before the Income Tax Appellate Tribunal Indore involved four appeals filed against a consolidated order of the Commissioner of Income-tax (Appeals)-3, Bhopal, arising from a consolidated assessment order passed under Sections 153A read with 143(3) for Assessment Years (AYs) 2010–11, 2011–12 and 2012–13, and under Section 143(3) for AY 2014–15. The assessments were initiated following a search conducted on 28.02.2014 in the Doshi Group, which included the assessee. The assessee, engaged in money lending and partnership activities, filed returns in response to notices issued under Section 153A for preceding years and separately for AY 2014–15.
Out of seven years covered in assessment, the Assessing Officer accepted returned income for three years without variation, while additions were made in four years (AYs 2010–11 to 2012–13 and 2014–15). Appeals filed before the Commissioner (Appeals) for these four years were dismissed through a consolidated ex-parte order due to non-prosecution, despite multiple opportunities granted over several years.
For AYs 2010–11, 2011–12, and 2012–13, the assessee submitted that non-appearance before the appellate authority was due to multiple factors, including lack of familiarity with tax procedures, the impact of the COVID-19 pandemic, and disruptions during the relevant period. It was also argued that the additions arose mainly from an initial surrender and that related matters concerning the assessee’s father-in-law were being remanded for fresh adjudication. The Department did not oppose the request for remand.
The Tribunal examined the sequence of hearings and noted that the relevant period overlapped significantly with the COVID-19 pandemic, which caused widespread disruption. It also considered the explanation regarding the assessee’s limited familiarity with tax procedures and the interconnected nature of issues with related cases. To ensure consistency and avoid conflicting outcomes, the Tribunal found sufficient cause for non-compliance and deemed it appropriate to grant another opportunity.
Accordingly, the Tribunal set aside the ex-parte order of the Commissioner (Appeals) for these three years and restored the matters for fresh adjudication. It directed that the appeals be reconsidered de novo after providing adequate opportunity of hearing and passing a speaking order in accordance with law. At the same time, to compensate for administrative efforts, the Tribunal imposed a cost of ₹5,000 per case, payable by the assessee to the Income-tax Department, with a direction that no credit or refund be claimed for such payment. The Tribunal also clarified that failure to cooperate in remanded proceedings would entitle the appellate authority to proceed appropriately based on available material.
For AY 2014–15, the assessee raised additional legal grounds challenging the validity of the assessment on jurisdictional grounds. It was contended that the notice under Section 143(2) was issued on 18.09.2015, prior to the filing of the return of income on 21.12.2015, and that no valid notice was issued thereafter. On this basis, it was argued that the assessment proceedings were void ab initio due to lack of jurisdiction.
The Tribunal noted that identical legal issues had been decided in a connected case involving the assessee’s father-in-law, where it was held that issuance of notice under Section 143(2) prior to filing of return and absence of a subsequent valid notice renders the assessment invalid. Applying the same reasoning, the Tribunal held that there was complete absence of a valid statutory notice under Section 143(2), which is a prerequisite for assuming jurisdiction to frame an assessment under Section 143(3).
Consequently, the Tribunal held that the assessment order for AY 2014–15 was void ab initio and liable to be quashed. Since the assessment itself was annulled, other grounds raised in the appeal were rendered infructuous and required no adjudication.
In conclusion, the Tribunal allowed the appeals for AYs 2010–11 to 2012–13 for statistical purposes by remanding them to the Commissioner (Appeals) for fresh consideration, subject to payment of costs. For AY 2014–15, the Tribunal allowed the appeal on legal grounds by quashing the assessment due to absence of a valid notice under Section 143(2). The order was pronounced on 27.03.2026.
Assessee was represented by Shri Arpit Gaur & Shri Vivek Garg
FULL TEXT OF THE ORDER OF ITAT INDORE
The captioned four (4) appeals have been filed by assessee against a consolidated order of first-appeal dated 21.05.2024 passed by learned Commissioner of Income-tax (Appeals)-3, Bhopal [“CIT(A)”] in Appeal Nos. CIT(A)-3, Bhopal/IT/10185, 10182, 10184 & 10183/2017-18, which in turn arises out of a consolidated assessment-order dated 29.03.2016 passed by ACIT (Central)-2, Indore u/s 153A r.w.s. 143(3) for AYs 2010-11, 2011-12 & 2012-13 and u/s 143(3) for AY 2014-15.
2. The background facts leading to these four (4) appeals are as under:
(i) A search u/s 132 of the Act was carried out by income-tax authorities on 28.02.2014 on “Doshi Group” of Indore including assessee. The assessee is a money lender as well as one of the partners in certain concerns of “Doshi Group”. Pursuant to search, the notices were issued on 08.06.2015 for framing assessments u/s 153A of preceding six (6) AYs 2008-09 to 2013-14. In response, the assessee filed returns of those six (6) years. The position of those six (6) years, as noted by AO, in Para 4 of assessment-year is as under:
(ii) Further, for AY 2014-15 relevant to the previous year 2013-14 in which search was conducted, the assessee filed return on 21.12.2015 declaring a total income of Rs. 9,88,220/-.
(iii) Ultimately, the AO framed assessments of all seven (7) years. The AO, however, passed a single consolidated assessment-order for his convenience making following note in first para of assessment-order:
“Since, there are common issues involved. this is a common order for assessment years 2008-09 to 2014-15 in the case of the assessee. The order for assessment year 2008-09 to 2013-14 are being passed u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961 (Hereinafter called the Act) and order for 2014-15 is being passed u/s 143(3) of the Act.”
(iv) Out of seven (7) years, the AO accepted returned income in three (3) AYs 2008-09, 2009-10 & 2013-14 without any variation, hence there arose no dispute for those years. However, the AO made additions in other four (4) AYs 2010-11, 2011-12, 2012-13 & 2014-15. Therefore, the assessee carried matters of those four (4) years in four (4) separate appeals before CIT(A). The CIT(A) disposed of all four (4) appeals through a single consolidated order dated 21.05.2024 dismissing all appeals.
(v) Now, the assessee has come in this bunch of four (4) appeals before us.
IT(SS)A No. 64 to 66/Ind/2024 of Three (3) AYs 2010-11, 2011-12 & 2012-13:
3. Ld. AR for assessee submitted that the Ld. CIT(A) has dismissed assessee’s appeals for non-prosecution. Para No. 2 of impugned order of first-appeals shows that the CIT(A) granted hearings to assessee on 07.09.2017, 14.02.2019, 23.08.2019, 16.01.2020 & 21.12.2020 but the assessee did not respond. On 23.12.2020, the assessee filed an application for adjournment and considering same, the CIT(A) fixed hearings on 27.01.2021 & 05.03.2021. On 04.03.2021, the assessee again filed adjournment application and considering same, the CIT(A) fixed hearings on 22.06.2021, 26.08.2021, 27.09.2021, 10.11.2021, 14.03.2022, 25.01.2023, 11.10.2023, 17.01.2024, 07.05.2024 & 20.05.2024 but still the assessee remained non-compliant. Ultimately, the CIT(A) passed ex-parte order. In so far as the reason of non-participation is concerned, the Ld. AR submitted that the assessee is a lady and not well-versed with tax procedures. Further, there was Covid-19 pandemic during this period which caused several disruptions rendering assessee unable to make representation before CIT(A). Ld. AR submitted that these are search matters and the AO has made substantial additions in the hands of assessee only for the reason that the initial surrender was made by assessee. The AO has, however, made corresponding protective additions in the hands of “Shri Hansraj Jain”, father-in-law of assessee. Since the cases of father-in-law are also being remanded to the file of CIT(A) for a fresh adjudication, these cases of assessee must also be restored at the level of CIT(A). Ld. AR asserted in open court that the assessee is ready and willing to make an effective representation and extend full co-operation to CIT(A). He prayed that, in the interest of justice and fair play, these three (3) matters must be restored at the level of CIT(A). He acknowledged that the assessee shall abide by any direction given by bench.
4. Ld. DR though dutifully supported the orders of lower authorities yet he did not show any objection against remanding to CIT(A).
5. We have considered rival submissions of both sides and perused the material on record. We find that the period in question overlapped with the Covid-19 pandemic to a large extent, which caused widespread disruption. We also take into account Ld. AR’s submission that the assessee is a lady and not well-versed with tax procedures, hence there exists sufficient cause for non-compliance. We also note that similar issues in connected cases of assessee’s father-in-law are being restored to the file of CIT(A) through a separate order of even date. Therefore, following consistency and to avoid conflicting decisions on inter-connected facts, the present matters also deserve to be restored. The Ld. AR for assessee has also assured that the assessee shall extend full co-operation in fresh proceedings. Therefore, considering these aspects, we are inclined to grant one more opportunity to assessee by way of remanding these matters to CIT(A) for a fresh adjudication. In case, however, the assessee does not fully cooperate in expeditious disposal of remanded proceedings, Ld. CIT(A) will be at liberty to take such action, apart from disposal of appeals based on material on record, as he deems fit, proper and judicious. Therefore, these matters are restored to the file of Ld. CIT(A) for adjudication de novo after affording yet another opportunity of hearing to assessee, by way of a speaking order, and in accordance with the law. However, in order to offset the revenue’s efforts in dealing these three (3) cases of assessee, we impose a small cost of Rs. 5,000/- per case to be paid by assessee to Income-tax Department through appropriate challan. The assessee shall submit a copy of duly paid challans to CIT(A) during the proceeding of fresh adjudication and shall not claim any credit or refund of such payment.
6. These three (3) appeals are accordingly allowed for statistical purposes in terms mentioned above.
ITA No. 543/Ind/2024 of AY 2014-15:
7. The assessee has raised following additional legal grounds of appeal:
“1. That, the learned AO has grossly erred, in law, in passing the Assessment Order for the relevant assessment year on the strength of an invalid Notice issued under sub-section (2) of section 143 of the Income-Tax Act, 1961 on 18-09-2015, without first having any return of income on record. Such an action of the Ld. AO has rendered the entire assessment proceedings as void ab initio, invalid, illegal and a nullity.”
2. That, the learned AO has grossly erred, in law, in passing the Assessment Order for the relevant assessment year without first issuing and serving a valid Notice under sub-section (2) of section 143 of the Income-Tax Act, 1961 subsequent to the filing of the return of income by the appellant under the provisions of section 139 of the Act. The failure to issue such notice vitiates the assessment proceedings and renders the assessment order as void ab initio, without jurisdiction, illegal and non-est in law.”
8. We have decided identical grounds in appeal No. ITA No. 542/Ind/2024 of AY 2014-15 of assessee’s father-in-law “Shri Hansraj Jain” and accepted that the AO lacked jurisdiction to frame assessment u/s 143(2) there being complete absence of a valid notice u/s 143(2). Finally, we have declared the assessment-order as void ab initio and quashed. Since the facts and law are same, the adjudication made by us in the appeal of “Shri Hansraj Jain” will apply mutadis mutandis. Accordingly, these additional grounds of assessee are allowed.
9. Since we have quashed assessment-order itself, other grounds are rendered infructuous and do not require any adjudication at this stage.
10.Resultantly, IT(SS)A No. 64 to 66/Ind/2024 are allowed for statistical purposes and ITA No. 543/Ind/2024 is allowed.
Order pronounced in open court on 27/03/2026
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