“Ensure sufficient time for compliance with Section 143(2) notice and the mandatory issuance of valid notices under Section 142(1)(ii). Understand the legal implications and the possibility of nullifying the assessment if proper procedures are not followed. Stay informed to protect your rights in tax assessments.”
Sufficient time is required to comply with the notice issued u/s 143(2) of the Act and valid notice u/s 142(1)(ii), 142(1)(iii) has to be issued compulsorily after 143(2) notice
The Ld. Assessing officer is not justified to make assessment as he has issued notice u/s 143(2) of the Act but time period given in the notice is two days only which is too short and it was not possible to reply for the same. The notice itself is invalid and the Ld. AO has not issued valid notices u/s 142(1)(ii) and 142(1)(iii) of the Act before finalization of the assessment.
The additional ground of appeal can be raised which has not been taken with memorandum of appeal which is purely legal in nature as the assessee relies on the judgement in the case of National Thermal Power Co. Ltd. vs Commissioner of Income Tax on 4 December, 1996, 229 ITR 383 SC, (1997) 7 SCC 489.
The assessee relies on the following judgement for the assessment which has been done by the Ld. Assessing Officer u/s 143(3) of the Act dated 30.09.2019. The notice u/s 143(2) of the Act has been issued by the AO on 27.11.2019 which is just three days earlier to the passing of the order u/s 143(3) of the Act on 30.11.2019. It has been just issued like a formality but this notice has no existence in the eyes of law as sufficient time has not been provided in the notice to respond by the assessee.
Notice u/s 143(2) of the Act was issued to the assessee on 27.11.2019 for replying to the notice on 29.11.2019 which is against the principal of natural justice which clearly indicates that no notice u/s 143(2) of the Act was issued to the assessee which was a valid notice.
Ordinarily alternative remedy if not exhausted by the assessee, a writ petition is not maintainable, but in the exceptional circumstances as held by the Hon’ble Apex Court in the case of Magadh Sugar & Energy Limited, violation of principles of natural justice certainly warrants interference. This legal principle is followed by the Hon’ble High Court of Bombay in the case of Vodafone India Ltd. We have no reason to differ from the judgement of Vodafone India Ltd., since in identical circumstances where a response was sought by the Assessing Officer to the show cause notice, giving less than 24 hours, it has been held to be arbitrary resulting in palpable injustice.
In the absence of valid notice u/s 143(2), the entire assessment made by the Ld. Assessing Officer can be prayed to be made null and void.
The present case also involves the legal issue of non-service of mandatory notice u/s 143(2) of the Act which is squarely covered by the decision of the Hon’ble Supreme Court of India in the case of ACIT & Anr. Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC) wherein the Hon’ble Supreme Court has held that the issue of Notice u/s 143(2) of the IT Act is mandatory and not procedural.
In the absence of compliance of mandatory requirement of service of notice u/s 143(2) upon the assessee or its authorized person, assessment order passed by Ld. Assessing Officer is not proper and valid under law. Notice u/s 143(2) Dt. 27.11.2019 was issued but it is invalid notice.
No notice u/s 142(1)(ii) and 142(1)(iii) has been issued by the AO after issue of notice u/s 143(2) of the Act dt 27.11.2019 and without issuing these notices, the assessment made is bad in law for the purpose of making an assessment as the assessee has confirmed his filing of the original return filed in response to the notice u/s 148 of the Act and the same return is considered as filed u/s 139 of the Act. All the provision of the Act shall apply accordingly.
No enquiry u/s 142(2) has been made by the AO before finalization of the assessment dt 30.11.2019.
Assessment was framed by the AO u/s 143(3) of the Act not u/s 144 of the Act immediate after issue of notice u/s 143(2) of the Act. No valid notice issued u/s 142(1) of the Act before framing assessment on the basis of return filed by the assessee dt 15.11.2019.
One notice u/s 142(1) dt 27.11.2019 was issued to the assessee vide DIN: ITBA/AST/F/142(1)/2019-20/xxxxxxxxxxxx(1) which is final Show Cause Notice. In the notice, the AO has again stated that “It is found from AST software of the Department that you have not filed return for the A.Y. 2012-13”. It means that the AO has not considered the return filed by the assessee on 15.11.2019 and this notice seems to be issued without application of mind, without taking into cognizance the return already filed by the assessee. The notice seems to be invalid which clearly states that no notice has been issued u/s 142(1) after issue of notice u/s 143(2) of the Act dt. 27.11.2019. In both the notices, issue date is 27.11.2019, the time period provided in the notices is very less i.e. two days’ time period which is again violation of the principal of natural justice.
As such no valid notices were issued to the assessee u/s 143(2), 142(1)(ii), 142(1)(iii) and 142(2) of the Act, the assessment framed is bad in law.
The assessee can rely on the following judgement
Tata Chemicals Limited vs. Commissioner of Customs (Preventive) Jamnagar, Civil Appeals 7628-7629 of 2009 dated 14th May, 2015. Further the judgment said, if the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eye of law at all.
To complete the process of assessment u/s 143(3) of the Act it is mandatory to issue the notice u/ s143(2) of the Act and there after notices to be issued u/s 142(1)(ii) & 142(1)(iii). The law requires that assessment is to be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eyes of law at all.
In this article, a situation has been discussed if it is faced by the professionals and later they can plead before the appellate authorities.
Author can be reached at skjainlegal@gmail.com
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