Diamond Realcon Pvt Ltd Vs ACIT (ITAT Delhi)
Unsigned 148 Notice = No Jurisdiction: 143(2) Before Reasons? Fatal Error—ITAT Quashes Entire Reassessment
Tribunal considered Assessee’s challenge to reassessments u/s 147 for AYs 2011-12 & 2012-13 which culminated in additions u/s 68 & 69 for alleged unexplained cash credits & unexplained investments. For AY 2011-12, Tribunal found from the record that the notice u/s 148 dated 31.03.2018 bore no manual or digital signature, rendering it non est. Relying on Prakash Krishnavtar Bhardwaj (Bom HC), Tribunal held that an unsigned notice cannot confer jurisdiction & therefore the entire reassessment stood quashed.
On merits also, Tribunal noted that Assessee had filed confirmations, ITRs, bank statements & audited financials of lenders & loans were fully repaid within 60 days through banking channels—facts ignored by AO. Tribunal applied the Delhi ITAT ruling in Dazzling Constructions Pvt Ltd, holding that repayment & complete documentation establish identity, creditworthiness & genuineness, & no obligation existed to prove “source of source” for loan receipts. Additions of Rs.2.75 crore u/s 68 & Rs.7.20 crore u/s 69 were deleted.
For AY 2012-13, Tribunal noted another fatal jurisdictional defect: reasons recorded for reopening were not provided before issuing notice u/s 143(2). Even if reasons were later given with notice u/s 142(1), the statutory sequence was violated. Tribunal held that issuing s.143(2) before communicating reasons deprives Assessee of the right to object to jurisdiction, vitiating reassessment. Assessment as well as CIT(A)’s order were set aside. With jurisdiction annulled, additions of Rs.4.29 crore u/s 69 required no adjudication.
