Assessment Framed Without Issuance of Notice Under Section 143(2) is Invalid: ITAT

The Income Tax Appellate Tribunal (ITAT), Kolkata, quashed an assessment that was framed without issuing the notice under section 143(2) of the Income Tax Act.

The assessee company, Goal Oriented Trade Link Pvt. Ltd., filed its Income Tax Return (ITR). The AO received information from the office of ADIT that alleged that the assessee had received accommodation entries. Based on this, the case was reopened under section 147, and the AO issued notice under section 148 of the Income Tax Act.

The assessee was asked to furnish the return of the ITR within 30 days. The assessee submitted the return after this specified due date but within the extended time as per the Taxation and Other Laws (Relaxation of Certain Provision) Ordinance, 2020. The assessment was framed under section 147, where the AO made additions of Rs 4,80,50,000 as unexplained money and Rs 69,968 under section 14A read with Rule 8D of the IT Rules.

The assessee filed an appeal before the CIT(A), arguing that the AO framed the assessment without issuing notice under section 143(2). However, the CIT(A) rejected the appeal, observing that the assessee failed to file the ITR within the specified time of 30 days.

The Tribunal disagreed with the CIT(A), holding that the assessee had filed the return in response to notice under section 148 within the time extended by the TOLA. The tribunal also said that the issuance of notices under section 143(2) is a mandatory requirement.

The ITAT cited previous rulings where it was held that the issuance of notice under section 143(2) is mandatory if the AO does not agree with any part of the return filed by the assessee or wants to make an assessment different from what was declared.

The ITAT quashed the assessment, ruling that an assessment framed without issuing notice under section 143(2) of the Income Tax Act is invalid and bad in the eyes of the law.