Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 313900 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-05-2025
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2017-2018
Judgement Text
"ITA No.5954/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.5954/Del/2024 [Assessment Year : 2017-18] Magic Solutions 188, Pocket-7, Sector-02 Rohini, Delhi-110085 PAN-ABCFM9977B vs ITO Ward-35(5), Delhi APPELLANT RESPONDENT Appellant by Shri S.K.Gupta, CA Respondent by Shri Sanjay Kumar, Sr. DR Date of Hearing 09.04.2025 Date of Pronouncement 07.05.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed at the instance of the assessee seeking to assail the First Appellate order dated 15.10.2024 passed by Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“CIT(A)”] under s. 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 26.12.2019 passed under s. 144 of the Act relevant to assessment year 2017-18. 2. As per the grounds of appeal, the assessee has challenged the additions of INR 16,08,510/- made under s. 69A r.w.s. 115BBE of the Act. 3. The assessee has raised a primary challenge in the course of hearing that the assessment framed under s. 144 of the Act dated 26.12.2019, giving rise to the cause of action in the present appeal, itself is bad in law and nonest. 3.1. To support such challenge, the Ld. Counsel for the assessee adverted to the assessment order and submitted that the assessment order has been framed without any reference to notice issued under s. 143(2) of the Act. The assessment has been framed by issuance of notice under s. 142(1) of the Act ITA No.5954/Del/2024 Page | 2 without cognizance of the fact that the assessee had e-filed return of income and therefore, it was incumbent in law for AO to issue notice under s. 143(2) of the Act. The Ld. Counsel for the assessee pointed out that in pursuance of notice issued under s. 142(1) of the Act, the assessee e-filed return of income on 15.10.2019. This fact of filing of return of income was duly intimated to the concerned authority on 18.10.2019 for which acknowledgement generated by the e-portal of the Department is placed on record. 3.2. As further stated, the assessee repeatedly intimated the fact of filing of return of income to the AO and hard copy of the income tax return was also forwarded. The AO however issued a show cause notice dated 18.12.2019 wherein it wrongly alleged towards non-compliance of filing of return of income. 4. As per the Paper Book placed before the Tribunal, it is self-evident that the AO was repeatedly made aware of the filing of the return of income but however, the AO proceeded on the premise that the assessee has not filed return of income for AY 2017-18 in question and based on such illusion, the AO also initiated penalty proceedings under s. 271F of the Act. Hence, the contention of the assessee is that the AO failed to issue notice under s. 143(2) of the Act having regard to the wrong belief entertained by him that no return of income has been filed and proceeded to frame assessment under s. 144 of the Act without the aid of notice under s. 143(2) of the Act. 5. The Hon’ble Delhi High Court in the case of Pr.CIT-1, Delhi vs M/s. Dart Infrabuild (P) Ltd. [2024] 460 ITR 532 (Del.) held that notice under s. 143(2) is a mandatory requirement regardless of whether the assessment has been framed under s. 144 of the Act and also regardless of the position that return of income has been filed belatedly but before completion of assessment. Similar view has been expressed in following judicial precedents:- (i) CIT vs Kalyan Samiti in ITA No.696/2015 (Delhi); (ii) Shaily Juneja vs ACIT W.P.(C) No.10298/2022; and (iii) Primary Real Estate Investments vs Dy CIT W.P.(C) No.9705/2023 ITA No.5954/Del/2024 Page | 3 6. The Hon’ble Supreme Court in the case of Laxman Das Khandelwal in CA No.6261-6262 of 2019 dated 13.08.2019 has observed that failure to issue a notice under s. 143(2) rendered the assessment order void, even if the assessee has participated in the assessment proceedings. Section 292BB of the Act does not save complete absence of notice. To invoke s. 292BB, the notice must have been necessarily emanated from the Department. It is only the defect in the manner of service of notice that the section seeks to cure. Section 292BB of the Act is not intended to cure complete absence of notice of itself. 7. In view of the aforesaid delineations, the impugned assessment order passed without issuance of notice under s. 143(2) of the Act is bad in law and thus quashed. This being so, the additions under challenge are a nullity in law and thus do not call for any adjudication. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 07th May, 2025. Sd/- *Amit Kumar, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER ASSISTANT REGISTRAR ITAT, NEW DELHI "
AI Insights
The case involves Magic Solutions, the appellant, contesting an assessment order for the assessment year 2017-18, which was passed under section 144 of the Income Tax Act, 1961, by the Income Tax Officer, Ward-35(5), Delhi. The primary contention was the absence of a notice under section 143(2) during the assessment proceedings, despite the assessee having e-filed their return. The Tribunal referenced several judicial precedents, including a significant ruling by the Delhi High Court, which emphasized the mandatory nature of a section 143(2) notice, regardless of the assessment being framed under section 144 or the belated filing of the return. The Tribunal found that the failure to issue this notice rendered the assessment order void, leading to the quashing of the order and the additions made therein.
