PINKI JATWANI,FARIDABAD V. INCOME TAX OFFICER (WARD 2(1)), FARIDABAD

ITA 3026/DEL/2024

AI Insights

The case involves Pinki Jatwani, a proprietorship earning income from business and rental sources, who appealed against the reassessment order for the Assessment Year 2015-16. The reassessment was initiated based on an incorrect assumption that the assessee had not filed her income tax return for the said year and had made a significant investment in the Piyush Group. The primary legal contention was the non-issuance of a notice under section 143(2) of the Income-tax Act, 1961, which the assessee argued was mandatory and a procedural lapse that invalidated the reassessment. The ITAT, referencing decisions from the Supreme Court and the Punjab and Haryana High Court, agreed with the assessee, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34894 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs. Hotel Bluemoon, CIT v. Cebon India Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: CHARITRA KUMAR
• Keywords: Procedural lapse
• Section: 147; 148; 144; 292BB; 143(2)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 3026/Del/2024 (Assessment Year: 2015-16) Pinki Jatwani, H. No. 1497, Sector- 14, Haryana Vs. Income Tax Officer, Ward-2(1), Faridabad PAN: ALBPG2330B Assessee by : Shri Charitra Kumar, CA Revenue by: Shri Sanjay Kumar, Sr.DR Date of Hearing 11/02/2025 Date of pronouncement 05/03/2025 O R D E R 1. The appeal in ITA No.3026/Del/2024 for AY 2015-16 arises out of the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024- 25/1065350445(1) dated 03.06.2024 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 dated 25.03.2022 (hereinafter referred to as ‘the Act’) by NFAC, Delhi (hereinafter referred to as ‘ld. AO’). 2. Though the assessee has raised several grounds of appeal, I find adjudication of ground No. 2 goes to the root of the matter wherein, the jurisdictional notice u/s 143(2) of the Act not being issued is being challenged. 3. I have heard the rival submissions and perused the material available on record. The assessee is a proprietorship earning income from business and have been regularly filed her return of income together with the audited business statement in the past. The assessee also derived rental income ITA No. 3026/Del/2024 Pinki Jatwani Page | 2 and income from other sources. Based on incorrect assumption of fact that assessee had not filed income tax return for AY 2015-16, the case of the assessee was sought to be reopened vide issuance of notice u/s 148 of the Act on the pretext that assessee had made investment of Rs. 24,38,508/- in Piyush Group. Similar assessment for AY 2014-15 was also reopened for the very same investment made in Piyush Group of Rs. 24,38,508/-. The assessee objected to the validity of reopening of stating that the ld AO was not even aware as to which year the information relating to investment was made by the assessee pertains to. The assessee sought for the reasons recorded for reopening the assessment and partial reasons were submitted to the assessee. Notice u/s 148 of the Act stood issued to assessee on 31.03.2021. The assessee filed return of income in response to notice u/s 148 of the Act on 18.02.2022 which fact is evidenced from pages 16 to 19 of the Paper Book, which also contains computation of total income declaring taxable income of Rs. 2,94,540/-. The assessee challenged before the ld CIT(A) that after the filing return on 18.02.2022 that no notice u/s 143(2) of the Act was issued by the ld AO. This was considered to be a some procedural lapse by the ld NFAC/ CIT(A) which is evident from page 5 of the order of the ld CIT(A). This goes to prove the ld CIT(A) had categorically admitted the fact that no notice u/s 143(2) of the Act was indeed issued to the assessee in the present case. Now question that arises for my consideration is whether framing of reassessment order without issuance of notice u/s 143(2) of the Act would prove fatal to the assessment proceedings or not. This issue is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Hotel Bluemoon reported in 321 ITR 362 wherein it had been held that issuance of notice u/s 143(2) of the Act after filing of return by the assessee is mandatory in nature and non issuance of same becomes a jurisdictional defect and would become fatal to the entire reassessment/ assessment ITA No. 3026/Del/2024 Pinki Jatwani Page | 3 proceedings. Further Hon’ble Punjab and Haryana High Court in CIT v. Cebon India Ltd reported in 347 ITR 583 had held that Section 292 BB of the Act does not save the defect of non issuance of notice u/s 143(2) of the Act as absence of notice per se was not curable u/s 292BB of the Act. Accordingly, ground No. 2 raised by the assessee is hereby allowed. Non issuance of notice u/s 143(2) of the Act makes the entire reassessment proceedings void ab initio. 4. Since, the entire reassessment is quashed on this limited legal ground, the other grounds raised by the assessee need not be adjudicated and they are left open. 5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 05/03/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 05/03/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "