This case involves the appellant, Ananya Portfolio Pvt Ltd, New Delhi, contesting the reassessment notice’s validity issued by the Income Tax Officer (ITO), Ward-2(4), New Delhi, for the assessment year 2010-11. The case was filed on February 22, 2019, and the final tribunal order was pronounced on February 20, 2020.
The proceedings were conducted at the Income Tax Appellate Tribunal (ITAT), Delhi ‘SMC’ Bench, before Shri H.S. Sidhu, Judicial Member. This judgment addresses the issues surrounding the validity of the reassessment notice issued under Section 148 of the Income Tax Act, 1961.
Ananya Portfolio Pvt Ltd
1594, MJ Building, 3rd Floor, Shop No. 3, Bhagirath Place, New Delhi – 110006
PAN: AAHCA8899B
Income Tax Officer, Ward-2(4), New Delhi
The appellant was represented by Sh. Ravi Pratap Mall, Advocate, and Sh. Shayam Sunder, Advocate. The respondent was represented by Sh. Pradeep Singh Gautam, Sr. DR.
The appeals filed by the assessee were directed against different orders passed by the Commissioner of Income Tax (Appeals)-I, New Delhi, on September 10, 2018, and September 7, 2018, respectively, in relation to the assessment years 2009-10 and 2010-11. The assessee raised various grounds on legal issues as well as on merits.
The appellant’s counsel argued that the reassessment proceedings were invalid due to the improper issuance of notice under Section 143(2). The counsel also argued that the initiation of proceedings under Section 147 based on information found during a search was incorrect and that only proceedings under Section 153C could be initiated based on such information.
During the hearing, the appellant’s counsel presented additional grounds of appeal, arguing that the notice under Section 143(2) was not validly issued. The appellant’s counsel cited the Hon’ble Delhi High Court’s decision in the case of Director of Income Tax vs. Society for Worldwide Interbank Financial Telecommunications, which held that a notice under Section 143(2) must be issued after the AO has examined the return filed by the assessee.
The respondent’s representative argued that sufficient opportunity had been provided to the assessee and that the reassessment proceedings were valid. The respondent’s representative submitted that the additional grounds raised by the assessee should not be admitted as they were not raised before the CIT(A).
The tribunal observed that the notice under Section 143(2) was issued on the same day the assessee responded to the notice under Section 148, which indicated a lack of proper examination of the return by the AO. The tribunal cited the Hon’ble Delhi High Court’s decision, which held that such a notice is invalid and renders the reassessment proceedings invalid.
Based on the facts and the legal precedents, the tribunal quashed the reassessment proceedings and deleted the additions made by the AO. The tribunal also admitted the additional grounds of appeal raised by the assessee, considering them to be legal in nature.
The tribunal allowed the appeal of the assessee, quashing the reassessment proceedings and declaring the notice under Section 143(2) as invalid. The tribunal emphasized the importance of following proper procedures in issuing notices for reassessment.
Order pronounced in the open court on February 20, 2020.
Sd/-
(H.S. Sidhu)
Judicial Member
Dated: February 20, 2020
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
Dates:
1. Date of dictation: February 20, 2020
2. Date on which the typed draft is placed before the dictating Member: February 20, 2020
3. Date on which the typed draft is placed before the other Member: February 20, 2020
4. Date on which the approved draft comes to the Sr. PS/PS: February 20, 2020
5. Date on which the fair order is placed before the Dictating Member for pronouncement: February 20, 2020
6. Date on which the fair order comes back to the Sr. PS/PS: February 20, 2020
7. Date on which the final order is uploaded on the website of ITAT: February 20, 2020
8. Date on which the file goes to the Bench Clerk: February 20, 2020
9. Date on which the file goes to the Head Clerk: February 20, 2020
10. Date on which the file goes to the Assistant Registrar for signature on the order: February 20, 2020
11. Date of dispatch of the Order: February 20, 2020
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