Case Number: ITA 5415/DEL/2019
Appellant: Lucky Machines Pvt. Ltd, Faridabad
Respondent: DCIT, Circle-1, Faridabad
Assessment Year: 2010-11
Case Filed on: 2019-06-17
Order Type: Final Tribunal Order
Date of Order: 2021-01-08
Pronounced on: 2021-01-08
The case of Lucky Machines Pvt. Ltd. versus DCIT Circle-1, Faridabad, pertains to the assessment year 2010-11. The appeal was filed by Lucky Machines Pvt. Ltd. on 17th June 2019 against an order dated 22nd May 2019 passed by CIT(A)-Faridabad. The central issue in this case was the reassessment proceedings initiated by the Assessing Officer and the addition of Rs. 4 lakhs under Section 68 of the Income Tax Act.
The appellant, Lucky Machines Pvt. Ltd., filed the appeal challenging the reassessment order on the grounds of improper issuance of statutory notice under Section 143(2) of the Income Tax Act. The reassessment was initiated based on the belief that the appellant had received an accommodation entry from Grace Exim Pvt. Ltd. amounting to Rs. 4 lakhs. The appellant argued that the reassessment proceedings were illegal and void ab initio due to the non-issuance of the mandatory notice under Section 143(2).
The case was heard on 4th January 2021 before a bench comprising of Shri Bhavnesh Saini, Judicial Member. The appellant was represented by Shri K.C. Singhal, Advocate, and the respondent was represented by Shri Prakash Dubey, Senior Departmental Representative.
The tribunal noted that the appellant did not press grounds 1 and 2 regarding the initiation of reassessment proceedings. However, the main contention of the appellant was the legality of the reassessment order due to the non-issuance of notice under Section 143(2). The appellant relied on the judgment of the Hon’ble Supreme Court in the case of CIT vs. Laxman Das Khandelwal, which held that the issuance of notice under Section 143(2) is mandatory for the validity of reassessment proceedings.
The tribunal examined the facts and submissions of both parties. It was found that the Assessing Officer had indeed not issued any notice under Section 143(2) during the reassessment proceedings. The tribunal referred to the Supreme Court’s judgment, which clarified that the absence of a notice under Section 143(2) cannot be cured by Section 292BB of the Income Tax Act, which only addresses defects in the service of notice but not its complete absence.
Based on this, the tribunal concluded that the reassessment proceedings were invalid and void ab initio due to the non-issuance of the mandatory notice under Section 143(2). Consequently, the reassessment order was quashed, and the addition of Rs. 4 lakhs was deleted.
The final judgment in the case of Lucky Machines Pvt. Ltd. vs DCIT Circle-1, Faridabad, resulted in the appeal being allowed. The tribunal set aside the reassessment order and deleted the additions made by the Assessing Officer. This case underscores the importance of adhering to procedural requirements, such as the issuance of statutory notices, in reassessment proceedings.
The order was pronounced in the open court on 8th January 2021 by Shri Bhavnesh Saini, Judicial Member.
Order Date: 8th January 2021
Pronounced by: Shri Bhavnesh Saini, Judicial Member
Assistant Registrar: ITAT Delhi Benches
Copy forwarded to:
Date of dictation: 04.01.2021
Date on which the typed draft is placed before the dictating member: 04.01.2021
Date on which the typed draft is placed before the other member: 04.01.2021
Date on which the approved draft comes to the Sr. PS/ PS: 04.01.2021
Date on which the fair order is placed before the dictating member for pronouncement: 04.01.2021
Date on which the fair order comes back to the Sr. PS/ PS: 04.01.2021
Date on which the final order is uploaded on the website of ITAT: 04.01.2021
Date on which the file goes to the Bench Clerk: 04.01.2021
Date on which the file goes to the Head Clerk:
The date on which the file goes to the Assistant Registrar for signature on the order:
Date of dispatch of the order:
Lucky Machines Pvt. Ltd. vs DCIT Circle-1, Faridabad – Why the Case Was Filed
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