Validity of Reassessment of Non notice under section 143(2) issued

Where AO has failed to issue notice under section 143(2) before completion of assessment, addition made under section 68 during reassessment proceedings was deleted because issuance of notice under section 143(2) is a mandatory obligation on the part of AO.

Original return of assessee-firm was filed under section 139(1) which was subject matter of scrutiny assessment and assessment under section 143(3) was completed. Thereafter, AO issued re-assessment notice under section 148 proposing addition under section 68. Assessee contended that assessment was completed without issuing notice under section 143(2).

Held: Since no notice under section 143(2) was issued by AO before completion of assessment, therefore, addition made under section 68 was liable to be deleted.

Decision: In assessee’s favour.

IN THE DELHI HIGH COURT

S. RAVINDRA BHAT & SANJEEV SACHDEVA, JJ.

Pr. CIT v. Gravity Systems (P) Ltd.

ITA Nos. 896 & 899/2017

27 October, 2017

Appellant by: None

Respondent by: Rahul Chaudhary, Sr. Standing Counsel with Sanjay Kumar, Advocate, P.C. Yadav, Advocate

The Revenue is aggrieved by the order of the ITAT which directed the deletion of some amounts under section 68 of the Income Tax Act by the lower authorities.

The ITAT premised its decision on the circumstance that no notice was issued under section 143(2), before the completion of assessments.

The ITAT followed the view in Pr. CIT v. Jai Shiv Shankar Traders (P) Ltd. (2016) 383 ITR 448 (Del). That decision has further been affirmed in Pr. CIT v. Silver Line (2016) 383 ITR 455 (Del).

As a consequence, no substantial question of law arises.

The appeals are dismissed.