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Judgment
PER RAJ KUMAR CHAUHAN, JM :
The appeal filed by Revenue is directed against the order dated 04.07.2025 passed by NFAC [hereinafter referred to as , “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [hereinafter, referred to as, “Act”] wherein addition made u/s 68 of the Act was reversed and the assessment order dated 25.12.2019 was quashed on the ground that the assessment u/s 143(3) was carried out without service of notice u/s 143(2) of the Act.
The facts in brief as culled out from the proceedings of the authorities below are that the assessee has filed a ITR for A.Y. 2017-18 on 27.10.2017, declaring total income of Rs. 6,49,117/-. The case was selected for complete scrutiny under CASS on the ground of “Large Cash Deposits during the year”. It is alleged that the notice u/s 143(2) was issued on 24.09.2018 through ITBA which was duly served upon the assessee within the statutory period, however, no compliance was made by the assessee. Accordingly, the assessment was done by the Assessing Officer making an addition of Rs. 1,33,12,520/- u/s 68 of the Act. The assessee challenged the said order before the Ld. CIT(A) who has quashed the assessment order on the ground that the notice u/s 143(2) was never served and for that reason, the order passed by Ld. AO u/s 143(3) of the Act has become illegal.
Aggrieved, the revenue is in appeal before us and raised the following grounds of appeal:
“1.That on the facts and circumstances of the case, Ld. CIT(A) has erred in ignoring the fact that the relied upon judgment of Apex Court is distinguishable from the assessee's case. The issue raised before the Apex Court was, "Whether on the facts and in circumstances of the case the issuance of notice u/s 143(2) of the Income Tax Act, 1961 within the prescribed time limit for the purpose of making the assessment under Section 143(3) of the Income Tax Act, 1961 is mandatory?" In the present case, there is no doubt about issuance of the notice as the notice u/s 143(2) of the LT. Act 1961 was issued to the assessee. As regards service of the notice, it was seen from the ITBA portal that the same was sent to the registered email of the assessee and the same was reflecting on the e-filing portal of the assessee also. In addition thereto, the issue of non delivery of notice u/s 143(2) of the 1.T. Act '1961 was not a ground of appeal raised by the assessee before the Ld. CIT(A) as per ground.”
We have heard the Ld. DR, as none appeared from the assessee’s side. The Ld. DR while relying upon the assessment order has submitted that the Ld. CIT(A) has not considered the fact that non-delivery of notice u/s 143 of the Act was not a ground of appeal raised by the assessee before Ld. CIT(A) and as such the Ld. CIT(A) has quashed the assessment order in the absence of ground therein. Ld. DR, however, could submit nothing regarding the finding returned by the Ld. CIT(A) while quashing the assessment order on the ground that the assessment u/s 143(3) has been completed in the absence of service of notice u/s 143(2) of the Act which is a legality and the assessment order was non-est i.e. void ab initio.
We have considered the submission of the DR and examined the record. We deem it appropriate to extract the finding returned by the Ld. CIT(A) in Para 6 on the jurisdictional issue extracted below as under:
“I have carefully considered the assessment order, the grounds of appeal, and the detailed submissions made by the appellant's legal heir, along with the supporting documents. A. JURISDICTIONAL ISSUE
Regarding the procedural violations, the appellant’s claim of non-service of notices under Section 142(1) and 144 is a serious allegation. While the AO's order mentions the issuance of these notices, the appellant has argued that there is no proof of service. The AO's reliance on a best judgment assessment u/s 144 without demonstrating proper notice under that section is a critical procedural flaw. Upon verification of the delivery status of various notices on ITBA, following picture emerges:
Date of Notice Nature of notice Delivery status 24.09.2018 11.10.2019 143(2)
142(1)
Bounced e-mail not sent 22.10.2019 Letter Delivered 08.11.2019 142(1) Bounced 08.11.2019 SCN Bounced 06.12.2019 SCN Delivered 25.12.2019 Assessment Order Delivered It is apparent from the above tabulated information that the notices u/s 143(2) itself has been bounced and hence not served on the appellant. Therefore, since, there is no service of notice u/s 143(2) on the appellant, the order passed u/s 143(3) of the Act becomes illegal. This findings is findings its support from the decision of the Hon’ble Punjab and Haryana High Court in the case of Aggarwal Engineering Co. Vs ACIT [2025] 175 taxmann.com 910 (Punjab & Haryana) wherein it has been held that “Where Assessing Officer passed an assessment order under section 143(3) making addition to assessee's income and it was apparent from observations in assessment that notice under section 143(2) was not issued/served before stipulated date, impugned assessment order was to be set aside”. In the regard, Hon’ble Punjab and Haryana High Court relied upon the decision of Hon’ble Supreme Court in the case of ACIT Vs Hotel Blue Moon [2010] 188 Taxman 113 (SC). Accordingly, the appellant succeeds on the jurisdictional issue and the assessment order passed by the AO is hereby quashed. ”
It is evident from the findings returned by the Ld. CIT(A) that he has very meticulously considered the material facts on record and has passed the impugned order after considering the factual material as well as legal issues involved. It is to be noticed that statutory notice u/s 143(2) of the Act has never been served before initiating and completing the assessment u/s 143(3) of the Act and for that reason, we do not find any illegality/perveristy in the impugned order passed by Ld. CIT(A). Moreover, the ground raised by the Revenue is ambiguous and, therefore, in this factual matrix of the case, does not deserve any further consideration by this Tribunal.
For these reasons, the appeal is devoid of merit and, accordingly, dismissed.