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Judgment
Per Manish Agarwal, Accountant Member:
The present appeal is filed by the assessee against the order dated 26.06.2025 passed by ld. CIT(A)/addl./JCIT(2 )-2 , Chennai in DIN & order No. ITBA/APL/S/250/2025-26/1077851681(1) passed u/s 250 of the Inco me Tax Act, 1961 (“the Act”) arising from the Assessment Order dated 19.11.2019 passed u/s 143(3)/1 47 of the Act pertaining to assessment year 2012-13.
Brief facts o f the case are that assessee is an individual and filed his re turn of income on 31.08 .2012 declaring total income of Rs.50 ,45,440/-. Based on the information flagged on non-PAN AIR information that assessee has inve sted a sum of Rs.1 ,25,00,000/- for purchase of immovable property, re-assessment proceedings were initiated u/s 147 of the Act and notice u/s 148 was issued o n 2 9.03.2019. The assessee filed his re turn in response to the said notice o n 20 .04.2019 through letter wherein assessee has challenged the reopening of the assessment by issue of notice by non-jurisdictional AO and further stated that the return filed o n 31.08.2012 may be treated as return in response to notice u/s 148. Thereafter , the AO dispo sed of the objections raised and further on 01.10.2019, manual notice issued u/s 148 was uploaded on ITBA port al. In respo nse to the same, the assessee fur ther filed the return of income on 08.10.2019. Thereafter, the AO proceeded to complete the assessment, whereby after examining the sources thereof, made an addition of Rs.18,15,000/- towards the purchase of property for which the assessee has failed to explain the sources.
Against the said order , assessee preferred an appeal before ld. C IT(A) who dismisse d the appeal of the assessee and confirmed the additions made by AO . The ld. CIT(A) also confirmed the reopening of the assessment by rejecting the objectio ns raised by the asse ssee.
Aggrieved by the said order, assessee is in appeal before the Tr ibunal w herein in addition to the regular grounds of the taken, assessee has taken o ne additional ground No. 1 relating to the co mpletion of assessment u/s 143(3) r .w.s. 147 dated 19.11.2019 without issue of mandatory notice u/s 143(2) o f the Act and fur ther that the no tice issued u/s 148 of the Act by the Ao not having pecuniary based upon the retur ned income as per CBDT instruction No. 1/2011.
Before us, the ld. AR for the assessee submits that these grounds of appeal are purely le gal in nature and borne out from the Assessment Order itself wherein the AO never issued notice u/s 143(2 ) be fore comple tion of assessment though the assessee has filed the return of inco me in respo nse to no tice u/s 148 within the permissible time allowed. Further since the return o f income was filed having total income o f Rs. 50,45,440/-, in terms of CBDT instruction No.1/2011, pecuniary jurisdiction lies with the ACIT /DCIT and with ITO however, in the instant case the no tice u/s 148 of the Act w as issued by the ITO, Ward 2(4) Meerut. The ld. AR submits that the se grounds of appeal are purely legal in nature and should be admitted.
On the other hand, ld. Sr . DR in terms of the submission filed stated as under:
The contention of the ld. Sr. DR was that the assessee has never challenge d the legality of the order on non-issue of notice u/s 143(2) and no specific r eason/explanation was given. It is o bserved that the grounds of appeal now taken are purely legal in nature and require s no verification. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC) held that legal issue can be raised at any stage of the proceedings. Thus, by respectfully following the same, we admit the additional ground of appeal of the asse ssee . Since these grounds of appeal are related to the legality of the order passed u/s 147 r.w.s. 143(3), therefore the y are taken first for adjudication.
Heard the parties and perused the material available on record. From the perusal of the Assessment Order, it is observed that the fact of filing of return o n both the occasio ns i.e. on 20.04.201 9 and on 08.10.2019 has not bee n disputed by the lower authoritie s. It is further o bserve d from the Assessment Order that no notice u/s 143(2 ) was issued tho ugh the assessee has filed the return of income in response to notice u/s 148.
The Hon’ble Supreme Court in the case of ACIT vs. Hotel Blue Moon reported in (2010) 321 ITR 362 has he ld that the omission on the part o f revenue to issue notice u/s 143(2) canno t be a procedural irregular ity and the same is not curable. This view is further supported by the judgment of Hon’ble Calcutta High Co urt in the case of PCIT vs. Nopany & So ns (2022) 136 Taxman.com 414 (Calcutta). T he Hon’ble Delhi High Court in the case of PCIT Vs. Shree Jai Shvi Shankar Trader s Pvt. Ltd. in ITA No. 519/2015 vide order dt. 14.10.2015 reported in 383 ITR 448 (Delhi) has held as under
19.“The resultant position is that as far as the present case is concerned the failure by the AO to issue a notice to the Assessee under Section 143(2) of the Act subsequent to 16 th Dece mber 2010 when the Assessee made a statement before the AO to the effect that the original return filed should be treated as a retur n pursuant to a notice under Section 148 o f the Act, is fatal to the or der of re-assessment.”
As observed above, in the instant case, the AO has complete d the assessment without assuming the jurisdictio n by issue of no tice u/s 143(2) of the Act and therefore , the consequent Assessment Order passed u/s 143(3 ) r.w.s. 147 is bad in law and is hereby quashe d. Additio nal ground No. 1 of the assessee is allowed.
Since we have already allo wed the additional ground no. 1, the other grounds bee n taken by the assessee become academic in nature.
In the result, the appeal of the assessee is allowe d.