Case law- assessment order before issuing show cause notice

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2019 Please suggest if there is any case laws related to the case explained below:

There was a Defect in issue of notice u/s 148, and 142(1) and later AO’s failure to issue notice u/s 143(2)
1.AO’s issued notice u/s 148 and u/s 142(1) on 22.03.2018, and thereafter to the address that did not pertain to the assessee. Assessee submitted his original return of income u/s 139 for AY 2011-12 and provided his address of Bengaluru in the said ITR. Assessee also updated his address in the PAN records, simultaneously upon relocating to Bengaluru in 2008. Since then, Assessee has been filing his return of Income declaring his address of Bengaluru in all ITRs.
2. The first communication assessee received about the proceeding u/s 147 was on 20.11.2018 from Income Tax Officer, Noida through email. Subsequently, the proceedings were transferred, Bengaluru, who, based on the income parameters of the assessee during PY pertaining to AY 2011-12. Upon receiving copies of notice u/s 148 and u/s 142(1) as well as intimation of transfer of proceedings from Noida, Assessee submitted his objections to these proceeding to the Bengaluru as well as to Circle 5(3)(1), and requested to the concerned AOs to drop these proceedings. However, no action was taken by the AOs on this objection.
3. Circle passed order of assessment without disposing off assessee’s objection to these proceedings. Such an act is against the principle of natural justice, and has been covered in several pronouncements of various tribunals, High Courts, and Supreme Court.
Therefore, in the absence of a valid notice and service thereof, the proceedings u/s 147 are liable to the rendered as invalid, and order u/s 143(3) is liable to be quashed.

Issuing notice u/s 143(2) is a procedural requirement, however, in the instant case, after submission of return of income in response to notice u/s 148, Learned AO failed to comply with this procedural requirement.
This lapse on the part of learned AO renders the proceedings and assessment void.

As apparent from order u/s 143(3), the Learned AO issued assessment order on 24.12.2018, however, issued a show cause notice only on 27th Dec. 2018. It, therefore, is very clear that the Learned AO had completed assessment, without giving opportunity to the Assessee to defend denial of claim u/s 54. An opportunity given after issuing the assessment order indicates that AO attempted to merely complete a procedural requirement of issuing show cause notice, and there was no real intent to either obtain or entertain assessee’s objections to such denial of claim.
Accordingly, the assessment proceedings suffer from denial of proper opportunity of being heard, and abuse of power.

Thank You.