Notices issued for tax assessments must comply with procedural mandates of applicable law; non-compliance renders the assessment invalid.

ORDER

PER YOGESH KUMAR, U.S. JM:

The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)-3 Noida (‘Ld. CIT(A)’ for short), New Delhi dated 17/10/2024 for the Assessment Year 2016- 17.

2. Brief facts of the case are that, the assessee filed its return of income for A.Y. 2016-17 declaring loss at NIL. Regular assessment u/s 143(3) of the Income Tax Act, 1961 ('Act' for short) was finalized vide order dated 27/12/2018 accepting the loss declared by the Assessee. Thereafter, it is found from the information in possession with the department that, the assessee RBA Buildtech Pvt. Ltd. entered into LLP in the name and style of M/s AR Landcraft LLP and there were various high value transactions. Accordingly, after recording the reason for reopening a notice u/s 148 of the Act has been issued on 31.03.2021. Thereafter, vide letter dated 26.10.2021, the assessee was requested to make compliance in response to the notice issued u/s 148 of the Act. The assessee vide reply dated nil received on 25.11.2021, requested the A.O. to treat the original return of income filed as return filed in response to the notice issued u/s 148 of the Act. Assessment order came to be passed on 26/03/2022 u/s 147 of the Act by making total addition of Rs. 48,30,86,469/- u/s 68 of the Act on account of unsecured loan received from M/s Apace Builders & Contractors Pvt. Ltd. (Rs. 29,12,86,469/-), Evergreen Sunfab Pvt. Ltd. (Rs. 12,56,00,000/-) M/s JSS Buildcon Pvt. Ltd. (Rs. 15,00,000/-) and Shubhkamna Buildtech Pvt. Ltd. (Rs. 6,47,00,000/).

3. Aggrieved by the Assessment Order dated 26/03/2022, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT (A) vide order dated 17/10/2024, deleted the additions made u/s 68 of the Act. Aggrieved by the deletion of the said addition, the Department of Revenue preferred the present Appeal.

4. The Ld. Counsel for the Assessee filed an application under Rule 27 of Income Tax (Appellate Tribunals) Rules 1963 andsubmitted that the assessment framed u/s 147 of the Act is bad in law as the same has been framed on the basis of notice issued u/s 148 (Old) of the Act dated 31/03/2021 and the said notice has been dispatched on 20/04/2021, on which date the amendment introduced vide Finance Act 2020-21 w.e.f 01/04/2021 was in-force. Further submitted that the A.O. should have followed the procedure incorporated as per the said amendment in compliance with new Sections 148 , 148A and 149 of the Act, which came into effect from 01/04/2024. Thus, submitted that the assessment order passed based on the said defective notice itself is void-ab-initio. The Ld. Counsel has also relied on plethora of Judgment in support of his contentions.

5. Per contra, the Ld. Department's Representative filed written submission reads as under:-

“3. The first legal ground which is raised by respondent is related with procedure of section 148A not being followed. The said ground has already been adjudicated in appellate order and the second ground regarding jurisdiction on account of non issuance of valid notice u/s 143(2) of the Act by AO, was dismissed by CIT(A) in appellate order and is also not legally sustainable as no valid return of income could be furnished by respondent within compliance period in response to statutory notice u/s 148 of the Act at the time of assessment proceedings, as apparent from record.

4. Further, raising these grounds by respondent again at this stage are not permissible under Rule 27 of ITAT rules, as it requires fresh investigations of facts of assessment proceedings. The Supreme Court