Facts of the Case

The assessee, Amba Carbonisation Pvt. Ltd., is engaged in the business of manufacturing and trading of smokeless coal and coke. For Assessment Year 2013-14, the original assessment under Section 143(3) was completed on 14.10.2015. Subsequently, the Assessing Officer issued two notices under Section 148 dated 16.03.2021 and 31.03.2021 for the same assessment year on identical grounds alleging discrepancies between bank credits and declared turnover. While proceedings initiated pursuant to the first notice dated 16.03.2021 remained pending and were never formally concluded or dropped, the Assessing Officer initiated parallel reassessment proceedings by issuing a second notice dated 31.03.2021. The reassessment order dated 30.03.2022 was passed pursuant to the second notice, making an addition of ₹13,64,83,677 under Section 69A of the Act, without issuing any notice under Section 143(2) in the proceedings initiated by the second notice.

Issues Involved

Whether parallel reassessment proceedings under Section 148 can be initiated for the same assessment year without concluding the earlier proceedings, whether issuance of notice under Section 143(2) is mandatory in reassessment proceedings, and whether absence of such notice renders the reassessment order void ab initio and incapable of being cured under Section 292B.

Petitioner’s Arguments

The Revenue contended that the Assessing Officer had issued a notice under Section 143(2) dated 21.01.2022 and that the assessee had participated in the reassessment proceedings. It was argued that issuance of notice under Section 143(2) in one set of proceedings constituted sufficient compliance and that the ld. CIT(A) erred in quashing the reassessment order on technical grounds.

Respondent’s Arguments

The assessee argued that the notice under Section 143(2) dated 21.01.2022 pertained only to the reassessment proceedings initiated pursuant to the notice dated 16.03.2021, in which no assessment order was ultimately passed. The reassessment order was passed pursuant to the second notice dated 31.03.2021, in respect of which no notice under Section 143(2) was ever issued. It was further contended that two parallel reassessment proceedings are impermissible in law and that issuance of notice under Section 143(2) is a jurisdictional requirement which cannot be dispensed with.

Court Order / Findings

The ITAT Ranchi observed that it was an undisputed fact that two notices under Section 148 dated 16.03.2021 and 31.03.2021 were issued for the same assessment year. The Tribunal noted that notice under Section 143(2) was issued only in the proceedings arising from the first notice dated 16.03.2021, in which no reassessment order was passed. The reassessment order dated 30.03.2022 was passed pursuant to the second notice dated 31.03.2021 without issuance of notice under Section 143(2). Relying on the decisions of the Hon’ble Supreme Court in ACIT v. Hotel Blue Moon and CIT v. Laxman Das Khandelwal, the Tribunal held that issuance of notice under Section 143(2) is mandatory and its absence is a jurisdictional defect not curable under Section 292B. The Tribunal further held that parallel reassessment proceedings without concluding earlier proceedings demonstrate non-application of mind and are impermissible in law. Accordingly, the reassessment order was held to be void ab initio.

Important Clarification

The Tribunal clarified that participation of the assessee in reassessment proceedings does not cure the absence of a mandatory notice under Section 143(2). Further, reassessment proceedings must be carried out in a single, continuous manner and the Assessing Officer cannot initiate multiple parallel proceedings for the same assessment year on identical reasons.

Final Outcome

The appeal filed by the Revenue was dismissed, and the order of the ld. CIT(A) quashing the reassessment order passed under Section 147 of the Income-tax Act was upheld.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769079390_INCOMETAXOFFICERRANCHIJHARKHANDVS.AMBACARBONISATIONPVT.LTD.RANCHIJHARKHAND.pdf

 

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