ACE Mega Structure (P) Ltd., a company based in Gurgaon and assessed under the Income Tax Act, was subjected to a search on its premises by the tax authorities. During the search, various incriminating documents were seized, and subsequently, a survey was conducted under Section 133A of the Act. The company filed its return of income on 25.09.2015, disclosing a total income of Rs. 38,96,010/-.
The Income Tax department issued a notice under section 143(2) of the Act on 07.10.2016, which was after the due date for issuing the notice by 30.09.2016. In response to the assessment order passed under Section 143(2), the company filed an appeal before the Commissioner of Income Tax (Appeals) or CIT(A).
In the appeal, the CIT(A) found that the notice under Section 143(2) was issued after the due date and set aside the assessment order. The Income Tax department filed an appeal before the Income Tax Appellate Tribunal (ITAT), which dismissed the appeal filed by the revenue. The ITAT relied on the decision of the Supreme Court in CIT v. Laxman Das Khandelwal (order dated 13.08.2019 CIVIL APPEAL Nos.6261-6262 OF 2019) and observed that Section 292BB of the Act seeks to cure only the infirmities in the manner of service of notice and not the complete absence of notice itself.
The ITAT held that the notice in the present case was issued after the due date and declined to interfere with the order of the CIT(A), thereby ruling in favour of the assessee, ACE Mega Structure (P) Ltd.
It is noteworthy that ACE Mega Structure (P) Ltd. is a company based in Gurgaon, and its tax matters were being dealt with by a CA firm in Gurgaon. It is important for companies to engage the services of a competent CA firm for tax-related matters to avoid such legal entanglements. A good CA firm in Gurgaon can help businesses comply with the provisions of the Income Tax Act and avoid penalties for non-compliance.
In conclusion, the decision of the ITAT in ACE Mega Structure (P) Ltd. v. JCIT (C) 2023 TAXSCAN (ITAT) 696 (dated 10.03.2023) highlights the importance of issuing notices under the Income Tax Act within the due date. The decision also emphasizes the need for businesses to engage the services of a competent CA firm in Gurgaon to handle their tax-related matters