Addition of Undisclosed Income under the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA
[Before Shri A. T. Varkey, Hon’ble Judicial Member and Dr. M. L. Meena, Hon’ble Accountant Member]
I.T.A. No. 1030/Kol/2019
Assessment Year: 2015-16

Sahidur Rahman
[PAN: ACYPR 0547 F]

Appellant

vs

DCIT, Circle – 3(1), Malda

Respondent

Date of Hearing (Virtual) 26.07.2021
Date of Pronouncement 28.07.2021
For the Appellant Shri Sumit Ghosh, AR
For the Respondent Smt. Ranu Biswas, Addl. CIT
ORDER

This is an appeal preferred by the assessee against the order of the Ld. CIT(A), Jalpaiguri dated 22.01.2019 For AY 2015-16.

2.The assessee has raised a legal issue regarding non issue of notice u/s 143(2) of the Income Tax Act, 1961(hereinafter referred to as the ‘Act’) by the DCIT, Circle – 3(1), Malda who passed the assessment order u/s 143(3) of the Act on 20.12.2017 which omission according to Ld. A.R. is an incurable defect and goes to the root of the assessment order. According to the Ld. AR, from a perusal of the assessment order, page 1 itself it is clear that notice u/s 143(2) was issued on 19.09.2016 by the ITO, Ward – 3(2), Malda and thereafter the case of the assessee was transferred to DCIT by ITO, Ward – 3(2) on 04.04.2017 and there is also no mention of DCIT having issued any notice u/s 143(2) of the Act. According to the Ld. AR, the last date for issue of notice u/s 143(2) by the Assessing Officer was on 30.09.2016.

3.We have heard both the parties and perused the material available on record. The assessee is engaged in the business of supply of labour for civil works. Facts pertaining to the dispute is that the AO taking note of the mismatch in 26AS and the initial Audit Report filed by the assessee detected a difference of Rs. 42,30,786/-. Therefore, the AO asked for explanation of the assessee and pursuant to same, the assessee admitted that there was mistake while filing the return of income and accepted that the gross payment he received was to the tune of Rs. 5,93,71,757/- (as shown in 26AS) and not Rs. 5,51,40,970/- as shown in First Audit Report.

3. However, before we part in respect of the legal issue raised by the assessee we note that the assessee had taken the objection before the DCIT i.e.at the first instance itself before the AO that the DCIT has not issued notice u/s 143(2) of the Act and thus has challenged the jurisdiction of the DCIT to frame the assessment u/s 143(3) of the Act.

4. In the result, the appeal of the assessee is treated as allowed for statistical purpose.
Order is pronounced in the open court on 28th July, 2021.

Please find attached the enclosed file for the full judgement