ITAT Delhi Sets Aside Reassessment over Missing Section 143(2) Notice

 

Recently, ITAT Delhi Sets Aside Reassessment Over Missing Section 143(2) Notice by holding that Procedural Lapse is fatal Even Without Objection During Assessment proceeding by the Assessee.

Let us have a Short Overview of the case:

In the case of Shri Raj Kumar vs. DCIT (ITA No. 4080/Del/2024), the assessee challenged the reassessment framed under Section 147/143(3) for the Assessment Year 2011–12, contending that “no notice u/s 143(2) of the Act has been served on the appellant on filing of return in response to notice u/s 148 of the Act.”

The assessee argued that the assessment was “without jurisdiction and deserve[d] to be quashed as such.”

The CIT(A), while admitting that “notice u/s 143(2) of the Act was not issued in this case,” still dismissed the ground raised.

He held that “issuing notice u/s 143(2) of the Act was not required in this case since the appellant did not raise this contention during the course of assessment proceedings” and had participated without objection. He placed reliance on CIT vs. Ram Narayan Bansal and Atsushi Yoshida vs. ACIT to support his view.

The Tribunal disagreed with the findings of the CIT(A) and emphasized that “the law of the land mandates that an assessment made without the issuance of the jurisdictional notice is invalid.” It relied on the Supreme Court judgment in CIT vs. Lakshman Das Khandelwal (417 ITR 325), which held that “Section 292BB does not save complete absence of notice” and “the Section is not intended to cure complete absence of notice itself.”

The Tribunal quoted from the Supreme Court’s ruling: “The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee… It is, however, to be noted that the Section does not save complete absence of notice.” It was held that “for Section 292BB to apply, the notice must have emanated from the department,” and not merely inferred from participation.

In conclusion, the Tribunal held that “in the facts of the present case where no notice under section 143(2) of the Act was issued against the return of income filed by the assessee, the assessment framed was invalid.”

Accordingly, it allowed the appeal and quashed the reassessment order.

The copy of the order is as under:

1744646240467