Reassessment Fails Without 143(2): Delayed Return in response to notice under section 148 Cannot Be Ignored

 

 

In a crucial ruling reinforcing procedural safeguard in reassessment proceedings, the Tribunal has held that a return filed in response to notice under Section 148 cannot be treated as non-Est merely because it is delayed.

More importantly, it was held that failure to issue notice under Section 143(2) makes the entire reassessment void ab initio.

This decision highlights that procedural compliance is not optional in reassessment-it is mandatory.

Background of the Case

The case involved reassessment proceedings initiated under Section 147 on account of sale of immovable property.

The Assessing Officer (AO) computed Long-Term Capital Gain of ₹20,16,567 and completed the assessment under Sections 147 read with 144/144B.

The assessee had filed a return in response to notice under Section 148, but the same was filed belatedly.

The AO treated this return as non-est (invalid) and proceeded with the assessment without issuing notice under Section 143(2).

Core Issue Before the Tribunal

The key issue was whether:

–  A delayed return filed under Section 148 can be ignored as non-est, and
–  Whether reassessment can be completed without issuing notice under Section 143(2)

This issue directly impacts the validity of reassessment proceedings.

Tribunal’s Key Finding: Delayed Return Is Still Valid

The Tribunal rejected the AO’s approach and held that:

•  A return filed in response to Section 148

•  Even if delayed

•  Remains a valid return, as long as it is filed during the pendency of assessment proceedings

The Tribunal further clarified that such a return must be treated as a return filed under Section 139.

Mandatory Requirement of Notice under Section 143(2)

Once the return is treated as valid, all procedural requirements applicable to a regular return come into play.

This includes the mandatory issuance of notice under Section 143(2).

The Tribunal categorically held that:

–  Notice under Section 143(2) is not a mere procedural formality-it is a jurisdictional requirement

Failure to issue this notice strikes at the root of the assessment.

Non-Issuance of 143(2): Fatal Defect

The AO’s failure to issue notice under Section 143(2) was held to be a jurisdictional defect, not a curable irregularity.

Such a defect cannot be rectified or overlooked at any stage of proceedings.

As a result, the reassessment order was declared void ab initio, meaning invalid from the very beginning.

AO Cannot Bypass Procedure by Calling Return “Non-Est”

The Tribunal made it clear that the AO cannot avoid statutory compliance by simply branding the return as “non-est”.

Once a return is on record, it triggers the requirement of due process.

Allowing otherwise would defeat the safeguards built into the law.

Practical Implications for Taxpayers

This ruling has wide applicability in reassessment cases.

Taxpayers should carefully verify:

•  Whether return was filed in response to Section 148

•  Whether notice under Section 143(2) was issued thereafter

•  Whether proper opportunity of hearing was granted

If notice under Section 143(2) is missing, it becomes a strong ground to challenge the reassessment.

Key Legal Takeaway

The decision reinforces two critical principles:

•  Delayed return under Section 148 is still valid if filed during proceedings

•  Notice under Section 143(2) is mandatory and jurisdictional

Conclusion

The Tribunal’s ruling is a strong reminder that procedural safeguards are integral to tax administration.

Reassessment proceedings cannot bypass statutory requirements under the pretext of delay or technical interpretation.

For taxpayers and professionals, this judgment offers a powerful defence against defective reassessments.

In tax law, jurisdiction begins with procedure-and if procedure fails, the entire assessment collapses.

The copy of the order is as under:

1774871419-BBNVkQ-1-TO n