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Facts
The assessee filed an original return of income. The case was reopened under Section 147 of the Income Tax Act, 1961, and a notice under Section 148 was issued. The assessee filed a return in response to this notice, but it was beyond the stipulated time. The Assessing Officer treated the return as non-est and made an addition for unaccounted purchases. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the reassessment order was passed without issuing a mandatory notice under Section 143(2) of the Act, which renders the reassessment order bad in law and void ab initio. Relying on various High Court and Supreme Court judgments, the Tribunal stated that the non-issuance of this notice is not a curable defect.
Key Issues
Whether a reassessment order passed without issuing a notice under Section 143(2) is bad in law, especially when a belated return was filed in response to a Section 148 notice.
Sections Cited
147, 148, 143(2), 144B, 69C, 115BBE, 40A(3), 151
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Income Tax Appellate Tribunal, AGRA (DB
Before: SHRI M BALAGANESH & SHRI SUNIL KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (DB) BENCH, AGRA BEFORE: SHRI M BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 447/Agr/2025 Assessment Year: 2015-16 Parmanand Vs. ITO, Ward, 2(1)(2) 34/52/2, Balkeshwar, Agra, Agra. U.P-282004 PAN : AFQPP4444Q (Appellant) (Respondent) Assessee by Dr. Rakesh Gupta & Shri Yas Jindal, CA Department by Shri Anil Kumar, Sr. DR Date of hearing 21.01.2026 Date of pronouncement 17.04.2026 ORDER PER: SUNIL KUMAR SINGH, JM. This appeal has been preferred against the impugned order dated 17.07.2025 passed in appeal No NFAC/2014-15/10160376 by the ld. Commissioner of Income Tax(Appeals)/ NFAC Delhi (hereinafter referred to as the “CIT(A) u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2015-16, wherein ld CIT has dismissed assessee’s appeal against the addition of Rs. 1,19,17,354/- made on account of unaccounted purchases vide, assessment order dated 28.03.2022 passed u/s. 147 r.w.s. 144B of the Act. 2. The brief facts state that assessee filed original return of income on 22.09.2015, declaring total income of Rs. 8,34,960/-. Subsequently, the case was reopened u/s. 147 of the Act and the notice u/s. 148 dated
ITA No.447/Agr/2025 30.03.2021 was issued and served upon the assessee. Ld assessing officer observed that no return was filed in response thereof. Statutory notice u/s. 142(1) was issued. Assessee, vide reply dated 21.03.2022, contended before the ld A.O. that the return in response to notice u/s. 148 of the Act was filed on 25.12.2021. Ld A.O brushed this plea of the assessee aside, stating that the fact was neither mentioned in the assessee’s earlier replies nor the return was visible on e-filing. A.O., further observed that there was no point in intimating A.O. at Agra about the filing of return as the notices were issued from the faceless unit. Ld, assessing officer, treating the return as non-est, completed the assessment proceeding and made addition of Rs. 1,19,17,354/- vide assessment order dated 28.03.2022 passed u/s. 147/144B of the Act. First appeal of the assessee against the assessment order was dismissed by the ld CIT(A). 3. Assessee, originally raised seven grounds and later on, two additional legal grounds vide application dated 16.12.2025, which stand admitted in view of Hon’ble Apex Court’s decision in NTPC Ltd 229 WR 383. All the grounds raised under appeal are re-produced as under: “1. That the Ld. CIT (A), NFAC has erred both on facts and in law in rejecting the appellant specific ground that since notice u/s 143(2) of the I.T Act has not been issued, the entire Assessment Order is bad in law and without Jurisdiction and hence deserves to be cancelled. 2. That since the Assessment Order has not been passed u/s 144 of the I.T. Act, the return filed in response to notice u/s 148, though filed beyond time allowed in notice u/s 148, has to be taken as considered by the Assessing officer and hence the Assessment Order passed without issue of notice u/s 143(2) deserves to be cancelled.
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ITA No.447/Agr/2025 3. (i). That the Ld. CIT(A) has erred both on facts and in law in confirming the addition of Rs 1,19,17,354/- made by the Assessing Officer u/s 69C r.w.s 115BBE for so called unexplained expenses being the amount of purchases not being accounted for in the books of accounts.
(ii). That the Ld. CIT (A) has erred both on facts and in law in rejecting the appellant's specific submission and the documents filed that neither any purchases have been made from M/s GDP Agro and Food Products Pvt.Ltd., Gwalior nor any payment made to M/s GDP Agro & Food Products Pvt. Ltd., Gwalior and hence question of any so called payment treated as unexplained expenses does not arise. (iii). That the transactions as recorded in the documents supplied to the assessee along with Show Cause Notice fully matched with transactions of purchases made by the assessee from another concern M/s Trading Co., Gwalior and M/s Sudharaj Trading Co., Gwalior and are duly accounted for in the books of accounts. All the supporting documents i.e. Road permit (Form No. XXXVIII, issued from Department of Commercial Taxes, Govt. of U.P.), purchase invoices, Bilty and Dharam Kanta Receipt in support of the purchase made from M/s Aditya Trading Co and M/s Sudharaj Trading Co. were filed. All the payments towards purchases from these parties were directly made to these Parties through RTGS. The Ld. CIT (A) has erred both on facts and in law in rejecting the entire submission and the documents filed. (iv). That the Ld. CIT(A) has erred both on facts and in law in rejecting the appellant's specific submission that the Assessing Officer has legally erred in rejecting the Affidavit filed by the Assessee and the specific request made for cross examination of the party from whose premises the documents found have been used against the assessee. (v). That considering the facts of the case the addition of Rs 1,19.17.354/- made by the Assessing Officer made u/s 69C for so called unexplained expenses should have been deleted by Ld CIT(A). 4. That the addition of Rs 1.19.17.354/- made u/s 69C r.w.s 115BBE is also wrong, bad in law, without Jurisdiction as on perusal of the Show Cause Notice issued, the reasons recorded (though not provided) perhaps are for disallowance u/s 40A(3) of the I.T. Act whereas in the Assessment order the addition has been made u/s 69C of the I.T. Act. This is apparently bad in law and not permissible under the Act. Reasons recorded have to be read as it is. No substitution/deletion/addition in the reasons recorded is permissible under the law. On this ground also the addition deserves to be deleted.
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ITA No.447/Agr/2025 5. That the Assessment Order passed u/s 147 r.w.s 144B of the I.T. Act is wrong, bad in law and without jurisdiction as the notice u/s 148 of the I.T .Act dated 30.03.2021 has been issued by JAO Ward 2(1)(1), Agra whereas the Assessment Order has been passed by NFAC, Delhi. 6. That the Assessment Order passed u/s 147 r.w.s 144B of the I.T. Act is wrong, bad in law and without Jurisdiction since the reasons recorded for initiating proceedings u/s 147 of the I.T. Act and the Sanction given u/s 151 has not been provided to the assessee before passing the Assessment Order. 7. That the assessee craves leave to alter, amend, add or delete any or all the ground of appeal before or at the time of hearing and the above grounds are prejudicial to each other. Additional Grounds: 8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by Ld. Assessing Officer under section 147/144B, as the very assumption of jurisdiction under section 147 is bad in law and void ab initio, inter alia, for the reason that the reopening was initiated on the basis of mechanical and invalid approval, and without complying with mandatory conditions prescribed under section 147 to 151 of the Income Tax Act, 1961. 9. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned order passed under section 147/144B, despite the fact that the reasons recorded by Ld. AO are not in accordance with law."
Ld counsel for the assessee submitted that the first ground raised by the assessee deals with the preliminary legal issue and does not require any further facts to be gone into and goes to the root of the matter. Hence, prayed that this legal issue may be decided first. 5. The ground No 1 relates to the non-issuance of notice u/s. 143(2) of the Act before completing the assessment and goes to the root of the matter. We deem it fit to adjudicate upon this issue first.
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ITA No.447/Agr/2025 6. Ld counsel for the assessee has submitted that assessee had filed return of income on 25.12.2021 in response to the notice dated 30.03.2021 issued by A.O. u/s. 148 of the Act. Ld AR further submitted that the reassessment proceedings have been completed without issuing notice u/s.143(2) of the Act. Ld AR submits that the return was e-verified on 17.03.2022, stating that CBDT, vide Notifications No. 5/2022 dated 29.07.2022 clarified that where the return was filed on or before 31.07.2022, the earlier time limit of 120 days would continue to apply for e- verification. Ld. AR, thus, submits that non issuance of notice u/s 143(2) when the return of income was filed on 25.12.2021, renders the impugned reassessment order bad in law. Ld AR referred the following case law in support of his arguments: 1. CIT vs. Laxman Das Khandelwal, (2019) 310 CTR (SC) 8. 2. Rajender Kumar Sehgal vs. ITO, (2019) 414 ITR 286 (Del). 3. PCIT vs. Paramount Biotech Industries Ltd., (2017) 398 ITR 701 (Del). 4. PCIT vs. Shri Jay Shiv Shankar Traders Pvt. Ltd., (2016) 383 ITR 448 (Del). 5. CIT vs. Rajeev Sharma, (2011) 336 ITR 678 (All). 6. PCIT vs. Staunch Marketing Pvt. Ltd., (2018) 404 ITR 299 (Del). 7. Anil Agarwal HUF vs. ITO, ITA No. 2594/Del/2024, dated 30.07.2025 (ITAT Delhi). 8. Deepak Kumar Gupta vs. ITO, ITA No. 4528/Del/2024, dated 17.10.2025 (ITAT Delhi). 9. PCIT & Anr vs. Ashish Gupta, ITA No 02/2026, Allahabad High Court order dated 09.01.2026.
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ITA No.447/Agr/2025 7. Ld Sr DR for the revenue has submitted that the assessee was required to file the return within 30 days from the date of notice u.s.148, which was issued on 30.03.2021. However, assessee filed belated return on 25.12.2021, which was treated to be non est. In such circumstances, the notice u/s. 143(2) of the Act was not required to be mandatorily issued and supported the impugned order. 8. It is admitted fact that on reopening of assessee’s case u/s. 147 of the Act, notice u/s. 148 dated 30.03.2021 was issued seeking assessee to file return within 30 days. The assessee filed return of income belatedly on 25.12.2021 which was e-verified on 17.03.2022 in accordance with the clarification provided in CBDT Notification No. 5/2022 dated 29.07.2022 as per the answer given by the deptt. FAQ No. 6 which is at Page 163 of assessee’s supplementary paper book.
Hon’ble Supreme Court in Laxman Das Khandelwal (supra) has held that issue of notice u/s. 143(2) for the completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non-issuance thereof is not a curable defect. Hon’ble Court observed that even in the case of block assessment u/s. 158 BC, it has been so held by the Apex Court in the case of ACIT & Anr V. Hotel Blue Moon(2010) 229 CTR(SC) 219.
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ITA No.447/Agr/2025 10. Hon’ble Delhi High Court in Staunch Marketing Pvt Ltd (supra) had an occasion to examine identical situation and held as under:
“14. In any event, factually the assessee filed a return pursuant to notice issued under s. 148 of the Act, notwithstanding that it may not have filed a return in the first place under s. 139 of the Act for the assessment year in question. Once a return is filed, notice under s. 143(2) of the Act to the assessee is mandatory prior to framing an assessment. The question of framing an assessment ex parte without even issuing a notice under s. 143(2) of the Act did not arise. The mandatory nature of that requirement is settled not only by the decision of the Supreme Court in the case of Asstt. CIT vs. Hotel Blue Moon (supra) but also by a decision of this Court in Principal CIT vs. Shri Jai Shiv Shankar Traders (P) Ltd. (2016) 282CTR (Del) 435: (2016) 129 DTR (Del) 63:(2016) 383 ITR 448 (Del). 15. For all the aforementioned reasons, the question framed does not arise In the present appeal and is declined to be answered. In any event, the Court does not find any substantial question of law arise from the impugned order. The appeal is, accordingly, dismissed.” 11. In all the above cases referred by the ld AR, the same ratio has been followed, holding that the assessment/reassessment finalized/completed without issuance of notices u/s. 143(2) of the Act, when the return of income was filed; render the reassessment order as bad in law. 12. We notice that ld CIT(A), while passing impugned order, has observed that the assessee belatedly filed the return on 25.12.2021, which cannot be treated as valid return as third provisio to section 148, inserted by the Finance Act, 2023, does not alter the fact that even under the pre- existing law, the belated filing of the return cannot compel the assessing officer to issue a notice u/s. 143(2). Assessee’s ld representative countered this observation by submitting that aforesaid CBDT FAQ’s on e-verification, clarified that where return was filed on or before 31.07.2022, the earlier
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ITA No.447/Agr/2025 time limit of 120 days for e verification applies. He, thus, submits that the return filed by the assessee was a valid return under the law. Ld AR, further refers CBDT Notification No. 2/2024 dated 31.03.2024 which clarifies that where return is uploaded and e-verified within prescribed time, the date of uploading shall be treated as the date of furnishing the return. Therefore, according to ld AR this clarification applies mutatis mutandis to returns filed prior to 01.04.2024. Ld AR, thus submits that the Amendment in section 148 by insertion of Third Proviso by the Finance Act, 2023, is clarificatory in nature. The assessee had a vested right to file a belated return, prior to the insertion of this proviso. We agree with the logical deduction given by the ld AR and are of the considered view that the principle of harmonious construction shall apply in the facts of the instant case so as to interpret the amended provision vis-a-vis CBDT’s clarifications through FAQ supported with CBDT notification No. 2 of 2024 dated 31.03.2024 as noted hereinabove harmoniously. 13. Very recently Hon’ble jurisdiction High Court of Judicature at Allahabad has given a decision on the identical issue, vide order dated 09.01.2026 passed in ITA No 2 of 2026, Ashish Gupta(supra), where in, the appeal was preferred on five questions of law. The relevant first question is reproduced as under: “Whether on the facts circumstances and in law, the ld ITAT has erred in law in not appreciating that the return of income filed by the assessee in compliance to notice u/s. 148 of the Income Tax Act, 8 | P a g e
ITA No.447/Agr/2025 1961, on 25.05.2021 was neither filed within the stipulated time period of 30 days from the issue of notice u/s. 148 of the Act and was neither e-verified nor condonation was allowed, and thus there was no requirement for issue of notice u/s. 143(2) of the Act for invalid (non-est) return?” The relevant para 7 & 8 reads as under: “7. The objection raised by the ld counsel for the revenue that the assessee had not confirmed the return filed in response to the re-assessment notice issued u/s. 148 of the Act, we find, the ld CIT(Appeals) and the tribunal have dealt with that issue and found that the assessing officer has made the computation of the income of the assessee not on the strength of any other material but primarily on the strength of the facts disclosed in the physical return filed. Inferentially, it may be observed, the reason of the ld CIT(Appeals) as confirmed by the Tribunal appears to be that though the return filed through physical mode may not have been confirmed through electronic mode at the relevant time, at the same time, substantially, procedural requirement stood fulfilled in as much as the assessing officer himself made the computation of income on the basis of the figures disclosed in the return filed through the physical mode. Further, the Tribunal had noted, upon such defect being pointed out, the next date itself, the assessee e-verified the same. In Asst Commissioner of Income Tax and Anr Vs. Hotel Blue Moon, (2010) 3 SCC 259, it has been held, notice u/s. 143(2) is not procedural and omission to serve that notice is not curable requirement of its issuance cannot be dispensed with. 8. In view of such facts, we find no ground to offer interference on the hair-splitting objection raised by the revenue. As to any other defect in the conclusion reached by the CIT(Appeals) and the Tribunal in absence of any question framed or objection raised, we are not inclined to offer our minds any further.” 14. On the basis of aforesaid discussion and respectfully following the above quoted decisions, we hold that in the instant case, reassessment dated 28.03.2022 completed u/s. 147/144B of the Act for A.Y. 2015-16, without issuance of notice u/s. 143(2) of the Act to the appellant assessee, is bad in law and void ab initio and consequently the same is hereby 9 | P a g e
ITA No.447/Agr/2025 quashed. Since the reassessment has been quashed, allowing the first preliminary legal ground of assessee’s appeal, there is no need to adjudicate the remaining grounds of both fact and law, and are left open. 15. In the result, assessee’s appeal is allowed. Order pronounced on - 17.04.2026
Sd/- Sd/- (M BALAGANESH) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 17.04.2026 *Aamir Siddiqui, PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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