ARPIT GUPTA,NEWYORK vs. INCOME TAX OFFICER, DCIT INTERNATIONAL, GURGAON

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ITITA 5/DEL/2026Status: DisposedITAT Delhi14 May 2026AY 2020-214 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order passed without issuing a notice under section 143(2) of the Income Tax Act, 1961, is invalid. The Tribunal noted that it is not disputed that the assessee filed a return of income in response to the notice under section 148. It was incumbent upon the AO to issue a statutory notice under section 143(2) before completing the assessment. The records did not indicate that such a notice was ever issued. The Tribunal observed that the assessee had specifically raised this objection before the DRP, which did not decide the issue. Citing the Supreme Court judgments in ACIT vs. Hotel Blue Moon and CIT vs. Laxman Das Khandelwal, the Tribunal reiterated that the issuance of notice under section 143(2) is mandatory and its complete absence renders the assessment invalid. The Tribunal further clarified that section 292BB of the Act does not cure a complete absence of notice, even if the assessee participated in the proceedings. Since the Revenue failed to produce any material to show that the notice under section 143(2) was issued, the Tribunal quashed the impugned assessment order. The addition of Rs. 2,13,000 was consequently deleted.

What were the facts?

The assessee, Arpit Gupta, a non-resident, is appealing an assessment order dated 21.11.2025 passed under sections 147(3) read with 144C(13) of the Income Tax Act, 1961, for Assessment Year 2020-21. Following a search on Omaxe Group on 14.03.2022, a notice under section 148 was issued to the assessee on 26.03.2024. The assessee filed a return of income on 28.06.2024. The Assessing Officer (AO) completed the assessment, making an addition of Rs. 2,13,000 under section 69 for unexplained investment, without issuing a mandatory notice under section 143(2). The assessee raised this objection before the Dispute Resolution Panel (DRP), but the DRP remained silent on the issue.

What were the issues?

1. Whether the assessment order passed without issuing a notice under section 143(2) of the Income Tax Act, 1961, is valid in law? (Question of law) Assessee's contentions: The assessee argued that the AO completed the assessment without issuing the mandatory notice under section 143(2). This procedural defect renders the assessment order bad in law. The assessee also raised this objection before the DRP, but it was not addressed. The assessee relied on the Supreme Court judgments in ACIT vs. Hotel Blue Moon and CIT vs. Laxman Das Khandelwal to support the contention that a complete absence of notice under section 143(2) makes the assessment invalid, and section 292BB does not cure such a defect. Revenue's contentions: The Revenue relied on the assessment order and prayed for the dismissal of the assessee's appeal.

Which sections of the Income-tax Act were involved?

Section 147,Section 144C(13),Section 132,Section 148,Section 143(2),Section 69,Section 292BB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES, NEW DELHI

Before: VIKAS AWASTHY & SANJAY AWASTHI

PER VIKAS AWASTHY, JUDICIAL MEMBER: This appeal by the assessee is directed against the Assessment Order dated 21.11.2025 passed u/s. 147(3) r.w.s 144C(13) of the Income TaxAct,1961(hereinafter referred to as ‘the Act’), for Assessment Year 2020-21.

2.

Shri Shyam Sunder Mangla, appearing on behalf of the assessee submits that the assessee is non-resident. On the basis of search and seizure operation conducted on Omaxe Group on 14.03.2022 u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), notice u/s 148 of the Act was issued to the assessee on 26.03.2024. In response to the said notice, the assessee filed return of income on 28.06.2024. Thereafter, the Assessing Officer (AO), without issuing mandatory notice

ITITA 5/DEL/2026 ARPIT GUPTA u/s 143(2) of the Act, proceeded to complete the assessment and made addition of Rs.2,13,000/- u/s 69 of the Act alleging the said amount paid by the assessee to Omaxe Group is unexplained investment. The ld. Counsel made a short submission that the AO has completed the assessment without issuing notice u/s 143(2) of the Act. The objection was raised before the Dispute Resolution Panel (DRP) highlighting that the assessment has been completed in absence of notice u/s 143(2) of the Act. However, the DRP remained silent on this issue and made no observation thereon. The ld. Counsel further submitted on merits, the assessee completely denied having made any payment to Omaxe Group. The ld. Counsel prayed for holding the assessment order passed without issuance of notice u/s 143(2) of the Act as bad in law.

3.

Per contra, Shri M.S. Nethrapal, representing the department relied on the assessment order and prayed for dismissing appeal of the assessee.

4.

Both sides heard, orders of the authorities below examined.

5.

The assessee in Ground No. 2 of appeal has raised a legal issue challenging validity of the assessment proceedings sans notice u/s 143(2) of the Act. It is not in dispute that in response to notice u/s.148 of the Act, the assessee filed return of income on 28.06.2024. Thereafter, it was incumbent upon the AO to issue statutory notice u/s. 143(2) of the Act before completing the assessment. It is not emanating from the records that the said notice was ever issued by the AO to the assessee. A perusal of the DRP directions reveals that the assessee had taken a specific objection before the DRP with regard to non-issuance of notice u/s 143(2) of the Act before framing assessment by the AO. The DRP did not decide the issue and simply observed that the domain of the DRP is only to confirm, reduce or enhance the variations proposed in the Draft Assessment Order and the Panel has no power to annul, set aside or quash a Draft Assessment Order passed u/s 144C(1) of the Act on the legal objection raised by the assessee.

6.

The Hon’ble Apex Court in the case of ACIT vs. Hotel Blue Moon, 188 Taxman 113 (SC), has held that no assessment can be made without issuing notice u/s 143(2) of the Act. The Hon’ble Apex Court in the case of CIT vs. Laxman Das Khandelwal, 108

ITITA 5/DEL/2026 ARPIT GUPTA taxmann.com 183, has reiterated that complete absence of notice u/s 143(2) of the Act makes the assessment invalid. The provisions of section 292BB of the Act do not cure complete absence of notice. Thus, the Hon’ble Apex Court in the aforesaid judgments have made unambiguously clear that issuance of notice u/s 143(2) of the Act within the prescribed time is mandatory. The provisions of section 292BB of the Act will not rescue the Department even if the assessee has participated in the assessment proceedings, where there is complete absence of notice u/s 143(2) of the Act.

7.

No material has been brought on record by the Revenue to show that notice u/s 143(2) of the Act was ever issued by the AO to the assessee. Thus, in light of the facts and documents available on record and the law expounded by the Hon’ble Apex Court on this issue, we have no hesitation in holding that the impugned assessment order passed without issuing notice u/s 143(2) of the Act to the assessee is invalid, hence, quashed.

8.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on Thursday the 07th day of May, 2026. Sd/- Sd/- SANJAY AWASTHI VIKAS AWASTHY ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi Dated: 14-05-2026 NV

ITITA 5/DEL/2026 ARPIT GUPTA Copy to: ARPIT GUPTA, 1509, SEC-9, FARIDABAD, 121007, 1 FARIDABAD-121007, HARYANA INCOME TAX OFFICER, 2 AAYAKAR BHAWAN, GURGAON, GURGAON-122002, HARYANA 3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE

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