THE PRINCIPAL COMMISSIONER OF INCOME TAX vs. ORISSA MINING CORPORATION

Leave granted.

As similar issues arise in all these appeals, and as such they have been taken up for consideration together. Revenue has assailed different orders 2

In all these appeals, the Assessees had filed the respective Returns of their Income for the respective Assessment years under Section 139 of the Act, which were duly assessed, and assessment orders passed under Section 143(3) of the Act. Subsequently, the Revenue sought to reopen the assessments under Section 147 of the Act and issued notices under Section 148 of the Act, requiring the assesses to file the returns in the prescribed form.

In the case of Orissa Mining Corporation Ltd., the Assessee filed a response stating that its Return of Income originally filed under Section 139 of the Act, be treated as the Return of Income in response to a notice under Section 148 of the Act. In the case of Bijoy Kishore Mohanty, it is stated that the same Return of Income which had earlier been filed under Section 139 of the Act, was refiled in response to the notice issued under Section 148 of the Act.

Thereafter, admittedly no notice under section 143(2) of the Act was issued and the reassessment proceedings were commenced. During the reassessment proceedings, and notices under Section 142(1) of the Act were issued to the Assessee, seeking documents/stock information to be submitted.

Pursuant thereto, the reassessment orders were framed against the 4

Appellate Authority rejected the argument of the Assessee with regards to vitiation of the proceedings on account of failure of the Revenue to serve a notice under Section 143(2) of the Act. Appellate Authority held that since the Assessees had participated in the assessment proceedings after the issuance of a notice under Section 148, followed by a notice under Section 142(1), the Assessees could not be allowed to raise the ground of non-issuance of a notice under Section 143(2) of the Act at the appellate stage.

Aggrieved therefrom, the Assesses approached the Income Tax Appellate Tribunal. In the respective cases, the Appellate Tribunal held that the assessment proceedings stood vitiated for want of notice under Section 143(2) of the Act and, thus, set aside the reassessment orders.

Aggrieved by the decisions of the Income Tax Appellate Tribunal, the Revenue challenged the respective orders before the High Court. The High Court had rejected the challenge, and upheld the orders of Income Tax

Section 143 of the Act reads as under: “143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: — ******* (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the Assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the Assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the Assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the Assessee after the expiry of three months from the end of the financial year in which the return is furnished. (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the Assessee may produce and such other evidence as the 6

In the present case, admittedly no notice under Section 143(2) of the Act was admittedly issued. The excuse given by the Revenue is that such a notice was not required to be given and failure to give such a notice is not fatal to the reassessment proceedings. Reliance is placed by the Revenue on the provision of Section 292BB of the Act, which reads as under:- “292BB. Notice deemed to be valid in certain circumstances. Where an Assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such Assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was— (a) not served upon him; or (b) not served upon him in time; or 8

A letter given by the Assessing Officer under section 142 (1)4 of the 3 (2021) 18 SCC 691 4 Inquiry before assessment.

(1) For the purpose of making an assessment under this Act, the Assessing Officer may serve on any person who has made a return under section 115WD or section 139 or in whose case the time allowed under sub-section (1) of section 139 for furnishing the return has expired a notice requiring him, on a date to be therein specified, — (i) ***** (ii) to produce, or cause to be produced, such accounts or documents as the Assessing Officer may require, or (iii) to furnish in writing and verified in the prescribed manner information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the Assessing Officer may require: Provided that—******** (2) For the purpose of obtaining full information in respect of the income or loss of any person, the Assessing Officer may make such inquiry as he considers necessary. *******

In view of the above, we find no infirmity in the view taken by the Income Tax Appellate Tribunal, as affirmed by the High Court. The question of law raised are, thus, answered as under: (i) Section 292BB of the Act does not preclude an Assessee from raising an objection in any proceedings under the Act regarding non issuance of a notice under Section 143(2) of the Act, merely because the Assessee had appeared and cooperated during the reassessment proceedings without raising any objection with regard to non-issuance of the notice. and (ii) The revenue is not absolved of its obligation to serve a notice under Section 143(2) of the Act even if the Assessee requests that the earlier Return of Income filed under Section 139 of the Act be treated as the Return of Income filed in response to a notice under Section 148 of the Act . and (iii) Mere issuance of a letter by the Assessing Officer under section 142(1) of the Act during the course of reassessment proceedings, requiring the Assessee to explain the grounds on which re-assessment of income was proposed, does not amount to sufficient compliance of the mandatory

Consequently, we find no merit in the appeals, and the appeals are accordingly dismissed.