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Facts
The assessee filed an original return for AY 2013-14. Subsequently, the Assessing Officer reopened the case based on the sale of immovable property, issuing a notice under Section 148 of the Act. The reassessment was completed, and an appeal was filed before the CIT(A).
Held
The Tribunal held that a fresh return is not required if the assessee informs the AO to treat the earlier return as filed in response to the Section 148 notice. The Tribunal found that no notice under Section 143(2) was issued, rendering the reassessment invalid.
Key Issues
Whether the reassessment is invalid due to the non-issuance of a notice under Section 143(2) of the Income Tax Act, 1961, when the assessee requested their earlier return be treated as filed in response to a notice under Section 148.
Sections Cited
143(2), 148
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 06.11.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2013-14.
The ld. AR Shri Y. Sridhar, C.A. requested to take up ground No. 3 as preliminary issue for adjudication as it goes to the root of the matter. Having no objection from the ld. DR Ms. Gouthami Manivasagam, Addl. CIT, we take up ground No. 3 as preliminary issue for adjudication.
The ld. AR submits that the ld. CIT(A) erred in sustaining the reassessment, which was completed without jurisdiction as no valid notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued or served on the assessee, which is mandatory in reassessment proceedings. The ld. AR drew our attention to para 10 of the impugned order and argued that the ld. CIT(A) without considering the statutory provision, held notice under section 143(2) of the Act can be issued only when the assessee files return of income. He vehemently argued that the said findings is incorrect as the assessee filed a letter requesting the Assessing Officer to treat the return filed earlier as having been filed in pursuance to the notice under section 148 of the Act. He refers to the orders of the Tribunal at page 23 of the paper book and submits that the Delhi Benches of the Tribunal clearly held that the return filed by the assessee in the original assessment proceeding must be taken as the return filed also in response to the notice under section 148 of the Act with rider that date of filing of such return would be the date on which the assessee wrote to the Assessing Officer requesting him to treat the original return as the return filed under section 148 of the Act vide para 8 of the said order in the case of ITO v. R.K. Gupta [2008] 115 ITD 384 (Delhi). Further, he drew our attention to page 29 of the paper book and submits that the Delhi Benches of the Tribunal in the case of Raj Kumar Prop. M/s. Raj Cotton & Oil Mills v. DCIT in for AY 2011-12, held that it is now well settled that the assessee need not file fresh return on receipt of notice under section 148 of the Act if he feels that the earlier return should be treated for the purpose of reassessment, he may inform the Assessing Officer of his decision to treat the previous return as the return filed in response to the notice and then the previous return shall be treated as the fresh return submitted in response to the notice. He vehemently argued that the issue raised in ground No. 3 is covered by the orders of the Delhi Benches of the Tribunal and prayed to quash the reassessment.
The ld. DR vehemently opposed the submissions of the assessee and submits that no such claim made before the Assessing Officer. Further, she drew our attention to the sub-section 2 of section 148 of the Act clearly mandates the assessee to file return of income in response to the notice under section 148 of the Act, she argued that the Delhi Tribunal orders as relied on by the assessee are not applicable as they were relating to the AY 1995-96 and 2011-12 and prayed to dismiss the ground raised by the assessee.
Having heard both the parties, we note that the assessee filed original return of income on 29.09.2013 declaring a loss for AY 2013-14. According to the assessee, the assessee was in the impression that its original return was accepted by the Respondent- Revenue since no notice issued or any order of assessment received by the assessee. We note that the return filed by the assessee was reopened on noticing sale of immovable property for an amount of ₹.7,00,00,000/- vide notice under section 148 of the Act on 26.03.2018. The Assessing Officer completed the reassessment by determining long term capital gain at ₹.2,05,60,486/- by raising demand of ₹.41,12,097/- as tax payable. Admittedly, assumption of jurisdiction by the Assessing Officer for non-issuance of notice under section 143(2) of the Act was not raised before the Assessing Officer, but, however, it was raised before the ld. CIT(A), wherein, the ld. CIT(A) sought remand report on the same issue. Further, the ld. CIT(A) held vide para 8 of the impugned order that the Assessing Officer has not furnished any report with reference to the issuance or service of notice under section 143(2) of the Act. Again, a letter dated 04.08.2025 issued by the ld. CIT(A) requiring the Assessing Officer to furnish report on whether notice under section 143(2) of the Act has been issued and served on the assessee and also furnish copy of such notice issued. We find no response to such letter, the Assessing Officer vide letter dated 13.09.2025 furnished remand report as well as objections of the assessee, which are reproduced in pages 9 to 19 of the impugned order. On perusal of the remand report, the Assessing Officer observed significantly for the relevant assessment year, the case of the assessee had not been selected for scrutiny, notwithstanding his claim of loss due to capital gains indicated in the return of income filed for the relevant year at page 12 of the impugned order. According to the ld. CIT(A) that no notice under section 143(2) of the Act is required to be issued after the expiry of 6 months from the end of the financial year in which the return is furnished. Further, he held that since no return of income has been filed in response to the notice issued under section 148 of the Act and hence, no notice under section 143(2) of the Act can be issued vide para 10 of the impugned order. Therefore, it is clear that no finding with regard to issuance of notice under section 143(2) of the Act given by the Assessing Officer in the remand report and the ld. CIT(A) held no notice under section 143(2) of the Act can be issued in the absence of return filed in response to the notice under section 148 of the Act.
In this regard, we may have to refer the order of the Delhi Benches of the ITAT in the case of ITO v. R.K. Gupta (supra), which clearly held that the original return was to be taken as return filed in response to notice under section 148 of the Act. In the present case, admittedly, the assessee filed reply letter dated 20.04.2018 stating that to be best of their knowledge and belief, no income had escaped assessment and also requested the A.O. to treat the return filed earlier as having been filed in response to the notice issued under section 148 of the Act and consequently, by following the statutory procedure as contemplated in the Act by issuing statutory notice under section 143(2) of the Act. Admittedly, as discussed above, we find no notice under section 143(2) of the Act was issued, therefore, as rightly pointed out by the ld. AR, the reassessment made thereon is invalid for non issuance of notice under section 143(2) of the Act.
In another order dated 09.02.2023 in the case of Raj Kumar Prop. M/s. Raj Cotton & Oil Mills v. DCIT (supra) at page 29 of the paper book also held that the assessee need not file fresh return on receipt of notice under section 148 of the Act if he feels the earlier return should be treated for the purpose of reassessment, he may inform the Assessing Officer of his decision to treat his previous return as the return filed in response to the notice under section 148 of the Act. In order to arrive such conclusion, the Delhi Tribunal respectfully followed the decision of the Hon’ble High Court of Rajasthan in the case of Tiwari Kanhaya Lal v. CIT (1985) 154 ITR 109 (Raj) and also the decision of the Hon’ble High Court of Calcutta in the case of Iqbal Singh Atwal v. CIT (1984) 147 ITR 599 (Cal.). Therefore, it is clear that the findings of the ld. CIT(A) in holding that no notice can be issued since no return of income filed in response to the notice under section 148 of the Act is not justified in view of the orders of the ITAT Delhi Benches in the case of ITO v. R.K. Gupta (supra) and in the case of Raj Kumar Prop. M/s. Raj Cotton & Oil Mill v. DCIT (supra). Thus, following the same, the assessee succeeds in ground No. 3 and accordingly, the order of the ld. CIT(A) is set aside and the reassessment order dated 26.12.2018 stands quashed. Thus, ground No. 3 raised by the assessee is allowed.
8. In view of our decision in ground No. 3 as preliminary issue raised allowed, other grounds raised in the grounds of appeal become academic requires no adjudication.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 13th March, 2026 at Chennai.