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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND INCOME TAX APPEAL No. 658 OF 2023 BETWEEN:
THE COMMISSIONER OF INCOME TAX EXEMPTIONS, 6TH FLOOR, UNITY BUILDING ANNEXE, P. KALINGA RAO ROAD, BENGALURU - 560 027.
THE ASST. COMMISSIONER OF INCOME TAX EXEMPTIONS, CIRCLE-1, 6TH FLOOR, UNITY BUIDLING, ANNEXE, P. KALINGA RAO ROAD, BENGALURU - 560 027. …APPELLANTS (BY SRI DILIP M., STANDING COUNSEL) AND:
RAJIV GANDHI UNIVERSITY OF HEALTH SCIENCES RGUHS, 4TH T BLOCK, JAYANAGAR, BENGALURU - 560 041 PAN: AAALF 0023C. …RESPONDENT (BY SRI A. SHANKAR, SENIOR ADVOCATE A/W SRI ANNAMALAI S., ADVOCATE)
Digitally signed by VALLI MARIMUTHU Location: HIGH COURT OF KARNATAKA
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 16/05/2023 PASSED IN ITA No.16/BANG/2023, FOR THE ASSESSMENT YEAR 2013-2014. PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No.16/BANG/2023 DATED 16/05/2023 FOR ASSESSMENT YEAR 2013-2014 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, EXEMPTIONS, CIRCLE-1, BENGALURU.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K.V. ARAVIND)
Heard Sri M. Dilip, learned Standing Counsel for the appellants-Revenue, and Sri A. Shankar, learned Senior Counsel, along with Sri S. Annamalai, learned counsel for the respondent-Assessee.
The Revenue has preferred this appeal against the order passed by the Tribunal in ITA No.16/BANG/2023, dated 16.05.2023, relating to the Assessment Year 2013-14, raising the following substantial questions of law;
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
"1. Whether on the facts and in the circumstances of the case, the Tribunal's order dated 16.05.2023 is perverse in nature in quashing the assessment order on the ground that notice issued under Section 143(2) of the Act was not served on assessee ignoring that same is curable defect under section 292BB of the Act as assessee contested the case on merits before assessing authority and never contested the issue on non- service of notice issued under Section 143(2) of the Act before first appellate authority as well as before assessing authority? "2. Whether on the facts and in the circumstances of the case, the Tribunal's order dated 16.05.2023 is perverse in nature as Tribunal failed to consider the fact that except mentioning in its letter dated 15.03.2016 that notice issued in question under section 143(2) of the Act has not been received, in all further correspondences to this date, the assessee has not objected regarding non service of notice during assessment proceeding?"
The Assessee filed the return of income for the Assessment Year 2013-14. The assessment order records that notice under Section 143(2) of the Income Tax Act, 1961 (for short, ‘the Act’) was issued and served on the Assessee, and
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
the assessment under Section 143(3) of the Act came to be completed on 16.11.2016. The Assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [for short, ‘CIT(A)’]. The CIT(A), by order dated 11.11.2022, rejected the appeal filed by the Assessee. Aggrieved, the Assessee preferred a further appeal before the Tribunal. Before the Tribunal, the Assessee contended that, prior to passing the order under Section 143(3) of the Act, notice under Section 143(2) of the Act had not been issued. The Tribunal accepted the said contention and consequently set aside the assessment.
Sri M. Dilip, learned Standing Counsel for the appellants- Revenue, submits that the assessment order itself records the issue and service of notice under Section 143(2) of the Act, and the said aspect was never disputed either before the Assessing Officer or before the CIT(A). It is submitted that the plea of non-issuance of notice under Section 143(2) of the Act was raised for the first time before the Tribunal. Learned Standing Counsel further contends that, even assuming notice under Section 143(2) had not been issued, the same constitutes only a curable defect in terms of Section 292BB of the Act.
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
Sri A. Shankar, learned Senior Counsel, along with Sri S. Annamalai, learned counsel for the respondent-Assessee, submits that the assessment order has been completed under Section 143(3) of the Act. It is contended that issuance of notice under Section 143(2) of the Act is mandatory. The Tribunal, upon summoning the records, found that no such notice had been issued. Hence, it is submitted that the Tribunal has rightly set aside the assessment order. Learned Senior Counsel places reliance on the judgment of this Court in ITA No.192/2012, Commissioner of Income Tax (Central) and another v. M/s. C. Ramaiah Reddy, disposed of on 24.06.2020, in support of his submissions.
We have bestowed our consideration to the submissions advanced by the learned counsel for the parties and have carefully perused the records.
The assessment order dated 16.11.2016 passed under Section 143(3) of the Act records the issue and service of notice under Section 143(2) of the Act. The said aspect is disputed by the Assessee. However, the assessment order does
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
not disclose the date of issuance or service of such notice. The Tribunal, upon summoning the assessment records, found that the Assessing Officer had not issued notice under Section 143(2) of the Act. The contention of the Revenue that the plea of non-issuance of notice under Section 143(2) of the Act was not urged before the Assessing Officer or the CIT(A), and therefore could not have been examined by the Tribunal, is untenable. Issuance of notice under Section 143(2) of the Act is mandatory and jurisdictional for completion of assessment under Section 143(3) of the Act. Once the assessment suffers from non-compliance with such a mandatory requirement, the ground can validly be raised even for the first time before the Tribunal.
The Co-ordinate Bench of this Court, in the case of M/s. C. Ramaiah Reddy referred to supra, has held that in the absence of notice under Section 143(2) of the Act, an order of assessment passed under Section 143(3) of the Act is ab initio void. It has further been held that Section 292BB of the Act does not validate such proceedings in the absence of notice, as applicability of the said provision presupposes issuance of
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HC-KAR NC: 2025:KHC:35460-DB ITA No. 658 of 2023
notice by the Assessing Officer, and the provision is intended only to cure procedural irregularities and not the complete absence of notice. The facts of the present case being identical, we find no reason to take a view different from that taken by the Co-ordinate Bench of this Court in the aforesaid decision.
In view of the judgment of this Court in M/s. C. Ramaiah Reddy (supra), we are not inclined to entertain the present appeal. Accordingly, the appeal stands dismissed.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (K. V. ARAVIND) JUDGE
MV, List No.: 1 Sl No.: 51