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Facts
The assessee filed a belated return of income in response to a notice under Section 148 of the Income Tax Act, 1961. The Assessing Officer (AO) completed the reassessment under Section 147 read with Section 144B, considering the assessee's filed return, but did not issue a notice under Section 143(2) of the Act. The assessee challenged the assessment, arguing that the absence of a Section 143(2) notice rendered the assessment invalid.
Held
The tribunal held that since the AO considered the return of income filed by the assessee in response to the Section 148 notice as valid for reassessment, the issuance of a notice under Section 143(2) was mandatory. The tribunal found that the absence of this mandatory notice made the reassessment order arbitrary, bad in law, and void ab initio, and therefore quashed it.
Key Issues
The key legal issue was whether the non-issuance of a notice under Section 143(2) of the Income Tax Act, 1961, invalidates a reassessment framed under Section 147, especially when the assessee's return filed in response to a Section 148 notice was considered by the AO.
Sections Cited
Section 143(2), Section 147, Section 148, Section 144B, Section 292BB
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 07.04.2025 for the assessment year 2015-16 as per the grounds of appeal on record.
2. In this case, the assessee has raised both legal grounds as well as grounds on merits. The Ld. Counsel for the assessee submitted that he would assail the legal ground first and if the said legal ground is answered affirmative, then the grounds on merits shall become academic only.
The contention in law raised by the Ld. Counsel for the assessee was that the A.O had not issued any notice u/s.143(2) of the Income Tax Act, 1961 (for short ‘the Act’) before framing the assessment u/s.147 r.w.s. 144B of the Act, dated 25.03.2023 for A.Y.2015-16.
In this regard, the stand of the Department was that the assessee being issued a notice u/s.148 of the Act on 30.03.2022 requiring him to furnish within 30 days from the service of the said notice, a return in the prescribed form for the A.Y. 2015-16. However, the assessee had filed return of income in response to the notice u/s.148 of the Act after the expiry of time prescribed. Such belated return, therefore, cannot be treated as a valid return for the purpose of Section 143(2) of the Act, and hence,
3 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.) there was no requirement of issuance of separate notice u/s. 143(2) of the Act in respect of such invalid return. The aforesaid observation finds place in the report of the A.O, Dhamtari, dated 10.11.2025 and the relevant para is extracted as follows: “On the facts of the case, it is submitted that the assessee was issued notice u/s.148 of the Act on 30.03.2022 requiring him to furnish within 30 days from the service of this notice, a return in the prescribed form for the Assessment Year 2015-16, the assessee filed the return of income in response to notice u/s.148 after the expiry of time prescribed. Such belated return cannot be treated as a valid return for the purpose of section 143(2). Hence, there was no requirement for issuance of separate notice u/s.143(2). The reassessment framed u/s.147 r.w.s. 144B, is valid in law. Further, the assessee had participated in the entire reassessment proceedings without raising any objection, attracting the provisions of section 292BB. Therefore, the assessment cannot be held invalid merely on technical grounds. The objection of the assessee may kindly be rejected.”
In this regard, the contention of the assessee was that the assessee had filed return of income in response to the notice u/s. 148 of the Act on 31.01.2023 declaring income of Rs.3,91,550/- which was considered by the A.O as base figure for computing and assessing income at Rs.1,14,04,047/- which means the A.O had treated the return of income as validly filed by the assessee. That once, assessment was completed u/s. 147 r.w.s. 144B of the Act based on a valid return of income, in such scenario, non-issuance of notice u/s.143(2) of the Act makes such assessment bad in law and void ab initio, hence liable to be quashed.
Per contra, the Ld. Sr. DR had filed written submission dated 12.11.2025 which reads as follows:
We have carefully considered the submissions of the parties herein, documents available on record, analyzed the facts and circumstances of the case as well as judicial pronouncements placed on record. That even without going into the merits of the matter, we would adjudicate the 6 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.)
Ld. Counsel for the assessee regarding non-issuance of any notice u/s. 143(2) of the Act before completion of assessment u/s. 147 r.w.s. 144B of the Act and that in such a case what would be the fate of such assessment.
It is an admitted fact that the assessee had filed return of income in response to the notice u/s. 148 of the Act on 31.01.2023, declaring income of Rs.3,91,550/- which was considered by the A.O for computing and assessing income at Rs.1,14,04,047/- and therefore, the said return which was filed in consequence to notice u/s.148 of the Act was treated as valid return of income by the A.O and once that is so, we do not find any infirmity with the arguments raised by the Ld. Counsel for the assessee that since there has been no notice issued to the assessee u/s.143(2) of the Act, hence, assessment is liable to be quashed as invalid assessment. We are not in agreement with the submissions of the Ld. Sr. DR. That it is an admitted fact the A.O had completed the assessment u/s. 147 r.w.s. 144B of the Act on the basis of the return of income filed by the assessee in pursuance to notice u/s. 148 of the Act that itself signifies that the A.O had considered the return of income as valid and on that basis, proceeded to frame the assessment as per the relevant provisions of the Act. Therefore, contention of the Ld. Sr. DR that since the return of income was itself invalid, there was no occasion for the Department to issue notice
7 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.) u/s. 143(2) of the Act, does not hold the ground and is absolutely incorrect and misplaced in the given facts and circumstances of the assessee’s case.
We find that the Hon’ble Apex Court in the case of ACIT Vs. Hotel Blue Moon, 321 ITR 362 (SC) has held that issuance of notice u/s.143(2) of the Act is sine-qua-non for framing of an assessment u/s.143(3) of the Act. Similarly, the Hon’ble High Court of Delhi in the case of Shaily Juneja Vs. ACIT, (2024) 167 taxmann.com 90 (Delhi) has dealt with the similar issue and held that issuance of notice u/s.143(2) of the Act is mandatory in reassessment proceedings u/s.147 of the Act.
The Ld. Sr. DR has also submitted that “Further, whether such omission is covered by the provisions of Section 292BB of the Act is to be considered in the light of the facts of the case….”.
In this regard, we refer once again to the decision of the Hon’ble 11. High Court of Delhi in the case of Shaily Juneja Vs. ACIT (supra), wherein the Hon’ble High Court had referred to a judgment of Hon’ble High Court of Allahabad in the case of CIT Vs. Salarpur Cold Storage (P) Ltd. (2014) 50 taxmann.com 105 (Allahabad), wherein this very argument of the Ld. Sr. DR has been dealt with. It was held that Section 292BB of the Act provides a deeming fiction. The deeming fiction is to the effect that once the assessee has appeared in any proceeding or co- operated in any enquiry relating to an assessment or reassessment, it shall
8 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.)
Act, which is required to be served on the assessee, has been duly served upon him. In other words, once deeming section comes into operation, the assessee is precluded from raising a challenge about service of the notice. The proviso to Section 292BB of the Act, however, states an exception to the effect that the section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. The Hon’ble Allahabad High Court on analyzing of the said provision had given categorical findings that Section 292BB of the Act cannot obviate the requirement or complying with a jurisdictional condition. Therefore, for the Assessing Officer to make an order of assessment u/s.143(3) of the Act, it is necessary to issue a notice u/s.143(2) of the Act and in the absence of a notice u/s.143(2) of the Act, the assumption of jurisdiction itself would be invalid. What essentially the Court had held is that Section 292BB of the Act provides deeming fiction, however, that deeming fiction cannot override the jurisdictional condition which is validly cast upon the A.O as per provisions of the Act. Meaning thereby, it is mandatory for the A.O to issue notice u/s.143(2) of the Act before completion of assessment u/s. 143(3)/144B or 147/144B of the Act.
The Hon’ble High Court of Calcutta in the case of Pr. 12. Commissioner of Income Tax Vs. Shree Shoppers Ltd. (2023) NYPCTR 379 (Cal.) had held that it is a settled position of law that for carrying out
9 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.) assessment proceedings u/s.143(3) of the Act, the statutory requirement of serving of valid notice u/s.143(2) of the Act is must and in absence thereof, subsequent proceedings becomes invalid. The Hon'ble High Court of Bombay in the case of Ashok Devichand Jain Vs. Union of India, (2023) 151 taxmann.com 70 (Bombay) had held that any statutory notice, if issued, without valid inherent jurisdiction or if not issued at all, they resulted in an inherent defect in the entire procedure which is not curable.
The Co-ordinate Bench of the Tribunal, Delhi in the case of DCIT Vs. & CO No.228/Del/2025, A.Y.2015-16, dated 14.01.2026 had dismissed the Revenue’s appeal and allowed the assessee’s cross objection by quashing reassessment for A.Y.2015-16 on the ground that no mandatory notice u/s. 143(2) of the Act was issued to the assessee before completion of the reassessment. That on plain reading of Section 143(2) of the Act, notice u/s. 143(2) of the Act is required to be issued in a case whether return has been furnished u/s. 139 of the Act or in response to notice u/s. 142(1) of the Act or in pursuance to notice u/s. 148 of the Act.
In the present case, admittedly the assessee had furnished return of income in response to notice u/s. 148 of the Act and that further, the A.O had also taken into account the return of income filed by the assessee for the purpose of reassessment which is clearly evident from the assessment
10 Sudhir Kumar Singhal Vs. ITO, Ward-Dhamtari (C.G.) order. Therefore, once the A.O considers the return of income furnished by the assessee in response to notice u/s. 148 of the Act, in our considered view, then the A.O is bound to issue notice u/s. 143(2) of the Act before completion of the reassessment. Similar view was upheld by the Co- ordinate Bench of the Tribunal, Hyderabad in the case of Gangaram Reddy Tekulapalli, Hyderabad Vs. ITO, Int. Taxn.2, Hyderabad, & 787/Hyd./2024, dated 10.09.2025, A.Y.2014-15, taking guidance from the decision of the Hon’ble Apex Court in the case of ACIT Vs. Hotel Blue Moon (supra).
Reverting to the facts of the present case, the A.O had taken into account the return of income filed by the assessee on 31.01.2023 in response to the notice u/s. 148 of the Act, but failed to issue statutory notice u/s. 143(2) of the Act. Therefore, in our considered view, as per examination on record in the foregoing paras and as per the judicial principles enshrined therein, since the reassessment was framed without issuance of notice u/s. 143(2) of the Act, the said reassessment order is held to be arbitrary, bad in law and void ab initio, hence quashed.
That once reassessment itself is quashed, all other subsequent proceedings becomes non-est as per law. That since on this legal issue, relief has been provided to the assessee, all other grounds, if any, becomes academic only.
As per the above terms grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 19th February, 2026.