Non issuance of notice u/s 143(2) for return filed u/s 148 even though belatedly, makes the assessment framed bad in law and void ab initio – ITAT
In a recent judgement, ITAT has held that if no scrutiny notice u/s 143(2) is issued in respect of return filed in response to notice u/s 148 even though belatedly, then the assessment framed in respect of the said 148 notice will be bad in law and void ab initio and is liable to be quashed.
ABCAUS Case Law Citation:
5226 (2026) (09) abacus.in ITAT
In the instant case, the assessee had challenged the order passed by the NFAC (CIT(A)) dismissing assessee’s appeal against the addition made on account of unaccounted purchases vide, assessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 (the Act).
The case of the assessee was reopened u/s. 147 of the Act and the notice u/s. 148 was issued. The Assessing Officer (AO) observed that no return was filed in response thereof. The AO issued statutory notice u/s. 142(1). The Assessee, vide reply contended before the AO that the return in response to notice u/s. 148 of the Act was filed belatedly.
However, the AO brushed this plea of the assessee aside, stating that the fact was neither mentioned in the assessee’s earlier replies nor the return was visible on e-filing. The AO., further observed that there was no point in intimating jurisdictional AO about the filing of return as the notices were issued from the faceless unit.
As a result the Assessing Officer, treating the return as non-est, completed the assessment proceeding and made the impugned addition. The First appeal of the assessee against the assessment order was dismissed by the CIT(A).
Before the Tribunal, the assessee inter alia took additional legal ground contending that since notice u/s 143(2) of the Act had not been issued, the entire Assessment Order was bad in law and without Jurisdiction. It was also contended that since the Assessment Order had not been passed u/s 144 of the Act, the return filed in response to notice u/s 148, though filed beyond time allowed in notice u/s 148, has to be taken as considered by the Assessing officer and hence the Assessment Order passed without issue of notice u/s 143(2) deserved to be cancelled.
The Revenue contended that the assessee was required to file the return within 30 days from the date of notice u.s 148. However, assessee filed belated return which was treated to be non-est. In such circumstances, the notice u/s 143(2) of the Act was not required to be mandatorily issued.
The Tribunal observed that Hon’ble Supreme Court has held that issue of notice u/s. 143(2) for the completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non-issuance thereof is not a curable defect. Hon’ble Court observed that even in the case of block assessment u/s 158BC, it has to be issued.
The Tribunal further observed that the Delhi High Court had an occasion to examine identical situation and held that once a return is filed, notice under s. 143(2) of the Act to the assessee is mandatory prior to framing an assessment. The question of framing an assessment ex parte without even issuing a notice under u/s 143(2) of the Act did not arise.
The Tribunal noted that CIT(A) had observed that the assessee belatedly filed the return which cannot be treated as valid return as third provisio to section 148, inserted by the Finance Act, 2023, does not alter the fact that even under the pre-existing law, the belated filing of the return cannot compel the assessing officer to issue a notice u/s. 143(2).
The assessee contended that he has a vested right to file a belated return, prior to the insertion of proviso to section 148. CBDT Notification No. 2/2024 dated 31.03.2024 which clarifies that where return is uploaded and e-verified within prescribed time, the date of uploading shall be treated as the date of furnishing the return.
The Tribunal agreed with the assessee and opined that the principle of harmonious construction shall apply in the facts of the instant case so as to interpret the amended provision vis-a-vis CBDT’s clarifications through FAQ supported with CBDT Notification No. 2 of 2024 dated 31.03.2024 harmoniously.
The Tribunal further noted that recently Hon’ble Allahabad High Court has given a decision on the identical issue.
Accordingly, the Tribunal following the said decisions, held that the reassessment completed u/s. 147/144B of the Act without issuance of notice u/s 143(2) of the Act was bad in law and void ab initio and consequently the same was quashed.
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