Notice u/s 143(2) send by email fifty seconds before signing by AO not a legal notice

Notice u/s 143(2) send by email fifty seconds before signing by the Assessing Officer was not a legal notice – ITAT

In a recent judgment, ITAT Jaipur quashed the assessment holding that notice under section 143(2) send by email fifty seconds before signing of notice by the Assessing Officer was not served statutorily as required under law.

ABCAUS Case Law Citation:
4866 (2025) (11) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the action of AO in making addition on account of cash and jewellery found during the course of search from business and residential premises of the assessee u/s 69A of the Income Tax Act,1961 (the Act).

A search and seizure action u/s 132 of the Act was carried out by the Income Tax Department on the members of a Business Group of which assessee was one of the members.

The assessment was framed under section 143(3) of the Act by making the impugned additions.

Before the Tribunal the assessee inter alia argued that the Assessing Officer (AO) did not issue the statutory notice as required u/s 143(2) of the Act and therefore, the consequential order passed was bad in law.

It was submitted that merely showing in online TAB without attaching the statutory notice as required the order cannot be passed against the assessee. To support this view, the assessee relied upon the decision of the Apex Court and Rajasthan High Court. It was also contended that the approval accorded as per provision of section 153D of the Act was mechanically and was thereby the consequential order did not survive.

The Tribunal observed that after submitting the return by the assessee, the AO alleged to have issued the notice vide screen shot of delivery status of the notice show delivery status for date and time which was 50 seconds before the time and date of signing of notice by the Assessing Officer (AO).

The Tribunal opined that it time of signing of notice showed that when the email was sent to the assessee there was no attachment as the AO digitally singed that notice only after the email sent and the AO had not tried to deliver the same again which showed that the email sent to the alleged notice had no attachment to the notice.

In the absence of any counter by the Department the Tribunal accepted the contention of the assessee that in this case statutory notice as required u/s 143(2) was not issued and communicated to the assessee.

The Tribunal opined that merely the AO kept it in file does not amounted to that the same was served to the assessee and therefore, in the instant case the statutory notice as required was not served.

The Tribunal observed that on this issue the assessee had relied on the decision of the Apex Court in which the stand of the Revenue was that the expression ‘so far as may be apply’ indicates that it is not expected to follow the provisions of section 142, subsections (2) and (3) of section 143 strictly for the purpose of block assessments. The Apex Court rejected the contention observing that their Lordships did not see any reason to restrict the scope and meaning of the expression ‘so far as may be apply’. It was held that where the Assessing Officer in repudiation of the return filed under section 158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143.

As a result, the Tribunal following that binding precedent held that the order passed by the AO lacked jurisdiction and same was quashed.

The assessee had also raised an additional ground that a consolidated approval granted by JCIT u/s 153D for all block Assessment Years was mechanical one and without application of mind and therefore assessment order so passed was bad in law and deserves to be quashed.

The Tribunal observed that the approval did not disclose any reference to the seized material, the appraisal report, or the draft assessment orders, nor did it contain any reasoning to demonstrate application of mind by the approving authority and therefore, the way the approval was granted was not proper. This view was serviced as legal precedent of the Hon’ble Supreme Court wherein the Apex Court held that approval u/s 153D is a mandatory safeguard and cannot be granted mechanically.

Further, the Tribunal noted that Hon’ble Supreme Court upheld the finding that absence of application of mind by the approving authority renders the approval invalid. It had also been held by the Hon’ble Allahabad High Court that approval must be granted separately for each assessment year. Similarly, Delhi High Court quashed approvals granted in bulk for multiple assessments without application of mind.

The Tribunal observed that these judgments reinforce the principle that approval under Section 153D is not a mere administrative ritual but a substantive safeguard, which must be exercised judiciously for each assessment year independently. That view was also consistently followed by the various benches of the ITAT where assessments framed on the basis of mechanical approvals u/s 153D were held to be invalid and quashed. 

Therefore, the Tribunal further held that the approval granted u/s 153D was accorded in a mechanical and consolidated manner, without due application of mind and without separate consideration of each assessment year. Such approval being invalid, the consequential assessment orders framed for cannot be sustained in law.

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