Once ITR is filled in response to notice u/s 148 though late, notice u/s 143(2) is must – ITAT

Once assessee filed ITR, in response to the notice u/s 148 of the Act, even beyond time prescribed, Assessing Officer is required to issue notice u/s 143(2) – ITAT

In a recent judgment, ITAT Lucknow has held that once the assessee has filed the return, in response to the notice u/s 148 of the Act, even beyond time prescribed in notice u/s 148 of the Act, the Assessing Officer was required to issue notice u/s 143(2) of the Income Tax Act.

ABCAUS Case Law Citation:
5153 (2026) (05) abacus.in ITAT

In the instant case, the challenge set up by the assessee was that after issuing notice u/s 148, the AO had not issued notice for detailed scrutiny under section 143(2) and therefore, assessment framed by the AO was bad in law.

The assessment order was passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (the Act) by making additions under section 69 of the Act on account of unexplained money.

The assessee’s appeal against the assessment order was dismissed by the First Appellate Authority (FAA) vide impugned appellate order.

Before the Tribunal the assessee contended that unless a notice u/s 143(2) of the Act is served on the assessee, the Assessing Officer is bound to accept the return filed by the assessee even if the assessee delays the filing of the return. If the assessee delays the filing of return, the Assessing Officer would be justified in curtailing the time allowed to the assessee to produce cause to be produced evidences on which the assessee may rely in support of return.

It was contended that alternatively, if the assessee delays the filing of return, the Assessing Officer would be justified, until the assessee filed return, to pass an ex parte (Best Judgment) assessment order u/s 144 of the Act. Once the assessee files return, the Assessing Officer cannot proceed to make assessment order to the detriment of the assessee, by disturbing the income returned by the assessee, without issuing and serving notice u/s 143(2) of the Act.

The assessee relied upon various order including of Co-ordinate Bench of ITAT Lucknow, Hon’ble Allahabad High Court, Hon’ble Patna High Court, order of Hon’ble Delhi High Court, Rajasthan High Court, Madras High Court and Hon’ble Supreme Court.

It was submitted that in the order of Hon’ble Allahabad High Court, which was Jurisdictional High Court, , the assessee had filed return much beyond the time indicated in the notice u/s 148 of the Act. The Assessing Officer passed assessment order without issuing notice u/s 143(2) of the Act. The Hon’ble High Court held that the provisions contained in sub-section (2) of section 143 of the Act were mandatory. The Hon’ble High Court also held that when the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. The Hon’ble Allahabad High Court further observed that it has been uncontroverted legal position that where a stature requires to do a certain thing in a certain way, the thing must be done in that way, or not at all.   

It was further submitted that Hon’ble Patna High Court held that the notice u/s 148 of the Act required the assessee to file the return within 30 days; however, the return was filed after a delay of about eight and a half months. Despite such delay, the Hon’ble High Court decided the identical issue in favour of the assessee and against the Revenue.

Further, it was submitted that Hon’ble High Court held that the failure by the Assessing Officer to issue notice u/s 143(2) of the Act was fatal to order of re-assessment u/s 147 read with section 148 of the Act. The Hon’ble High Court took cognizance of two decisions of Hon’ble Allahabad High Court.

It was also pointed out that the Hon’ble Rajasthan High Court held that failure to issue notice u/s 143(2) of the Act in the re-assessment proceedings, prior to finalizing re-assessment order, cannot be condoned and is fatal to the order of re-assessment.

The Tribunal following the binding precedents held that the assessee having filed return of income and the assessee also having intimated the Assessing Officer, that return had been filed, it was mandatory on the part of the Assessing Officer to issue notice u/s 143(2) of the Act, if for any reason, the Assessing Officer intended to proceed in repudiation of return filed by the assessee in response to the notice u/s 148 of the Act, or to pass assessment order to the detriment to the assessee.

The Tribunal also held that once the assessee has filed the return, in response to the notice u/s 148 of the Act, even beyond time prescribed in notice u/s 148 of the Act, the Assessing Officer was required to issue notice u/s 143(2) of the Act.

Accordingly, the Tribunal set aside the impugned appellate order of CIT(A) and the assessment order passed by the Assessing Officer was annulled.

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