Section 292BB of the Income Tax Act, 1961 does not preclude Assessee raising objection for non issuance of notice u/s 143(2) of the Act
In a recent judgment, Hon’ble Supreme Court has held that Section 292BB of the Income Tax Act, 1961 does not preclude an assessee from raising an objection in any proceedings under the Act regarding non issuance of a notice under Section 143(2) of the Act, merely because the assessee had appeared and cooperated during the reassessment proceedings without raising any objection with regard to non-issuance of the notice.
ABCAUS Case Law Citation:
5255 (2026) (10) abacus.in SC
Important Case Laws relied upon by Parties:
Commissioner of Income Tax vs. Laxman Das Khandelwal
Assistant Commissioner of Income Tax and Another vs. Hotel Blue Moon
In the instant case, assessees had filed the Returns of their Income for the respective Assessment years under Section 139 of the Act, which were duly assessed, and assessment orders passed under Section 143(3) of the Act.
Subsequently, the Revenue sought to reopen the assessments under Section 147 of the Act and issued notices under Section 148 of the Act, requiring the assesses to file the returns in the prescribed form.
The assessee filed a response stating that its Return of Income originally filed under Section 139 of the Act, be treated as the Return of Income in response to a notice under Section 148 of the Act. In case of another assessee, the same Return of Income which had earlier been filed under Section 139 of the Act, was refiled in response to the notice issued under Section 148 of the Act.
However, no notice under section 143(2) of the Act was issued and the reassessment proceedings were commenced. During the reassessment proceedings, and notices under Section 142(1) of the Act were issued to the Assessee, seeking documents/stock information to be submitted.
Thereafter, the reassessment orders were framed against the Assessees, which were challenged by the Assessees by approaching the Appellate Authority, i.e., Commissioner of Income Tax (Appeals). One of the grounds raised by the Assessee before the Appellate Authority was with regard to failure of the Revenue to issue a notice under Section 143(2) of the Act, thereby vitiating the entire proceedings.
However, the Appellate Authority rejected the argument of the Assessee with regards to vitiation of the proceedings on account of failure of the Revenue to serve a notice under Section 143(2) of the Act. Appellate Authority held that since the Assessees had participated in the assessment proceedings after the issuance of a notice under Section 148, followed by a notice under Section 142(1), the Assessees could not be allowed to raise the ground of non-issuance of a notice under Section 143(2) of the Act at the appellate stage. However, the Appellate Tribunal held that the assessment proceedings stood vitiated for want of notice under Section 143(2) of the Act and, thus, set aside the reassessment orders.
The High Court had rejected the challenge of the Revenue and upheld the orders of Income Tax Appellate Tribunal confirming that the assessment proceedings were vitiated on the ground of failure of the authority to issue a notice under Section 143(2) of the Act.
The Hon’ble Supreme Court held that in 2010 it had held that the omission on the part of the Assessing Authority to issue a notice under Section 143(2) of the act cannot be treated as a procedural irregularity that is curable, and therefore, the requirement of issuing a notice under Section 143(2) of the Act cannot be dispensed with. It was specifically laid down that where the Assessing Officer intends to make an enquiry, he must necessarily follow the provisions of Section 142 and Section 143(2) & 143(3) of the Act.
The Revenue contended that notice was not required to be given and failure to give such a notice is not fatal to the reassessment proceedings in view of the provisions of section 292BB of the Act which stipulates that any notice required to be served upon the Assessee, under the provision of the Act, shall be deemed to have been duly served upon him in time and in accordance with the provisions of the Act, and the Assessee is precluded from taking any objection that the notice was either not served upon him, or not served upon him in time, or served upon him in an improper manner.
However, the Hon’ble Supreme Court held that deeming fiction u/s 292BB cannot come into play where the Revenue has admittedly not even issued the notice. Where the Revenue itself contends that no notice was sent, as required under the Act, the provision of Section 292BB will have no applicability.
The Hon’ble Supreme Court held that the Assessing Officer cannot undertake the proceedings of reassessment under Section 143(3), read with Section 147 of the Act, unless a notice under Section 143(2) of the Act has been issued to the Assessee. Mere participation of the Assessee in the assessment proceedings, in the absence of a notice under Section 143(2) of the Act, does not confer jurisdiction on the Assessing Officer to frame an assessment under Section 143 (3) of the Act.
The Hon’ble Supreme Court held that in terms of the law laid down by it, the Assessing Officer could not have framed the assessments, and as such the proceedings are vitiated. As held the omission on the part of the Assessing Authority to issue a notice under Section 143(2) of the Act is not a mere procedural irregularity and is not curable. Furthermore, mere participation in the proceedings by the Assessees does not come to the aid of the Revenue in terms of the Section 292BB of the Act.
The Hon’ble Supreme Court also held that a letter given by the Assessing Officer under section 142 (1) of the Act during the course of reassessment proceedings would not satisfy the requirements of a notice under section 143(2) of the Act. A notice under section 143(2) of the Act is a sine qua non for commencing the proceedings. A letter issued after commencing the proceedings would not cover up the lacuna in the proceedings and would not validate what is non est.
Accordingly, the Hon’ble Supreme Court held as under:
(i) Section 292BB of the Act does not preclude an Assessee from raising an objection in any proceedings under the Act regarding non issuance of a notice under Section 143(2) of the Act, merely because the Assessee had appeared and cooperated during the reassessment proceedings without raising any objection with regard to non-issuance of the notice. and
(ii) The revenue is not absolved of its obligation to serve a notice under Section 143(2) of the Act even if the Assessee requests that the earlier Return of Income filed under Section 139 of the Act be treated as the Return of Income filed in response to a notice under Section 148 of the Act. and
(iii) Mere issuance of a letter by the Assessing Officer under section 142(1) of the Act during the course of reassessment proceedings, requiring the Assessee to explain the grounds on which re-assessment of income was proposed, does not amount to sufficient compliance of the mandatory obligation to serve a notice under Section 143(2) of the Act.
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