Non-issuance of Notice u/s 143(2) is an Incurable Defect | ITAT Quashes Reassessment u/s 148

Case Details: Major Suresh Yadav (Retd.) vs. ITO - [2023] 153 taxmann.com 159 (Delhi-Trib.)

Judiciary and Counsel Details

• • Kul Bharat, Judicial Member
  • Mukesh Kohli, CA for the Appellant.
  • Om Parkash, Sr. DR for the Respondent.

Facts of the Case

Assessee-individual filed a return of income for the relevant assessment year. Subsequently, the Assessing Officer (AO) issued a notice under section 148 of the Act to the assessee requiring him to furnish a return within the prescribed time limit. In response, the assessee requested AO to treat the original return he filed as the one filed in response to the notice issued under section 148.

Unsatisfied by the response, without issuing any notice under section 143(2), the AO continued to make additions to the assessee’s income on an estimation basis.

Considering it obligatory for the AO to issue a notice under section 143(2) after the request by the assessee to treat his earlier return as filed in pursuance to the notice under section 148, an appeal was filed to CIT(A). CIT(A) dismissed the appeal, and the matter reached the Delhi Tribunal.

ITAT Held

The Tribunal held that the assessee had requested to treat the return of income filed under section 139(1) of the Act as in response to section 148. Having noted this, the AO proceeded to frame the assessment. However, nothing was recorded in the assessment order whether any notice under section 143(2) was issued to the assessee.

The AO itself had admitted that issuance of notice under section 143(2) of the Act was not ascertainable. Thus, in the absence of any proof of issuance of notice under section 143(2) and the service of the same to the assessee, it can be inferred that the AO issued no such notice to the assessee.

The law is well settled that non-issuance of notice under section 143(2) of the Act is not a curable defect. The failure of AO in reassessment proceedings to issue a notice under section 143(2) prior to finalizing the reassessment order cannot be condoned. Therefore, the impugned assessment order suffered from patent legality and deserved to be quashed.

List of Cases Reviewed

• • Pr. CIT v. Shri Jai Shiv Shankar travels (P.) Ltd. [2015] 64 Taxmann.com 220 (Delhi) [Para 11] – followed.