Assessment invalidated for failure to issue notice within section 143(2) time limit; proviso six-month and section 292BB inapplicable

HC upheld the Tribunal and held the assessment invalid because no notice under section 143(2) was issued within the prescribed period; the notice dated after the deadline could not validate the proceedings. The assessee cooperated, but the AO's assumption of jurisdiction under section 143(3) was held unlawful where the proviso's six-month limit was not met. Section 292BB cannot cure the defect of a belatedly issued notice; service or correctness is irrelevant if issuance itself was time-barred. Decision against the revenue.

---

---

Issues:
- Validity of assessment order under Section 143(3) of the Income Tax Act, 1961
- Interpretation of Section 292 BB of the Act
- Effect of non-issuance of notice under Section 143(2) within the prescribed period

Validity of assessment order under Section 143(3) of the Income Tax Act, 1961:
The case involved an appeal by the Revenue under Section 260A of the Income Tax Act, 1961, concerning the assessment year 2008-09. The dispute arose from the issuance of a notice under Section 143(2) of the Act beyond the prescribed period. The Commissioner of Income Tax (Appeals) and the Tribunal held that the assessment order passed under Section 143(3) was invalid due to the late issuance of the notice. The Tribunal emphasized that the notice under Section 143(2) is crucial for the Assessing Officer to assume jurisdiction over the assessee for assessment. As the notice was issued beyond the stipulated time frame, the assessment was deemed invalid, leading to the dismissal of the Revenue's appeal.

Interpretation of Section 292 BB of the Act:
The discussion revolved around the provisions of Section 292 BB of the Act, inserted in 2008. This section creates a deeming fiction where, if the assessee has cooperated in any assessment or reassessment proceeding, any notice required to be served is deemed to have been duly served on time. The assessee is barred from challenging the notice's service, timing, or manner if no objection was raised before the completion of assessment or reassessment. However, this deeming provision does not override the necessity of complying with jurisdictional conditions. The judgment highlighted that Section 292 BB cannot cure a defect in jurisdiction, such as the non-issuance of a notice within the prescribed period.

Effect of non-issuance of notice under Section 143(2) within the prescribed period:
The Court emphasized the significance of issuing a notice under Section 143(2) within the specified time frame for assuming jurisdiction over the assessee. Failure to issue the notice within the prescribed period renders the subsequent assessment invalid. The judgment referenced a Supreme Court decision emphasizing that the omission to issue a notice under Section 143(2) is not a procedural irregularity and cannot be cured. The failure to issue a notice within the prescribed period results in the Assessing Officer assuming jurisdiction unlawfully, making the assessment invalid. The judgment dismissed the Revenue's appeal, affirming the Tribunal's decision regarding the invalidity of the assessment order due to the late issuance of the notice.

---