Reopening of assessment under section 147: no requirement to issue notice under section 143(2) where returned income accepted

Where a belatedly filed return qualifies as a return under the statute and is taken cognizance of, the assessing officer must treat it as either a return under the primary return provision or as response to a notice and therefore follow applicable procedure for examination; however, where the assessing officer accepts the returned income in reopening under reassessment procedure and makes no variation or addition, there is no legal necessity to issue a notice for seeking explanations. Acceptance of the return and no change to returned income sustains the reassessment without issuance of such notice.

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Issues involved:
1. Validity of assessment completed under sections 147/148 without considering return filed and notice u/s 143(2).
2. Legality of initiating proceedings under sections 147/148 without new tangible material.
3. Necessity of issuing notice u/s 143(2) for completing reassessment under sections 144/147/143(3).

Analysis:
1. The appeal was filed against the CIT(A)'s order pertaining to the assessment year 2013-14. The AO completed the assessment under sections 148/143(3) without considering the return filed and notice u/s 143(2) within the specified period. The appellant contended that the notice u/s 148 was based on a change of opinion, which is impermissible. The AO passed a best judgment assessment under sections 144 r.w.s. 143(3)/147, allowing only the current year loss to be carried forward. The CIT(A) found no substantive grievance as the appellant's claim aligned with the assessment. The issue of notice u/s 143(2) was raised during the hearing, arguing that the reassessment was invalid without its issuance.

2. The appellant argued that the reassessment under sections 144/147/143(3) was completed without the issuance of notice u/s 143(2), rendering it invalid and bad in law. The dispute centered on whether the failure to issue notice u/s 143(2) affected the validity of the reassessment. The contention was supported by a decision of the Rajasthan High Court.

3. The Tribunal analyzed the legal necessity of issuing notice u/s 143(2) in the context of the return filed by the assessee. It was established that the return claimed losses only for the relevant assessment year and not for any earlier years. The Tribunal concluded that since the assessment was completed accepting the returned income without any variation or addition, there was no requirement for the AO to issue notice u/s 143(2). A precedent case was cited to distinguish the necessity of issuing notice u/s 143(2) based on the circumstances of the case.

In conclusion, the Tribunal dismissed the appeal, affirming the validity of the reassessment order under sections 147/148 without the issuance of notice u/s 143(2) due to the acceptance of the returned income without any additions or variations.

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