Income Tax Assessment Incomplete Without Mandatory Notice; Tribunal's Decision Overturned on Procedural Grounds.

The court held that the assessment under Section 158BC of the Income Tax Act requires a notice under Section 143(2) for completion. The absence of this notice cannot be cured by Section 292BB, as it is a mandatory requirement. The Tribunal's decision that the lack of notice was cured by waiver and acquiescence was overturned. Consequently, the assessment was deemed incomplete and set aside, emphasizing the necessity of following procedural requirements for valid assessments.

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Issues involved:
The judgment addresses the following Issues:
1. Whether the return filed by the appellant was beyond the time limit prescribed under Section 158BC of the Income Tax ActRs.
2. Whether the notice under Section 143(2) of the Income Tax Act is required to complete the assessment under Section 158BCRs.
3. Whether the lack of notice under Section 143(2) stands cured by the provisions of Section 292BB of the Income Tax ActRs.

Issue 1 - Time Limit for Filing Return:
The appellant was directed to file a return within one month after a notice was issued under Section 158BC of the Income Tax Act. The appellant filed the return on 22.11.2004, declaring undisclosed income. The Tribunal held that any return filed after the prescribed 45-day limit is non-est, allowing the assessing officer to proceed for assessment without further notice under Section 143(2).

Issue 2 - Requirement of Notice under Section 143(2):
The Tribunal distinguished a previous Supreme Court decision and found that the absence of a notice under Section 143(2) was cured by Section 292BB, a procedural clarification. It was held that the lack of notice was cured by the principle of waiver and acquiescence, as the assessee cooperated in the assessment without objection.

Issue 3 - Cure under Section 292BB:
Section 292BB deems a notice to be valid in certain circumstances when the assessee has cooperated in the assessment process. However, the absence of a mandatory notice under Section 143(2) cannot be cured under Section 292BB, as clarified by the Supreme Court in a previous case.

The judgment emphasized that the assessment under Section 158BC requires a notice under Section 143(2) for completion, as it is a complete code in itself. The Court held that the absence of such notice renders the assessment incomplete and must be set aside. The assessment is deemed to be completed based on the return filed by the assessee in response to the initial notice under Section 142(1) of the Act.

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