2023 (11) TMI 1002 - HC - Income Tax

Assessment order invalid when no Section 143(2) notice issued, Section 292BB cannot cure complete absence of notice

Pr. Commissioner of Income Tax -Central -1 Versus Grand Express Developers Pvt. Ltd.

The Delhi HC ruled that an assessment order under Section 153C read with Section 143(3) is invalid when no notice under Section 143(2) is issued. The ... Validity on assessment order u/s 153C r.w.s. 143(3) in the absence of notice u/s 143(2) - defective assessment order - whether curable defect u/s 292BB? - whether the absence of notice u/s 143(2), before framing the assessment order would render the assessment order defective, having regard to the provisions of Section 292BB? HELD THAT:- The argument advanced on behalf of the appellant/revenue that the absence of notice u/s 143(2) would not render the assessment order u/s 143(3) defective does not impress us as the import of Section 292BB is to remedy infirmities that arise in the service of notice under the Act. However, this is a case, where no notice under Section 143(2) was issued, as noted by the CIT(A) and affirmed by the Tribunal; which is different from saying that a notice was issued which was deficient. This issue is no longer res integra, as is demonstratable by the decision of Laxman Das Khandelwal [2019 (8) TMI 660 - SUPREME COURT] as said that the scope of the provision of section 292BB is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. Decided in favour of assessee. Issues Involved:The judgment involves condonation of delay in re-filing the appeal and the challenge to an order passed by the Income Tax Appellate Tribunal regarding the Assessment Year 2013-14.Condonation of Delay:The appellant sought condonation of a 430-day delay in re-filing the appeal, which was considered substantial. The court decided to condone the delay and proceed with hearing the appeal on merits.Appeal Concerning Assessment Year 2013-14:The appellant/revenue aimed to challenge the order passed by the Income Tax Appellate Tribunal related to the Assessment Year 2013-14. The Commissioner of Income Tax (Appeals) had quashed the assessment order due to the absence of a notice under Section 143(2) of the Income-tax Act before it was framed.Factual Background:The respondent/assessee had filed the original Return of Income for the Assessment Year in question, declaring a loss. Following a search and seizure operation regarding a sister concern of the respondent/assessee, the respondent's case was taken up for scrutiny. Notices were issued under Section 142(1) of the Act, and proceedings were initiated concerning unsecured loans received by the respondent/assessee.Legal Arguments:The appellant contended that the absence of a notice under Section 143(2) did not render the assessment order defective, relying on Section 292BB of the Act. However, both the CIT(A) and the Tribunal confirmed that no such notice was issued, leading to a discussion on the impact of Section 292BB.Decision and Conclusion:The court held that the absence of a notice under Section 143(2) before framing the assessment order rendered it defective, despite arguments to the contrary. Citing relevant legal precedents, the court dismissed the appeal, stating that no substantial question of law arose for consideration. The appeal was closed, and the order was to be dispatched to the respondent/assessee via all modes, including email, for further action.Separate Judgement Highlight:The judgment was delivered by Hon'ble Mr. Justice Rajiv Shakdher and Hon'ble Mr. Justice Girish Kathpalia.