Validity of reassessment under sections 147 and 144 challenged for want of a valid notice under section 143(2), appeal allowed.

Reassessment under section 147 read with section 144 and section 144C(13) was challenged for want of a valid notice under section 143(2); the return filed in response to notice under section 148 was held to be valid despite delayed e-verification caused by technical glitches on the e-filing portal, with a physical ITR copy lodged with the AO and subsequent e-verification curing the defect, and CPC later condoning the delay. The Assessing Officers invocation of summary assessment provisions was unjustified where no valid notice under section 143(2) issued, leading to setting aside of reassessment proceedings and allowance of the appeal.

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Issues: Whether the reassessment completed under section 147 read with section 144 and section 144C(13) of the Income-tax Act, 1961 is invalid for want of issuance of a valid notice under section 143(2) where the assessee filed a return in response to notice under section 148 and the delay in e-verification was subsequently condoned.

Analysis: The Tribunal examined whether the return filed by the assessee on 07.07.2021 in response to the notice under section 148 was a valid return for the purposes of issuing a notice under section 143(2). The Tribunal considered the timeline of e-filing, the technical glitches on the e-filing portal acknowledged by the CBDT, the filing of a physical copy of the return with the assessing officer, the subsequent e-verification and acceptance/condonation of delay by the CPC, and relevant statutory scheme and precedents establishing that issuance of a notice under section 143(2) is a mandatory precondition for framing assessment in reassessment proceedings. The Tribunal also considered whether recourse to best judgment assessment under section 144 was permissible without first issuing the mandatory notices (including a show cause notice under the first proviso to section 144(1)) and concluded that the preconditions for invoking section 144 were not satisfied. On these facts the Tribunal treated the return as valid and found that the AO had not issued a valid notice under section 143(2) prior to finalizing reassessment and had not complied with the procedural requirements for section 144.

Conclusion: The reassessment proceedings and the assessment order passed under section 147 read with section 144 and section 144C(13) are vitiated for failure to issue a valid notice under section 143(2); recourse to section 144 was unjustified; the reassessment order is set aside in favour of the assessee.

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