Reopening of assessment and belated return: belated filing does not negate return status and assessment without mandatory notice is quashed

Validity of reopening and framing of assessment is addressed: a belated return filed after the time specified in the notice under reopening provisions cannot be treated as a non est return, and the assessing officer remains obliged to issue the mandatory notice under the assessment procedure before framing an assessment; failure to issue that notice renders an assessment framed under summary provisions liable to be quashed. Cited appellate and high court authorities support treating belated returns as valid for triggering notice obligations, and the assessment made without issuing the mandatory notice was held illegal and annulled.

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Issues: (i) Whether the reopening of assessment and reassessment order could be sustained where reassessment was directed based on a direction by the first appellate authority and where a coordinate ITAT order in the assessee's other year dislodged that foundation; (ii) Whether the assessment/reassessment completed without issuing a notice under Section 143(2) after the assessee filed a return in response to a Section 148 notice is valid.

Issue (i): Whether the reassessment reopening and the addition sustained by reopening could be upheld in view of a prior ITAT decision removing the foundation for reopening and the CIT(A)'s application of that decision.

Analysis: The appellate order under challenge was passed following and applying the prior Tribunal decision in the connected proceedings which held that the CIT(A) had no power to direct reopening of the other year and dislodged the factual/legal basis for reopening. The present Tribunal reviewed the CIT(A)'s order, noted that the foundation for reopening was overturned by the ITAT in the assessee's own case, and considered whether interference was warranted with the CIT(A)'s consequent quashing of the reassessment.

Conclusion: The appellate authority's decision to set aside the reassessment as based on a dislodged foundation is upheld and the revenue appeal is dismissed on this issue (in favour of the assessee).

Issue (ii): Whether the assessment/reassessment completed without issuing the mandatory notice under Section 143(2) after the assessee filed a return in response to a Section 148 notice is valid.

Analysis: The Tribunal admitted the respondent's ground under Rule 27 and examined authority and precedents on the duty to issue Section 143(2) notice where a return is filed pursuant to a Section 148 notice, including decisions holding that omission to issue Section 143(2) is not a curable procedural irregularity and that Section 292BB does not cure failure to issue the notice. On the facts, the AO did not issue a notice under Section 143(2) after the return filed in response to the Section 148 notice (a fact accepted by the Department). Applying the cited precedents and statutory requirements, the Tribunal concluded that omission to issue the Section 143(2) notice was fatal to the assessment/reassessment and warranted quashing.

Conclusion: The assessment/reassessment completed without issuing the mandatory notice under Section 143(2) is invalid and is quashed (in favour of the assessee).

Final Conclusion: The Tribunal dismisses the revenue appeal, upholds the first appellate authority's order quashing the reassessment, allows the assessee's Rule 27 ground, and declares the assessment/reassessment void for failure to issue the mandatory Section 143(2) notice; no interference with the appellate order is made.

Ratio Decidendi: Where a return is filed in response to a notice under Section 148, the Assessing Officer is obliged to issue a notice under Section 143(2) before completing assessment under Section 143(3)/144, and omission to issue such notice is a jurisdictional defect rendering the assessment/reassessment void ab initio.

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