Non-issuance of notice under section 143(2) invalidates assessment and results in deletion of section 271B penalty

Return filed in response to a notice under section 142(1) is valid and the assessing officer is statutorily obliged to issue a notice under section 143(2) before framing assessment; omission to issue that mandatory notice deprives the assessing officer of jurisdiction and renders the assessment void. Consequently, any penalty under section 271B predicated on the quashed assessment also fails and must be deleted. The decision applies binding precedent and invokes the maxim sublato fundamento cadit opus to justify striking down consequential proceedings.

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Issues: (i) Whether an assessment framed under section 144 of the Income-tax Act, 1961, without issuance of the statutory notice under section 143(2) after a return filed in response to notice under section 142(1), is valid; (ii) Whether penalty under section 271B survives when the underlying assessment is quashed for non-issuance of notice under section 143(2).

Issue (i): Whether an assessment framed without issuing notice u/s 143(2) after the assessee filed return in response to notice u/s 142(1) is valid.

Analysis: The Tribunal examined the statutory scheme where a return filed in response to a notice under section 142(1) engages the Assessing Officer's duty to issue notice under section 143(2) to acquire jurisdiction for assessment. The Tribunal relied on coordinate-bench authority and the mandatory character of section 143(2), noting the return was filed, accepted and formed part of the record but no notice u/s 143(2) was issued prior to framing assessment u/s 144.

Conclusion: The assessment framed without issuance of notice u/s 143(2) is quashed; decision in favour of the assessee.

Issue (ii): Whether the penalty under section 271B can stand when the foundational assessment is quashed for lack of notice u/s 143(2).

Analysis: The Tribunal applied the principle that a consequential penalty based on an invalid assessment falls with the underlying order (sublato fundamento cadit opus) and observed that if the foundational assessment is void for want of jurisdiction, the penalty has no independent leg to stand on.

Conclusion: The penalty under section 271B is deleted; decision in favour of the assessee.

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