2026 (1) TMI 1536 - AT - Income Tax

Assessment under section 144 without notice u/s 143(2) leads to quashing where mandatory notice was not served

Issuance of a notice prior to completing an assessment is a jurisdictional requirement; where a return is filed belatedly in response to an investigative ... Assessment framed u/s 144 without issuance of a notice u/s 143(2) - Mandation to issue notice u/s 143(2) when the return of income is filed belatedly and beyond the time permitted u/s 139(4) - assessee had delayed the filing of his return of income in compliance to the notice issued u/s 142(1) - HELD THAT:- Issuance of notice u/s 143(2) of the Act is a jurisdictional requirement. Failure to serve such notice before completing the assessment vitiates the entire proceedings. In the present case, the Revenue has not brought any material on record to show that notice under section 143(2) of the Act was ever issued to the assessee. In the absence of such notice, the assessment completed by the Ld. AO under section 144 of the Act cannot be sustained in the eyes of law. Therefore, respectfully following the decision of Nimmana Narasimharao, Eluru [2025 (9) TMI 1739 - ITAT VISAKHAPATNAM] we hold that the assessment order passed by the Ld. AO without issuance of notice u/s 143(2) of the Act is invalid and liable to be quashed. Accordingly, the assessment order passed u/s 144 of the Act is quashed. Appeal of the assessee is allowed. Issues: Whether an assessment framed under section 144 of the Income-tax Act, 1961 without issuance of a notice under section 143(2), after the assessee filed a belated return in response to a notice under section 142(1) during the pendency of assessment proceedings, is valid.Analysis: The Tribunal examined whether a return filed belatedly but during the pendency of assessment proceedings retains the character of a valid return and whether the Assessing Officer is required to issue a notice under section 143(2) before proceeding to frame a scrutiny assessment. The Tribunal considered statutory provisions including sections 142(1), 139(4), 143(2), 144 and 234A, and relevant precedent, concluding that a return filed in response to a notice under section 142(1) during the pendency of assessment is a valid return notwithstanding delay and that the Assessing Officer remains under a statutory obligation to issue a notice under section 143(2) to assume jurisdiction for scrutiny assessment. The Tribunal further held that the deeming provision in section 292BB cures defects in service of notice but does not cure complete absence of a statutory notice; therefore non-issuance of section 143(2) notice is a jurisdictional defect rendering the assessment under section 144 unsustainable.Conclusion: The assessment framed under section 144 without issuance of notice under section 143(2) is invalid and is quashed; decision is in favour of the assessee.