2026 (3) TMI 1494 - AT - Income Tax

Service of notice under Section 143(2) is mandatory for scrutiny assessment; non-service makes the assessment invalid.

Service of notice under Section 143(2) is a mandatory jurisdictional prerequisite for completing scrutiny assessment under Section 143(3) of the ... Mandatory service of notice u/s 143(2) - validity of assessment u/s 143(3) carried out without service of notice u/s 143(2) - addition made u/s 68 HELD THAT: - Tribunal upheld the appellate finding that the material on record itself showed that the notice u/s 143(2) had not been served, the delivery status reflecting that the notice had bounced. Since service of the statutory notice is foundational to assumption of jurisdiction for completing a scrutiny assessment, completion of assessment under section 143(3) in its absence rendered the order illegal and void ab initio. Revenue could not dislodge this factual finding, and its objection that the point had not been raised as a ground before the first appellate authority was not accepted in view of the jurisdictional defect found on record. [Paras 4, 5] Final Conclusion: The Tribunal held that non-service of notice under section 143(2) vitiated the assessment framed u/s 143(3). The Revenue's appeal was therefore dismissed. Issues: Whether the assessment under Section 143(3) of the Income-tax Act, 1961 was invalid for want of service of notice under Section 143(2) of the Income-tax Act, 1961.Analysis: The Tribunal found that the record showed the notice under Section 143(2) had bounced and was not served on the assessee. Since service of the statutory notice is a jurisdictional requirement for completing scrutiny assessment under Section 143(3), the absence of service rendered the assessment legally unsustainable. The Tribunal held that the first appellate authority had correctly treated the defect as going to the root of jurisdiction and had rightly quashed the assessment.Conclusion: The assessment under Section 143(3) was held to be invalid for non-service of notice under Section 143(2), and the Revenue's challenge failed.Final Conclusion: The appellate order annulling the assessment was sustained, and the Revenue's appeal was dismissed.Ratio Decidendi: Service of notice under Section 143(2) is a mandatory jurisdictional prerequisite for a valid scrutiny assessment under Section 143(3), and non-service vitiates the assessment.