Mandatory notice under section 143(2) is essential; reassessment without it cannot support revisionary action.

Reassessment completed without issuance of the mandatory notice under section 143(2) was held invalid and a nullity, because section 292BB cures defects in service but does not dispense with the statutory requirement to issue the notice. On that footing, the reassessment could not support revisionary action under section 263, and the defect could be raised even in collateral or consequential proceedings. The Tribunal accepted the additional ground as a pure question of law arising from the record and treated the reassessment and the revision based on it as unsustainable in law.

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Issues: Whether reassessment proceedings and the consequential revisionary action could be sustained when notice under section 143(2) of the Income-tax Act, 1961 was not issued or was not available on record, and whether such defect could be challenged in collateral proceedings.

Analysis: The Tribunal accepted the additional legal ground as it involved a pure question of law arising from the existing record. Relying on the mandatory character of notice under section 143(2), it held that where reassessment is completed without such notice, the assessment becomes invalid and a nullity. It further held that section 292BB of the Income-tax Act, 1961 cures defects in service of a notice but does not dispense with the requirement of issuing a notice that the statute mandates. On that basis, the reassessment order could not form a valid foundation for revision under section 263. The Tribunal also held that the assessee was entitled to question the invalidity of the assessment in collateral or consequential proceedings.

Conclusion: The reassessment was held to be bad in law and void, the revisionary proceedings based on it were unsustainable, and the assessee succeeded on the additional ground.

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