TaxTMI 
TaxTMI 
2024 (9) TMI 369
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....that a failure to issue a notice referable to that provision would be fatal and render the entire proceedings invalid. 3. While considering these two writ petitions, we had in W.P.(C) 10298/2022 taken note of a contention addressed on behalf of the respondents who had sought to canvass the contention that the challenge would not sustain bearing in mind the decision rendered by the Court in Ashok Chaddha vs. Income-tax Officer 2011 SCC Online Del 3108. 4. It becomes pertinent to note that Ashok Chaddha was principally concerned with the issue of whether a Section 143 notice and the procedure prescribed therein was liable to be followed while undertaking an assessment under Section 153A. While dealing with the aforesaid, the Court had come to hold as follows:- "11. It is also to be noted that section 153A provides for the procedure for assessment in case of search or requisition. Sub-section (1) starts with a non obstante clause stating that it was "notwithstanding" anything contained in sections 147, 148 and 149, etc. Clause (a) thereof provides for issuance of notice to the person searched under section 132 or where documents, etc., are requisitioned under section 132A, to furn....
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....n writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him." 5. Mr. Vipul Agrawal, learned counsel appearing for the respondents, had submitted that bearing in mind the similarity in the language of the two provisions, the decision in Ashok Chaddha is clearly an authority for the proposition that a failure to issue a notice under Section 143 (2) would not render the proceedings a nullity. It was Mr. Agrawal's submission that the decision in Ashok Chaddha clearly appears to have escaped the attention of the various subsequent decisions handed down by this Court in the context of Section 143 (2) and its mandatory application to proceedings pertaining to reassessment. 6. We find ourselves unable to sustain that contention for the following reasons. 7. It must at the outset be borne in mind that Ashok Chaddha was principally concerned with an assessment which was predicated upon a search and thus the same being regulated by Section 153A of the Act. It was in the aforesaid context that the Court noted that the Assessing Officer [AO] while undertaking a search assessment was ....
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...., learned Advocate, appearing for the Respondent submitted that the notice under Section 143 (2) of the Act was never issued which was evident from the orders passed on record as well as the stand taken by the Appellant in the memo of appeal. It was further submitted that issuance of notice under Section 143 (2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid. 8. The law on the point as regards applicability of the requirement of notice under Section 143 (2) of the Act is quite clear from the decision in Hotel Blue Moon's case (supra). The issue that however needs to be considered is the impact of Section 292BB of the Act. 9. According to Section 292BB of the Act, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice ....
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....atory and the Legislature in its wisdom by using the word "reason to believe" had cast a duty on the Assessing Officer to apply mind to the material on record and after being satisfied with regard to escaped liability, shall serve notice specifying particulars of such claim. In view of the above, after receipt of return in response to notice under section 148, it shall be mandatory for the Assessing Officer to serve a notice under sub-section (2) of section 143 assigning reason therein... in absence of any notice issued under sub-section (2) of section 143 after receipt of fresh return submitted by the assessee in response to notice under section 148, the entire procedure adopted for escaped assessment, shall not be valid.' 15. In a subsequent judgment in CIT v. Salarpur Cold Storage (P.) Ltd.3, it was held as under: '10. Section 292BB of the Act was inserted by the Finance Act, 2008 with effect from April 1, 2008. Section 292BB of the Act provides a deeming fiction. The deeming fiction is to the effect that once the assessee has appeared in any proceeding or co-operated in any enquiry relating to an assessment or reassessment, it shall be deemed that any notice under t....
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....ing Officer ought to have followed up with a notice under section 143 (2) of the Act. It was observed that: 'Merely because the matter was discussed with the assessee and the signature is affixed it does not mean the rest of the procedure of notice under section 143 (2) of the Act was complied with or that on placing the objection the assessee had waived the notice for further processing of the reassessment proceedings. The fact that on the notice issued under section 143 (2) of the Act, the assessee had placed its objection and reiterated its earlier return filed as one filed in response to the notice issued under section 148 of the Act and the Officer had also noted that the same would be considered for completing of assessment, would show that the Assessing Officer has the duty of issuing the notice under section 143 (3) to lead on to the passing of the assessment. In the circumstances, with no notice issued under section 143 (3) and there being no waiver, there is no justifiable ground to accept the view of the Tribunal that there was a waiver of right of notice to be issued under section 143 (2) of the Act' 18. As already noticed, the decision of this court in CIT v. Visio....
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....rent even if the returns were filed in the regular course. Mr Dileep Shivpuri relied on the decision of this Court in Ashok Chaddha v. ITO: (2011) 337 ITR 399 (Delhi) in support of its contention that no notice under Section 143 (2) was required to be issued." 12. Having noticed the aforesaid contention, the Division Bench proceeded to hold as under:- "9. It is now well established that if the AO does not accept the return filed by the Assessee on its face and he is required to issue a notice under Section 143 (2) of the Act and provide an opportunity to the Assessee to produce the necessary material in support of his return. Mr Shivpuri had argued that a notice under Section 143 (2) was required to be issued only in cases where the AO considers it necessary or expedient to do so and in cases where the Assessee had not filed its response to the notice under Section 142 (1) it was not necessary for the AO to issue such notice under Section 143 (2). In our view, this contention is bereft of any merits and completely ignores the scheme of the machinery provisions for assessment under the Act. It is now well settled by a number of decisions (See: Pr. CIT v. Silver Line and Anr.: 283....