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2022 (4) TMI 1324 - HC - Income TaxValidity of assessment - Non issuance of notice under Section 143(2) - HELD THAT - The Supreme Court in Commissioner of Income-Tax vs. Laxman Das Khandelwal 2019 (8) TMI 660 - SUPREME COURT has clearly stated that the scope of Section 292BB is to make service of notice having certain infirmities to be proper and valid. However, the section does not save complete absence of notice. For section 292BB to apply, the notice must have emanated from the Department. It is only the infirmities in the manner of service of notice that the section seeks to cure. In fact, a Division Bench of this Court in Pr.Commissioner of Income-tax Vs. Shri Jai Shiv Shankar Traders (P.) Ltd. 2015 (10) TMI 1765 - DELHI HIGH COURT has categorically held that the failure of the AO, in re-assessment proceedings, to issue notice under Section 143(2) of the Act, prior to finalising the re-assessment order, cannot be condoned by referring to Section 292BB of the Act. On the basis of admitted fact that notice under Section 143(2) of the Act was not issued within the period of six months prescribed for the purpose, jurisdiction assumed by the Assessing Officer under Section 143(3) of the Act was assumed erroneously. Appeal of assessee allowed.
Issues:
Challenge to ITAT order dated 23rd March, 2021 in ITA No. 456/Del/2015 for the assessment year 2011-12. Analysis: 1. The appellant challenged the ITAT order, arguing that the respondent-assessee cooperated in the assessment proceedings without objecting to the non-service of notice under Section 143(2) of the Income Tax Act, 1961. The appellant contended that the assessee cannot later claim the notice was not issued in time under Section 292BB of the Act. 2. The appellant highlighted the error by the Tribunal in disregarding Section 124(3) of the Act, which states that the jurisdiction of the Assessing Officer cannot be challenged after one month from the notice under Section 143(2) or after completion of assessment proceedings. 3. The appellant referred to the interpretation of Section 292BB by the Supreme Court in a previous case, emphasizing that the section deems notice served if the assessee participated in the proceedings. However, the section does not cure the complete absence of notice itself. 4. The Court agreed with the Tribunal that Section 292BB does not condone the failure or delay in issuing the statutory notice under Section 143(2) of the Act. It was clarified that Section 292BB deals with the failure of service of notice, not the failure to issue notice. 5. The Court referenced previous judgments to support its decision, stating that Section 292BB applies to notice service infirmities and does not save the absence of notice. It was reiterated that failure to issue a notice under Section 143(2) cannot be condoned by Section 292BB. 6. The Court emphasized that the failure to issue the notice within the prescribed period rendered the assumption of jurisdiction by the Assessing Officer under Section 143(3) erroneous. The issue of jurisdiction is fundamental and can be raised at any stage, including appeal. 7. Ultimately, the Court concluded that no substantial question of law arose in the appeal, leading to the dismissal of the appeal challenging the ITAT order. The judgment highlighted the importance of adhering to statutory notice requirements and the significance of jurisdictional issues in tax assessments.
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