Supreme Court: missing Section 143(2) notice voids tax reassessment

The case concerns whether reassessment proceedings are valid if the Assessing Officer failed to issue a mandatory notice under Section 143(2) of the Income Tax Act, 1961, and whether an assessee's participation in the proceedings cures this defect under Section 292BB.

Who it concerns: Appellant: Principal Commissioner of Income Tax, Bhubaneswar; Respondents: Orissa Mining Corporation Ltd. and Bijoy Kishore Mohanty; Bench: Justice Sanjeev Sachdeva.

What the court decided

• The Court held that a notice under Section 143(2) is a sine qua non for reassessment proceedings and its omission is not a curable procedural irregularity.
• The Court ruled that Section 292BB does not apply where the Revenue admits that no notice was issued, as the deeming fiction only applies to notices that were sent but allegedly served improperly or late.
• The Court determined that mere participation by the assessee in the proceedings does not confer jurisdiction on the Assessing Officer to frame an assessment if the Section 143(2) notice was not issued.
• The Court held that a letter under Section 142(1) requiring an explanation is not sufficient compliance with the requirements of Section 143(2).
• The Court concluded that the reassessment proceedings were vitiated and invalid due to the non-issuance of the Section 143(2) notice.

Also in the document

• The judgment is marked as 'Reportable'.
• The Court relied on the precedent set in 'Assistant Commissioner of Income Tax and Another vs. Hotel Blue Moon' (2010) 3 SCC 259.
• The Court clarified that an assessee can choose to treat their earlier return under Section 139 as the response to a Section 148 notice without refiling, but this does not dispense with the Revenue's obligation to issue a Section 143(2) notice.