Arun Kumar Maurya Vs ACIT/ITO (ITAT Lucknow)
ITAT Quashed Reassessment Due to Failure to Issue Section 143(2) Notice even if ITR filed after time given in notice u/s 148
The appeal before the Income Tax Appellate Tribunal (ITAT), Lucknow, arose from an assessment order passed under Section 147 of the Income Tax Act, 1961, determining the assessee’s income at ₹4.40 crore for Assessment Year 2014–15. The assessee challenged the additions made under Sections 69 and 56(2)(vii)(b), alleging non-consideration of submissions, improper application of amended provisions, failure to refer valuation to the Departmental Valuation Officer (DVO), and violation of principles of natural justice. An additional legal ground was raised that the assessment was invalid due to non-issuance of mandatory notice under Section 143(2).
The Tribunal admitted this additional ground, noting that the assessee had filed a return on 16.03.2022 in response to notice under Section 148, and had informed the Assessing Officer (AO) accordingly. Despite this, the AO passed the assessment order on 19.03.2022 without issuing notice under Section 143(2). The Tribunal observed that issuance of such notice is a mandatory jurisdictional requirement for scrutiny assessment and is necessary to inform the assessee of proposed examination of the return.
It was held that failure to issue notice under Section 143(2) is not a procedural irregularity but a fatal defect that renders the assessment void. The Tribunal emphasized that even if the return was filed belatedly, the AO was obligated to either proceed with best judgment assessment under Section 144 before filing of return or issue notice under Section 143(2) after the return was filed. Once the return was filed, the AO could not disturb the declared income without complying with this mandatory requirement.
