Assessment with notice u/s 143(2) prior to filing of return of income is invalid

Pr. CIT Vs Marck Biosciences Ltd. (Gujarat High Court)

Conclusion: Notice under section 143(2) was issued prior to the filing of the return of income which was invalid and the assessment order passed would also be invalid.

Held: AO had recorded reasons for reopening the assessment on 20.07.2010 and issued notice under section 148 on 04.10.2010 seeking to reopen the assessment of assessee for assessment year 2005-06. In response to the notice under section 148, assessee had asked AO to consider the earlier return of income filed by it as the return filed in response to the notice. Notice under section 143(2) had been issued to the assessee on 12.03.2010 only, that was, prior to the communication dated 19.07.2010 of assessee, informing AO to treat the earlier return filed by it as the return filed in response to the notice under section 148. Nonetheless, the assessment proceedings proceeded further pursuant to the notice under section 148 came to be concluded by an assessment order dated 07.01.2011 made under section 143(3) read with section 147. It was held non-­issuance of a notice under section 143(2) was not a procedural irregularity, the same could not be cured under section 292BB and hence, the assessment order passed without issuance of notice under section 143(2), would be rendered invalid. Thus, the notice issued prior to the filing of the return of income was invalid and that, in absence of a valid notice under section 143(2), the assessment order was rendered invalid.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

1. By this appeal under section 260A of the Income ­tax Act, 1961 (hereinafter referred to as “the Act”), the appellant has called in question the order dated 14.02.2018 made by the Income Tax Appellate Tribunal, Ahmedabad ‘A’ Bench in I.T.A. No.1506/AHD/2014 (hereinafter referred to as the “Tribunal”) by proposing the following questions, stated to be substantial questions of law:

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