Wazeera Saleh Mithiborwala Vs DCIT (ITAT Mumbai)
Assessee filed return declaring ₹1.24 Cr income. Based on Investigation Wing information alleging bogus long-term capital gains from penny stocks, AO reopened the case u/s 148. Assessee filed return in response, but did not furnish further details or comply with summons. AO completed assessment u/s 144 r.w.s. 147 & added ₹5.45 Cr u/s 68, denying exemption u/s 10(38). CIT(A) upheld the assessment.
Before the ITAT, Assessee raised a legal ground that no notice u/s 143(2) was issued after filing the return in response to 148. Tribunal asked the Department to produce proof of issuance of 143(2) notice, but Revenue failed to produce any notice or record.
Revenue argued that participation in proceedings cures the defect u/s 292BB. However, the Tribunal relied on Supreme Court rulings in CIT v. Laxman Das Khandelwal (2019) & ACIT v. Hotel Blue Moon (2010) which clearly hold:
Notice u/s 143(2) is mandatory.
Section 292BB cures only defects in service, NOT complete absence of notice.
Since it was undisputed that no 143(2) notice was ever issued, the reassessment was held void & without jurisdiction.
Assessment u/s 144 r.w.s. 147 was quashed in entirety. Other grounds on merits (penny stock addition) were kept open. Assessee’s appeal allowed.
