Parama Construction Pvt. Ltd. Vs ITO (ITAT Kolkata)
This case deals with a reassessment u/s 147 that was completed without issuing a mandatory notice u/s 143(2)-making the entire assessment void in law.
Assessee originally filed its return on 16.03.2012 declaring income of ₹77,360. The case was reopened by issuing notice u/s 148 on 30.03.2016. Assessee filed a return in response on 21.12.2016 declaring the same income. AO treated this return as “non-est” (invalid) because it was filed beyond the time allowed. However, while framing assessment u/s 144/147, AO used the income declared in this very return as the base and added ₹2.35 crore u/s 68 (share application money/premium), thereby assessing ₹2,34,77,316.
Crucial fact:
AO never issued a notice u/s 143(2) after Assessee filed the return in response to notice u/s 148. DR even admitted that no 143(2) notice was issued, arguing that since the return was non-est, notice was unnecessary.
However, Tribunal held that:
- If the AO treats the return as “non-est”, he cannot simultaneously rely on it to compute income.
- Once the AO takes the return into account, it becomes a valid return in law.
- As held by the Delhi High Court in PCIT v. Dart Infrabuild (2023), if the return filed in response to 148 is considered in assessment, issue of notice u/s 143(2) is mandatory, even if the return was filed late.
Tribunal relied on its own recent decision in Rishi Anand v. ITO (15.09.2025) which dealt with identical facts and held that failure to issue 143(2) notice after a return to 148 is fatal. The Tribunal quoted Dart Infrabuild (Delhi HC) which clearly stated that AO cannot accept the return for computation and simultaneously deny the need for 143(2).
