Section 292BB cannot cure jurisdictional error; Time-barred Notice cannot be deemed as valid

Dr. N. Madhava Reddy Vs. ACIT (ITAT Hyderabad)

Facts of the Case

To complete the assessment u/s 143(3), the AO has to issue notice u/s 143(2) to get the jurisdiction to complete the assessment u/s 143(3). As per the provisions of section 143(2), AO has to issue the notice u/s 143(2) within 6 months from the end of the financial year in which the return is furnished. In the given case, AO must issue notice on or before 30/09/2009. But the notice was issued on 20/10/2009. Is the action of the AO proper and the provisions of section 292BB will come to rescue in the given facts of the case ? As per the ratio laid down in the case of PCIT Vs. Silver Line (supra), the Hon’ble Delhi High Court has clearly held a reassessment order cannot be passed without compliance with the mandatory requirement of notice u/s 143(2) being issued as the requirement of issuance of such notice is a jurisdictional one and section 292BB cannot cure jurisdictional error.

Held by ITAT

section 292BB cannot be applied in the given case because the issue is not serving of notice but issue of notice to acquire the jurisdiction to complete the assessment u/s 143(3). Therefore, in the given case, issue is not serving of notice but issue of notice within the period of limitation prescribed in proviso to section 143(2) to complete the assessment u/s 143(3). It is clear from the record that AO has issued the notice u/s 143(2) only on 20/10/2009 instead of issuing the notice on or before 30/09/2009. It clearly shows that the AO has no jurisdiction to complete the assessment u/s 143(3). Hence, the assessment completed u/s 143(3) cannot be passed without compliance with the mandatory requirement of notice being issued u/s 143(2), therefore, the assessment order in question is legally unsustainable and the same is hereby quashed.

Author Info

Name: CA Sandeep Kanoi

Qualification: CA in Job / Business

Company: Taxguru Consultancy

Location: Mumbai, Maharashtra

Articles Published: 20,910

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