Income Tax Act, 1961: s. 143(2) – Absence of notice u/s. 143(2) – However, assessee participated in the assessment proceedings – Effect of, on re-assessment proceedings – Impact of s. 292 BB – Held: Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was not served upon him; or not served upon him in time; or served upon him in an improper manner – Scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee – However, the Section does not save complete absence of notice – For s. 292BB to apply, the notice must have emanated from the department – It is only the infirmities in the manner of service of notice that the Section seeks to cure – On facts, since no notice u/s. 143(2) was ever issued by the Department, the High Court and the tribunal rightly quashed the reassessment proceedings since the same stood vitiated as the Assessment Officer lacked jurisdiction in the absence of notice u/s. 143(2) of the Act.
Dismissing the appeals, the Court
HELD: A closer look at Section 292BB of the Income Tax Act, 1961 shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was not served upon him; or not served upon him in time; or served upon him in an improper manner. According to Section 292BB, if the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save complete absence of notice. For Section 292BB to apply, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered by the High Court and the Tribunal and the conclusion arrived at that the reassessment proceedings are quashed since the same stood vitiated as the Assessment Officer lacked jurisdiction in the absence of notice u/s.143(2) of the Act, were correct. [Para 7, 9, 10, 3] [29-F; 30-C-E]
ACIT v. Hotel Blue Moon (2010) 321 ITR 362 ; Assistant Commissioner of Income Tax and Another v. Hotel Blue Moon (2010) 3 SCC 259 : [2010] 2 SCR 282 - referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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