The ITAT held that reassessment proceedings are invalid if no mandatory notice under Section 143(2) is issued after filing ITR in response to Section 148 notice.
Saloni Kumari | Apr 18, 2026 |
Reassessment Proceedings Are Invalid Without Section 143(2) Notice, Says ITAT
The ITAT Delhi quashed the reassessment order, holding that once a taxpayer filed its ITR in response to the notice issued under Section 148, thereafter the tax authorities are compelled to issue another notice under Section 143(2) in their next step. In the absence of this notice, the entire reassessment proceedings are considered invalid.
The case of Sitanshu Gupta (assessee or appellant) was reopened based on the information received from the Deputy Director of Income Tax (Investigation)-1, Faridabad. In conclusion of the reassessment, the tax authorities had made an addition amounting to Rs 2.23 crore to the assessee’s income.
The assessee, being aggrieved with the reassessment order, filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]; however, his appeal was rejected. Thereafter, the assessee filed another appeal before the Income Tax Appellate Tribunal (ITAT), Delhi, arguing that the tax authorities had not issued the mandatory notice under Section 143(2) of the Income Tax Act after the issuance of the Section 148 notice. The tax authorities argued that under Section 292BB, the assessee has no right to highlight this topic at a later stage since, during the assessment proceedings in the present, he had not raised an objection regarding this issue.
When the tribunal analysed the case, it noted that the tax authorities had failed to issue a mandatory notice under Section 143(2) of the Income Tax Act. Which ultimately makes the entire reassessment proceedings invalid. The ITAT held that once an income tax return (ITR) is filed in response to a notice under Section 148, it becomes mandatory for the tax authorities to pass a notice under Section 143(2) in their next step. However, in the present case, no such notice was issued by the tax authorities.
To support this ruling, the tribunal also cited an earlier judgement of the Supreme Court of India in the case of Laxman Das Khandelwal, based on the same issue. The tribunal further flagged that Section 292BB only applies to cases where there is a defect in serving a notice, not where no notice was issued at all. Therefore, this defect could not be corrected.
In conclusion to the aforementioned findings, the tribunal quashed the impugned reassessment order and held in favour of the assessee.
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