The Supreme Court has held that Section 292BB of the Income Tax Act, 1961 does not stop an assessee from objecting to the non-issuance of a notice under Section 143(2), even if the assessee took part in reassessment proceedings without raising the objection. The Court dismissed a batch of appeals filed by the Revenue.
A Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva also held that the Revenue must issue a Section 143(2) notice even where the assessee asks that its original return be treated as the return filed in response to a Section 148 notice.
Background
The appeals involved Orissa Mining Corporation Ltd. for Assessment Years 2008-09, 2010-11 and 2011-12, and Bijoy Kishore Mohanty for Assessment Years 2009-10 and 2010-11. In each case, the original returns had been assessed under Section 143(3). The Revenue later reopened the assessments under Section 147 and issued notices under Section 148.
Orissa Mining Corporation asked that its original return be treated as its response to the Section 148 notice, while Mohanty refiled the same return. Admittedly, no notice under Section 143(2) was issued. The reassessment went ahead, with notices under Section 142(1) seeking documents and stock information.
The Commissioner of Income Tax (Appeals) rejected the assessees’ objection on the missing notice, holding that they had participated in the proceedings. The Income Tax Appellate Tribunal, however, set aside the reassessment orders for want of a Section 143(2) notice, and the High Court upheld that view.
Before the Supreme Court, the Revenue’s stand was that the notice was not required, its absence was not fatal, and Section 292BB protected the proceedings.
Court’s Findings
Relying on Assistant Commissioner of Income Tax v. Hotel Blue Moon, the Court reiterated that a Section 143(2) notice is a sine qua non for reassessment under Section 147, and that failing to issue it is not a curable procedural irregularity.
On Section 292BB, the Bench explained that the deeming fiction only bars objections about service, timely service or proper service of a notice. It observed:
“Such a deeming fiction can come into play only if notice is alleged to have been sent by the Revenue.”
Where the Revenue itself admits that no notice was sent, the provision has no application. The Court held:
“Mere participation of the Assessee in the assessment proceedings, in the absence of a notice under Section 143(2) of the Act, does not confer jurisdiction on the Assessing Officer to frame an assessment under Section 143 (3) of the Act.”
It noted that in Commissioner of Income Tax v. Laxman Das Khandelwal, the Court had held that Section 292BB does not save a complete absence of notice.
The Bench said an assessee responding to a Section 148 notice may file a fresh return or simply state that the earlier return be treated as its return. In either case, the Revenue’s duty to issue a Section 143(2) notice cannot be dispensed with.
On the Section 142(1) letters, the Court held that they do not satisfy the requirement of a Section 143(2) notice, adding:
“A letter issued after commencing the proceedings would not cover up the lacuna in the proceedings and would not validate what is non est.”
Outcome
Finding no infirmity in the Tribunal’s view as affirmed by the High Court, the Supreme Court answered all three questions against the Revenue and dismissed the appeals.
Case Title: Principal Commissioner of Income Tax, Bhubaneshwar v. Orissa Mining Corporation Ltd.
Case No.: Civil Appeal arising out of SLP (C) No. 14546 of 2023 and connected appeals
Bench: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Date: 28.10.2026
