SC: Non-issuance of notice under section 143(2) is not a curable defect under section 292BB

Question: Is non-issuance of notice under section 143(2) by the Assessing Officer a defect not curable under section 292BB inspite of participation by the assessee in assessment proceedings?

Relevant provision of the Income-tax Act, 1961: Issue of notice under section 143(2) is mandatory for making a regular assessment under section 143(3). Section 292BB is a deeming provision that seeks to cure defects in  any notice  issued under any provision of the  Income-tax Act, 1961, if the assessee has participated in the proceedings. Section 292BB provides that where the assessee has participated in the proceedings, any notice which is required to be served upon him shall be deemed to have been duly served and the assessee would be precluded from taking any objection that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner.

Issue: The issue under consideration is whether the Assessing Officer’s omission to issue notice under section 143(2) is a defect not curable under section 292BB in spite of participation by the assessee in assessment proceedings.

Supreme Court’s Observations: The law on the point as regards applicability of the requirement  of issue of notice under section 143(2) is quite clear. According to section 292BB, if the assessee had participated in the proceedings, by way of legal fiction, notice issued would be deemed to be valid even if there be infractions as detailed in the 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 the part of the assessee. It is, however, to be noted that the section does not save complete absence of issue 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.

Supreme Court’s Decision: The Supreme Court held that non-issuance of notice under section 143(2) is not a curable defect under section 292BB inspite of participation by the assessee in assessment proceedings.

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