S. 147:Assessment – Reassessment292BB Delay in issue of notice under section 143(2), notice renders assessment invalid. (S. 292BB)

The Assessing Officer issued a notice under section 148 to reopen the assessment. Though the
assessee filed a ROI, the Assessing Officer did not issue the section 143(2) notice within the
prescribed period but passed a draft assessment order under section 144C. The Court had to
consider (a) what is the effect of the failure to issue notice under section 143(2) within the period
stipulated in the proviso to clause (ii) and (b) the effect of section 292BB of the Act. HELD by the
Court quashing the assessment proceedings:
(i) The service of notice under section 143(2) within the statutory time limit is mandatory and is
not an inconsequential procedural requirement. Omission to issue notice under section 143(2) is
not curable and the requirement cannot be dispensed with. Section 143(2) is applicable to
proceedings under section 147 & 148. While the Proviso to section 148 protects and grants liberty
to the Revenue to serve notice under section 143(2) before passing of the assessment order for
returns furnished on or before 1.10.2005, in respect of returns filed pursuant to notice under
section 148 after 1.10.2005, it is mandatory to serve notice under section 143(2) within the
stipulated time limit (Hotel Blue Moon 321 ITR 362 (SC) referred).
(ii) Section 292BB incorporates the principle of estoppels and stipulates that an assessee who has
appeared in any proceeding and co‐operated in any enquiry relating to assessment or reassessment
shall be deemed to be served with any notice which was required to be served and would be
precluded from objecting that the notice was not served upon him or was served upon him in an
improper manner or was not served upon him in time. However, the principle of estoppels does not
apply if the assessee has raised objection in reply to the notice before completion of assessment or
reassessment. As the Assessing Officer had passed a draft assessment order and the assessee had
raised an objection before completion of assessment, the estoppel in section 292BB did not apply
and the section 147 proceedings could not continue.
Alpine Electronics Asia Pte Ltd. v. DGIT( 2012) 341 ITR 247 (Delhi)(High Court) http://www.itatonline.org/