The jurisdictional validity of reassessment proceedings hinges fundamentally on compliance with statutory safeguards embedded in the Income-tax Act, 1961. Among these, issuance of notice under Section 143(2) occupies a central and non-negotiable position. The decision of the Allahabad High Court in Principal Commissioner of Income Tax v. Ashish Gupta decisively reiterates that failure to issue notice under Section 143(2) renders reassessment proceedings void ab initio, and that such a defect cannot be cured by invoking Section 292B, even where the return filed in response to notice under Section 148 is alleged to be non-verified or defective.

The appeal before the High Court arose from an order of the Income Tax Appellate Tribunal, Delhi Bench, which had affirmed the order of the Commissioner of Income Tax (Appeals) setting aside the reassessment order passed under Section 147 read with Sections 144 and 144B of the Act for Assessment Year 2015–16. Primarily, for the reason that no notice under Section 143(2) was issued to the assessee, the reassessment proceedings were set aside by the CIT (Appeals), and that finding stood confirmed by the Tribunal.

The factual foundation of the case was not in dispute. The assessee had originally filed a return under Section 139(1) declaring taxable income of ₹9,42,790/-. Pursuant to issuance of notice under Section 148, the assessee filed another return on 25.05.2021, declaring the same income. Crucially, the Assessing Officer computed the reassessed income on the basis of the figures disclosed in the return so filed, without relying upon any external or independent material. It was also an admitted position that no notice under Section 143(2) was ever issued during the reassessment proceedings.

The principal objection raised by the Revenue was that the return filed in response to the notice under Section 148 was non est, as it was allegedly filed beyond the stipulated time and was not e-verified within the prescribed period. On this basis, it was contended that issuance of notice under Section 143(2) was not mandatory. This objection was categorically rejected by the High Court.

The Court noted that the CIT (Appeals) and the Tribunal had examined this issue in detail and recorded a clear factual finding that the Assessing Officer himself had acted upon the return filed by the assessee, treating it as a valid return for the purpose of reassessment. Once the Assessing Officer proceeds to compute income on the strength of a return filed in response to Section 148, the statutory obligation to issue notice under Section 143(2) becomes unavoidable. The Revenue could not be permitted to simultaneously rely upon the return for computation while denying the assessee the procedural protection flowing from it.

The High Court further observed that the defect of non-verification was, in any event, purely technical in nature, particularly when the assessee had e-verified the return immediately upon the defect being pointed out. The Court held that substantial compliance stood established, and the Revenue’s attempt to elevate a curable technical lapse into a jurisdiction-saving argument was wholly misconceived.

Placing reliance on the authoritative decision of the Supreme Court in Assistant Commissioner of Income Tax v. Hotel Blue Moon, the Court reiterated that issuance of notice under Section 143(2) is not a procedural formality but a jurisdictional requirement. The omission to issue such notice goes to the root of the matter and is not curable under Section 292B of the Act, regardless of the stage at which the defect is noticed. The High Court emphasized that statutory safeguards cannot be diluted by administrative convenience or technical objections raised ex post facto.

The Court also took note of the fact that the assessee’s request for supply of “reasons to believe” for reopening had never been complied with, further reinforcing the conclusion that the reassessment proceedings suffered from serious jurisdictional infirmities. However, the Court made it clear that even independently of that lapse, the failure to issue notice under Section 143(2) was sufficient to invalidate the reassessment in its entirety.

Final Determination :-The High Court held that no substantial question of law arose for consideration, and that the questions framed by the Revenue deserved to be answered against the Revenue and in favour of the assessee. It was conclusively held that reassessment proceedings stood vitiated solely on account of non-issuance of notice under Section 143(2), a defect not curable under Section 292B, notwithstanding any alleged non-verification of the return. Accordingly, the appeal filed by the Revenue was dismissed.

This decision reinforces a well-settled but frequently contested principle of tax jurisprudence: jurisdictional defects cannot be cured by procedural arguments. The ruling serves as a clear warning that non-issuance of notice under Section 143(2) strikes at the very foundation of reassessment proceedings, and that Revenue cannot approbate and reprobate by treating a return as valid for computation while denying the statutory consequences flowing therefrom.

Disclaimer :-This article is intended solely for academic, informational, and professional discussion purposes. It is based on the judgment of the Allahabad High Court in Principal Commissioner of Income Tax & Another v. Ashish Gupta and reflects the legal position emerging therefrom as on the date of the decision. It does not constitute legal or tax advice and should not be relied upon as a substitute for professional consultation. Readers are advised to seek independent expert advice before acting on any issue discussed herein.