1. Reassessment proceedings initiated under Section 147 of the Income Tax Act without the issuance of a mandatory notice under Section 143(2) of the Act. (Para 4 , 5 , 6 )
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2026 Supreme(SC) 1303
SUPREME COURT OF INDIA
SANJAY KUMAR, SANJEEV SACHDEVA, JJ.
Principal Commissioner Of Income Tax, Bhubaneshwar – Appellant
Versus
Orissa Mining Corporation Ltd. – Respondent
Civil Appeal No 4741 of 2026 (@ Special Leave Petition (C) No. 14546 of 2023) With Civil Appeal No. 13960 of 2026 (@ Special Leave Petition (C) No. 25931 of 2026) Civil Appeal No. 13961 of 2026 (@ Special Leave Petition (C) No. 25932 of 2026) Civil Appeal No. 13962 of 2026 (@ Special Leave Petition (C) No. 3350 of 2024) Civil Appeal No. 13963 of 2026 (@ Special Leave Petition (C) No. 25882 of 2026)
Decided On : 28-10-2026
Important Points
Notice under Section 143(2) is mandatory for reassessment under Section 147. Section 292BB cures defects in the service of a notice but cannot validate the total non-issuance of a mandatory notice, regardless of the assessee's cooperation, participation, or the issuance of a notice under Section 142(1).
Subject
Tax Law - Direct Tax
Act Referred
Headnote
(A) Income Tax Act, 1961 - Sections 143(2), 143(3), 147, 148, 142(1), and 292BB - Mandatory nature of notice under Section 143(2) - Service of notice vs. Non-issuance - Issuance of a notice under Section 143(2) is mandatory and a sine qua non for a proceeding for reassessment under Section 147; omission to issue such notice is not a curable procedural irregularity (Paras 12, 13 and 20).
(B) Section 292BB - Deeming fiction regarding service of notice - The provision precludes an assessee from objecting to the manner or timing of service of a notice required to be served, provided the notice was actually issued; however, this deeming fiction cannot apply where the Revenue has admittedly not issued the notice at all (Paras 15 and 16).
(C) Participation in proceedings - Mere participation or cooperation by the assessee in reassessment proceedings does not confer jurisdiction on the Assessing Officer to frame an assessment under Section 143(3) in the absence of a notice under Section 143(2), nor does it attract the application of Section 292BB to cure the non-issuance of the mandatory notice (Paras 17 and 21).
(D) Return of Income - Where an assessee requests that a return originally filed under Section 139 be treated as the return in response to a notice under Section 148, the obligation of the Revenue to issue a notice under Section 143(2) remains and cannot be dispensed with (Para 18). (E) Section 142(1) vs. Section 143(2) - A letter or notice issued under Section 142(1) during reassessment proceedings does not satisfy the mandatory requirements of a notice under Section 143(2), as the latter is required for commencing the proceedings (Para 22).
Facts of the case:
Returns of income were filed under Section 139 and subsequently assessed. The Revenue later sought to reopen assessments under Section 147 and issued notices under Section 148. The assessees either requested their original returns be treated as responses to the Section 148 notices or refiled them. Although notices under Section 142(1) were issued, no notice under Section 143(2) was served. Reassessment orders were subsequently framed, which were challenged. The Tribunal and High Court set aside the assessments on the ground that the lack of a notice under Section 143(2) vitiated the proceedings.
Findings of Court:
The court found that the failure to issue a notice under Section 143(2) is fatal to the reassessment proceedings. It held that Section 292BB only cures defects in the service of a notice that was actually sent and cannot validate the complete absence of a mandatory notice. Furthermore, using a previous return as a response to a Section 148 notice or issuing a notice under Section 142(1) does not waive or fulfill the statutory requirement of Section 143(2).
Issues: (i) Whether Section 292BB precludes an assessee from objecting to the non-issuance of a notice under Section 143(2) if the assessee cooperated in reassessment proceedings; (ii) Whether a notice under Section 143(2) is required if the assessee requests that an earlier return be treated as the return filed in response to a notice under Section 148; and (iii) Whether a letter issued under Section 142(1) amounts to compliance with Section 143(2).
Ratio Decidendi: Notice under Section 143(2) is a mandatory prerequisite for assessing total income under Section 143(3) read with Section 147. The deeming provision of Section 292BB applies only to the validity of service, not to the non-existence of the notice. Mandatory statutory requirements cannot be bypassed by the assessee's participation or by the issuance of a non-substitutable notice under Section 142(1).
Result: Appeals dismissed.
(B) Section 292BB - Deeming fiction regarding service of notice - The provision precludes an assessee from objecting to the manner or timing of service of a notice required to be served, provided the notice was actually issued; however, this deeming fiction cannot apply where the Revenue has admittedly not issued the notice at all (Paras 15 and 16).
(C) Participation in proceedings - Mere participation or cooperation by the assessee in reassessment proceedings does not confer jurisdiction on the Assessing Officer to frame an assessment under Section 143(3) in the absence of a notice under Section 143(2), nor does it attract the application of Section 292BB to cure the non-issuance of the mandatory notice (Paras 17 and 21).
(D) Return of Income - Where an assessee requests that a return originally filed under Section 139 be treated as the return in response to a notice under Section 148, the obligation of the Revenue to issue a notice under Section 143(2) remains and cannot be dispensed with (Para 18). (E) Section 142(1) vs. Section 143(2) - A letter or notice issued under Section 142(1) during reassessment proceedings does not satisfy the mandatory requirements of a notice under Section 143(2), as the latter is required for commencing the proceedings (Para 22).
Facts of the case:
Returns of income were filed under Section 139 and subsequently assessed. The Revenue later sought to reopen assessments under Section 147 and issued notices under Section 148. The assessees either requested their original returns be treated as responses to the Section 148 notices or refiled them. Although notices under Section 142(1) were issued, no notice under Section 143(2) was served. Reassessment orders were subsequently framed, which were challenged. The Tribunal and High Court set aside the assessments on the ground that the lack of a notice under Section 143(2) vitiated the proceedings.
Findings of Court:
The court found that the failure to issue a notice under Section 143(2) is fatal to the reassessment proceedings. It held that Section 292BB only cures defects in the service of a notice that was actually sent and cannot validate the complete absence of a mandatory notice. Furthermore, using a previous return as a response to a Section 148 notice or issuing a notice under Section 142(1) does not waive or fulfill the statutory requirement of Section 143(2).
Issues: (i) Whether Section 292BB precludes an assessee from objecting to the non-issuance of a notice under Section 143(2) if the assessee cooperated in reassessment proceedings; (ii) Whether a notice under Section 143(2) is required if the assessee requests that an earlier return be treated as the return filed in response to a notice under Section 148; and (iii) Whether a letter issued under Section 142(1) amounts to compliance with Section 143(2).
Ratio Decidendi: Notice under Section 143(2) is a mandatory prerequisite for assessing total income under Section 143(3) read with Section 147. The deeming provision of Section 292BB applies only to the validity of service, not to the non-existence of the notice. Mandatory statutory requirements cannot be bypassed by the assessee's participation or by the issuance of a non-substitutable notice under Section 142(1).
Result: Appeals dismissed.
Legal Category Hierarchy
Advocates appeared:
For the Appellant : Ms. Madhulika Upadhyay- 4185, AOR, Mr. N. Venkataraman, A.S.G. (N/P), Ms. Nisha Bagchi, Sr. Adv., Mr. Sudarshan Lamba, AOR, Mr. Venkataraman Chandrashekhara Bharathi, Adv., Mr. Raj Bahadur Yadav- 2771, AOR
For the Respondent: Mr. Ashok Panigrahi, Sr. Adv., Mr. Shubhranshu Padhi, AOR, Mr. Subhas Chandra Das, Adv., Mr. Jay Nirupam, Adv., Mr. D. Girish Kumar, Adv., Mr. Pranav Giri, Adv., Mr. Ritik Sharma, Adv., Mr. Raj Kumar Mehta- 562, AOR, Ms. Himanshi Andley, Adv.
For the Appellant : Ms. Madhulika Upadhyay- 4185, AOR, Mr. N. Venkataraman, A.S.G. (N/P), Ms. Nisha Bagchi, Sr. Adv., Mr. Sudarshan Lamba, AOR, Mr. Venkataraman Chandrashekhara Bharathi, Adv., Mr. Raj Bahadur Yadav- 2771, AOR
For the Respondent: Mr. Ashok Panigrahi, Sr. Adv., Mr. Shubhranshu Padhi, AOR, Mr. Subhas Chandra Das, Adv., Mr. Jay Nirupam, Adv., Mr. D. Girish Kumar, Adv., Mr. Pranav Giri, Adv., Mr. Ritik Sharma, Adv., Mr. Raj Kumar Mehta- 562, AOR, Ms. Himanshi Andley, Adv.
Table of Contents
2. Revenue contested that Section 292BB curtails the requirement for Section 143(2) notice due to assessee participation during reassessment, whereas assessees argued such notice is a mandatory jurisdictional prerequisite. (Para 3 , 7 , 14 )
3. The court observed that Section 292BB cannot cure the complete absence of a mandatory notice under Section 143(2) and does not validate reassessment proceedings commenced without such service. (Para 15 , 16 , 17 , 21 )
4. Service of a notice under Section 143(2) of the Act is mandatory and a jurisdictional prerequisite for reassessment; its absence vitiates proceedings and is not a curable irregularity. (Para 12 , 13 , 17 , 20 )
5. The appeals are dismissed, affirming the invalidation of reassessment orders due to non-issuance of the mandatory notice under Section 143(2). (Para 23 , 24 )
6. Can an assessee object to the non-service of a notice under Section 143(2) if they participated in the reassessment proceedings?
Yes. Section 292BB only deems notices to be duly served if a notice existed but had infirmities; it does not cure the total absence of a mandatory notice under Section 143(2). The assessee is not precluded from challenging the lack of jurisdiction caused by non-issuance. (Para 15 , 16 , 21 )
7. Does requesting that an earlier return filed under Section 139 be treated as the return filed for reassessment waive the requirement for a Section 143(2) notice?
No. The Revenue's obligation to issue a notice under Section 143(2) to seek evidence in support of the filed return remains mandatory and independent of the assessee's choice to rely on an earlier return. (Para 18 )
8. Does a letter issued by the Assessing Officer under Section 142(1) during reassessment satisfy the requirement for a notice under Section 143(2)?
No. A Section 143(2) notice is a mandatory precursor to reassessment proceedings. A subsequent letter issued under Section 142(1) cannot cure the initial jurisdictional failure resulting from the lack of a notice under Section 143(2). (Para 22 )
JUDGMENT :
SANJEEV SACHDEVA, J.
1. Leave granted.
2. As similar issues arise in all these appeals, and as such they have been taken up for consideration together. Revenue has assailed different orders holding against the Revenue. Insofar as the respondent, Orissa Mining Corporation Ltd. is concerned, the assessment years involved are 2008-09, 2010-11 and 2011-12. Whereas in the case of respondent, Bijoy Kishore Mohanty, the assessment years involved are in the 2009-10 and 2010-11.
3. Common questions of law arising for consideration in all these appeals are:
- (i) Whether Section 292BB of the Income Tax Act, 19611[‘The Act’ for short] precludes an Assessee from raising an objection in any proceedings under the Act regarding non-service of a notice under Section 143(2) of the Act, if the Assessee had appeared and cooperated during the reassessment proceedings and had not raised any objection with regard to non-issuance of a notice under Section 143(2) of the Act? and
(ii) Whether an Assessee who requests that the earlier Return of Income filed under Section 139 of the Act be treated as the Return of Income filed in response to a notice under Section 148 of the Act is not required to be given a notice under Section 143(2) of the Act?, and
(iii) Whether a letter given by the Assessing Officer during the course of reassessment proceedings, requiring the Assessee to explain the grounds on which re-assessment of income was proposed, would tantamount to sufficient compliance of the provision of Section 143(2) of the Act?
4. In all these appeals, the Assessees had filed the respective Returns of their Income for the respective Assessment years under Section 139 of the Act, which were duly assessed, and assessment orders passed under Section 143(3) of the Act. Subsequently, the Revenue sought to reopen the assessments under Section 147 of the Act and issued notices under Section 148 of the Act, requiring the assesses to file the returns in the prescribed form.
5. In the case of Orissa Mining Corporation Ltd., the Assessee filed a response stating that its Return of Income originally filed under Section 139 of the Act, be treated as the Return of Income in response to a notice under Section 148 of the Act. In the case of Bijoy Kishore Mohanty, it is stated that the same Return of Income which had earlier been filed under Section 139 of the Act, was refiled in response to the notice issued under Section 148 of the Act.
6. Thereafter, admittedly no notice under section 143(2) of the Act was issued and the reassessment proceedings were commenced. During the reassessment proceedings, and notices under Section 142(1) of the Act were issued to the Assessee, seeking documents/stock information to be submitted.
7. Pursuant thereto, the reassessment orders were framed against the Assessees, which were challenged by the Assessees by approaching the Appellate Authority, i.e., Commissioner of Income Tax (Appeals). One of the grounds raised by the Assessee before the Appellate Authority was with regard to failure of the Revenue to issue a notice under Section 143(2) of the Act, thereby vitiating the entire proceedings.
8. Appellate Authority rejected the argument of the Assessee with regards to vitiation of the proceedings on account of failure of the Revenue to serve a notice under Section 143(2) of the Act. Appellate Authority held that since the Assessees had participated in the assessment proceedings after the issuance of a notice under Section 148, followed by a notice under Section 142(1), the Assessees could not be allowed to raise the ground of non-issuance of a notice under Section 143(2) of the Act at the appellate stage.
9. Aggrieved therefrom, the Assesses approached the Income Tax Appellate Tribunal. In the respective cases, the Appellate Tribunal held that the assessment proceedings stood vitiated for want of notice under Section 143(2) of the Act and, thus, set aside the reassessment orders.
10. Aggrieved by the decisions of the Income Tax Appellate
