Failure to issue notice u/s 143(2) after valid return (filed within COVID extensions) in reassessment proceedings renders assessment invalid and a nullity, as it is a mandatory jurisdictional requirement.

ORDER

Per Rajesh Kumar, AM

The present appeal filed by the assessee arises from order dated 16.09.2025passed u/s 250 of the Income Tax Act, 1961 (hereafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter referred to as “the Ld.CIT(A)].

2. At the time of hearing, the only issue raised by the assessee during the course of hearing is against the order of Ld.CIT(A) upholding the assessment order which has been passed without issuing notice u/s 143(2) of the Act by wrongly observing that the assessee has not filed the return of income in response to notice u/s 148 of the Act within 30 days from the date of service of notice u/s 148 of the Act upon the assessee.

3. The facts in brief are that the assessee filed return of income on 30.09.2013 disclosing total loss of Rs. 2,13,114/-. Later on, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 20.03.2020 after the AO received information from the office of ADIT (Inv.) Unit-5, Kolkata that the assessee company was a beneficiary of Rs. 3,41,00,000/- from 4 Private Limited Companies which was nothing but only accommodation entries. The AO called upon the assessee to furnish the return of income within 30 days but the furnished the return of income in compliance 23.03.2021which was not within the time allowed in the notice of 30 days. However, the same was filed within the extended time as per The Taxation and Other Laws (Relaxation of Certain Provision) Ordnance, 2020. The notice u/s 143(2) of the Act was not issued by the AO and the assessment was framed u/s 147 r.w.s. 144 vide order dated 30.09.2021 by making addition of Rs. 4,80,50,000/- on account of unexplained money and Rs. 69,968/- u/s 14A read with Rule 8D of the IT Rules.

4. In the appellate proceedings, the assessee challenged the validity of the assessment framed by the AO sans issuing notice u/s 143(2) of the Act. However, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee has not filed the return of income in response to notice u/s 148 of the Act within the stipulated period of 30 days allowed in the notice. The Ld. CIT(A) noted that the notice u/s 148 of the Act was issued on 28.03.2020 whereas the assessee has filed the return of income on 23.03.2021 which is admittedly beyond 30 days and therefore, there is no requirement of issuing notice u/s 143(2) as the said return was invalid. There is requirement of issuing notice u/s 143(2) of the Act only with regard to the valid return of income. Thus the Ld. CIT(A) dismissed the appeal of the assessee.

5. After hearing the rival contention and perusing the material available on record, we find that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s u/s 148 of the Act on 28.03.2020. We note that the Covid-19 Pandemic has already set in and the Govt. of India extended due date by bringing out ordnance namely The Taxation and Other Laws (Relaxation of Certain Provision) Ordnance, 2020 dated 31.03.2020 extending the time limit which falls after 20.03.2020 to 29.06.2020 was extended up to 30.06.2020. Again the time limit was extended which falls during the period 20.03.2020 to 31.12.2020 was extended till 31.03.2021 by The Taxation and Other Laws (Relaxation and Amendment of Certain Provision) Act, 2020(TOLA) dated 29.09.2020. The assessee filed return of income was filed in response to notice issued u/s 148 of the Act which in our considered opinion is well within the time as extended by the TOLA. Therefore, notice u/s 143(2) has to be issued mandatorily by the AO but was not issued. Thus the failure of the AO to issue notice u/s 14