No fresh s.143(2) notice required in s.263 revisionary assessments as continuation of original proceedings with prior notice.

ORDER

PER PRASHANT MAHARISHI, VICE – PRESIDENT

i. This appeal has been filed by the Deputy Commissioner of Income Tax, Circle 3(1)(9), Bangalore (the learned Assessing Officer) in the matter of G Corp Private Limited (the Assessee) for Assessment Year 2014–15. The appeal challenges the appellate order issued by The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (the learned CIT(A)), dated 14 February 2025, whereby the assessee’s appeal against the assessment order dated 29 December 2019, passed under section 143(3) read with section 263 of The Income Tax Act, 1961, was allowed. The CIT(A) held that no notice under section 143(2) was issued by the learned Assessing Officer when passing the assessment order under section 143(3) read with section 263, pursuant to the revisionary order under section 263 of the Act, which is considered mandatory. This decision was based on the judgment of the Honourable Supreme Court of India in Hotel Blue Moon (TS-113-SC- 2010-O), resulting in the quashing of the assessment order.

ii. The learned assessing officer has raised following grounds of appeal:–

1. The learned CIT(A) has erred in holding that the assessment order passed under section 143(3) read with section 263 of the Income Tax Act, 1961, is invalid merely on the ground that a notice under section 143(2) was not issued after the set-aside proceedings, without appreciating that the original assessment had already been preceded by a valid notice under section 143(2).

2. The Learned CIT(A) has erred in relying upon the decision of the Hon'ble Supreme Court in the case of ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC), which is not applicable to the facts of the present case. The said decision pertains to block assessments under Chapter XIV-B and not to reassessment or set-aside proceedings u/s 263.

3. The learned CIT(A) has failed to appreciate that in the case of set- aside assessments u/s 263, there is no requirement for issuance of a fresh notice u/s 143(2), since the proceedings are in continuation of the original assessment and no fresh return of income is filed.

4. The learned CIT(A) has erred in allowing the appeal of the assessee without adjudicating on merits of the additions made by the Assessing Officer, solely on the procedural ground, thereby rendering the order contrary to law and facts.

5. The appellant craves leave to add, alter, attend or withdraw any of the grounds at the hearing.

iii. The learned CIT – A has erred in holding that the assessment order passed under section 143 (3) read with section of the income tax act, 1961, is invalid merely on the ground that a notice under section 143 (2) was not issued after the set-aside proceedings without appreciating that the original assessment had already been preceded by a valid notice under section 143 (2).

iv. The learned CIT – A has erred in relying upon the decision of the Honourable Supreme Court in the case of ACIT versus Hotel blue moon (2010) 321 ITR 362 (SC), which is not applicable to the facts of the present case. The said decision pertains to the block assessment under chapter XIV B and not to reassessment order set-aside proceedings under section 263.

v. The learned CIT – A has failed to appreciate that in case of set aside assessment under section 263 there is no requirement for issuance of a fresh notice under section 143 (2), since the proceedings are in continuation of the original assessment and no fresh return of income is filed.

vi. The learned CIT – A has erred in allowing the appeal of the assessee without adjudicating on merits of the addition made by the assessing officer, solely on the procedural ground, thereby rendering the order contrary to the law and facts.

vii. Brief facts of the case shows that assessee company is in the business of Property Management. The original assessment under section 143 (3) was completed on 6 December 2016 determining the total income at ₹ 2,088,894/–.

viii. The Principal Commissioner of Income Tax – 3,