Sunil Yadav vs DCIT

PER MADHUMITA ROYA, JM:

The instant appeal filed by the assessee is directed against the order dated 15.10.2025 of the ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the assessment order dated 31.03.2022 passed by the National Faceless Assessment Centre, Delhi (hereinafter referred to as ‘the ld. AO’) under Section 147 r.w.s. 144 of the Act for Assessment Year 2013-14.

The assessee has made an application for admission of additional grounds of appeal under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 on the premise that as notice under Section 143(2) of the Act was issued during the course of reassessment proceedings under Section 147 of the Act, the entire proceedings is vitiated being void ab initio and, therefore, is liable to be quashed. Since the additional ground goes to the root of the matter, particularly, the jurisdiction of the AO since challenged, we find it to address the same at the very threshold.

The facts leading to this appeal are that the assessee’s case was selected for reassessment under Section 147 of the Act after obtaining approval under Section 151 of the Act from the concerned authority and upon recording reasons by the jurisdictional AO, the case was reopened. The notice under Section 148 of the Act dated 30.03.2021 was issued to the assessee requiring the assessee to file the return of income within 30 days as it was found that the assessee did not file the return in response to the notice issued under Section 148 of the Act. Notice under Section 142(1) of the Act dated 24.11.2021 was issued to the assessee along with the questionnaire further directing the assessee to file the return of income. However, the assessee filed the ITR on 10.03.2022 in response to the said notice. As the return of income was filed by the assessee only on 10.03.2022, i.e., beyond 30 days from the issuance of the notice under Section 148 dated 30.03.2021, the Ld. AO did not find it necessary to issue notice under Section 143(2) of the Act as it is recorded by the Ld. AO at page 3 of the assessment order dated 31.03.2022.

The Ld. Counsel appearing for the assessee joins the issue here to this effect that where the assessee filed the return pursuant to notice issued under Section 148 of the Act, notice under Section 143(3) of the Act was mandatory for framing the assessment notwithstanding that the assessee might not have filed a return in first place under Section 139 of the Act. In this regard, he has relied upon very many judgements including the decision of the Coordinate bench in the case of Anil Agarwal, HUF vs. ITO, in ITA No.2594/Del/2024; the judgement passed the Hon’ble jurisdictional High Court in the case of PCIT vs. Staunch Marketing (P) Ltd., reported in (2017) 81 taxmann.com 482 (Delhi) and further the judgement passed by the Hon’ble Allahabad High Court in the case of PCIT & Anr. Vs. Ashish Gupta in ITA No.2 of 2026.

On the other hand, the Ld. DR relied upon the orders passed by the authorities below; the order passed by the Ld. AO was confirmed by the First Appellate Authority.

We have heard the parties and perused the relevant material on record. In the case of PCIT & Anr. Vs. Ashish Gupta (supra), the Hon’ble Allahabad High Court did not interfere with the order passed by the Hon’ble Bench which has quashed the reassessment proceedings on the ground that the notice under Section 143(2) of the Act was not issued against the assessee; the order passed by the Ld.CIT(A) quashing the reassessment proceedings has been confirmed. In the order passed by the Coordinate Bench in the case of Anil Agarwal HUF (supra), it was held that even in an ex parte assessment when once return is filed in response to notice under Section 148 of the Act issuance of notice under Section 143(2) of the Act is mandatory even if the assessee failed to furnish the returned under Section 139 of the Act. In fact, this particular judgement took into consideration the ratio laid down by the Hon’ble Delhi High Court in the case of Staunch Marketing (P) Ltd. (supra) wherein, under identical facts and circumstances, it was held that where the assessee filed a return pursuant to notice issued under Section 148 of the Act, notice under Section 143(2) of the Act was mandatory prior to framing an assessment notwithstanding that the assessee might not have filed a return in first place under section 139 of the Act and finally, declared the assessment proceedings void ab initio in favour of the assessee.

Having regard to the entire aspects of the matter, particularly, considering the order passed by the different judicial forums on the identical issue, we find that merely on the ground that the assessee has not filed the return of income within 30 days from the date of issuance of the notice under Sectio 148 of the Act dated 30.03.2021 finalising the assessment order without issuance of mandatory notice under Section 143(2) of the Act which is found to be not required under the facts and circumstances of the case by the Ld. AO further confirmed by the First Appellate Authority is found to be whimsical, erroneous, bad in law and, therefore, not sustainable. Thus, the same is hereby quashed.

In the result, the appeal filed by the assessee is allowed.