Reassessment Completed Without Mandatory Section 143(2) Scrutiny Notice After Filing Return Is Legally Invalid

By | September 30, 2026
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Reassessment Completed Without Mandatory Section 143(2) Scrutiny Notice After Filing Return Is Legally Invalid

Issue

Whether a reassessment completed ex-parte under Section 147 read with Sections 144 and 144B is legally sustainable when the Assessing Officer fails to issue a mandatory scrutiny notice under Section 143(2) after the assessee files a return in response to a Section 148 notice.

Facts

  • Reopening & Notice: For AY 2014-15, the assessee-individual received a notice under Section 148, followed by a notice under Section 142(1) directing the submission of accounts and documents by 01.09.2021.
  • Return Filed: The assessee duly filed her return of income on 28.08.2021 in response to the Section 148 notice.
  • Erroneous Communication: On 04.02.2022, the Department issued another communication under Section 142(1), incorrectly alleging that no return had been submitted in response to the Section 148 notice, directing her to file a return again under threat of ex-parte assessment.
  • Ex-Parte Order & Dismissal: The Assessing Officer completed the reassessment ex-parte under Section 147 read with Sections 144 and 144B and issued a demand notice under Section 156. The First Appellate Authority disposed of the appeal under Section 250 ex-parte.
  • Writ Challenge: The assessee filed a writ petition before the High Court arguing that once a return is submitted following a Section 142 notice, Section 143(2) gets attracted, and the total failure to issue a Section 143(2) scrutiny notice invalidates the reassessment order.

Decision

  • Reassessment Order Set Aside: Held that, following the identical precedent in Vandana Kumari v. Pr. CIT [CWJC No. 2317 of 2025, dated 06-08-2025], the failure to issue a mandatory Section 143(2) scrutiny notice invalidates the proceedings.
  • Demand Notice Quashed: Held that both the impugned reassessment order and the consequential demand notice issued under Section 156 are legally unsustainable and are accordingly set aside [Paras 13 and 15].

Key Takeaways

  • Mandatory Nature of Section 143(2): Issuance and service of a scrutiny notice under Section 143(2) is a mandatory jurisdictional precondition before framing a reassessment order once a return is filed in response to Section 148.
  • Incurable Jurisdictional Defect: Complete omission to issue a Section 143(2) notice cannot be treated as a mere procedural lapse or cured under Section 292BB; it strikes at the root of the Assessing Officer’s jurisdiction.
  • Factual Records Override Departmental Notices: Erroneous departmental communications alleging non-filing of returns cannot override official proof that a return was filed within time.
HIGH COURT OF PATNA
Vandana Kumari
v.
Principal Commissioner of Income-tax
Rajeev Ranjan Prasad and Sunil Dutta Mishra, JJ.
Civil Writ Jurisdiction Case No. 2330 of 2025
SEPTEMBER  11, 2026
Aman Raja, Ajay Kumar Jha, Sanjeev Kumar and Ms. Shyamli Choudhary, Advs. for the Petitioner. Mrs. Archana Sinha, Sr. Adv., Alok Shahi, Mrs. Shilpi Keshri and Ms. Swarma Roy, Advs. for the Respondent.
ORDER
Rajeev Ranjan Prasad, J. – Heard learned counsel for the petitioner and learned senior Standing Counsel for the Department.
2. This writ application has been preferred seeking the following reliefs:
a. For issuance of appropriate writ/ direction(s) to prevent the respondents from exceeding its jurisdiction and/or acting contrary to the rule of natural justice, where the defect of jurisdiction is apparent on the face of the proceedings and/or there is an abuse of power.
b. For issuance of writ of Certiorari or any other appropriate writ(s), order(s) or direction(s) quashing the notice issued by the Respondent No. 2 under the section 148 of the Act dated 28/03/2021 as the sanction required to be accorded before the issuance of the notice under section 151 of the Act is conspicuously absent.
c. For issuing the appropriate order, direction or writ in the nature of Certiorari for quashing the Order of Assessment and consequential notice of demand under the section 156 of the Act as the completion of the proceedings under section 147 read with section 144 read with section 144B of the Act in the absence of the mandatory statutory notice under section 143(2) of the Act is illegal and beyond the jurisdiction of Respondent No. 3.
d. For issuing the appropriate order, direction or writ in the nature of Certiorari for quashing the Order of Assessment and consequential notice of demand under the section 156 of the Act as the passing of the order under 144 instead of 143(3) of the Act is bad in law in as much as the impugned order is beyond the purview of the conditions stipulated under section 144 of the Act.
e. For issuing the appropriate order, direction or writ in the nature of Certiorari for quashing the Order of Appeal under section 250 of the Act as the same has been passed ex-parte against the Petitioner without considering the fact the order of assessment passed in itself is beyond the jurisdiction of the Respondent No. 2 and Respondent No. 3.
f. For issuance of other writ/ direction(s) while the petitioner may in the fact and circumstances of the case to be found entitled to.
g. For grant such other relief(s) as deem fit and proper by issuing an appropriate writ(s), rule(s) or direction(s) as deem fit and proper.
3. The facts are not much in dispute. The petitioner filed Income Tax Return for the Assessment Year 2014-15 under Section 139(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act of 1961). She received a notice dated 28.03.2021 issued under Section 148 of the Act of 1961 calling upon her to furnish her returns within a period of 30 days. A copy of notice under Section 148 is Annexure- ‘P/1’ to the writ application.
4. The petitioner did not furnish her return within 30 days’ period. In the meantime, the petitioner was served with a notice under sub-section (1) of Section 142 of the Act of 1961 which is Annexure- ‘P/2’ to the writ application. By this notice, she was called upon to furnish the accounts and documents as specified overleaf. The petitioner was given an opportunity to furnish and verify the prescribed manner under Rule 14 of the Income Tax Rules 1962 the information called for as per annexure and on the points or matters specified therein on or before 01.09.2021 at 11:00 AM. The annexures attached to the notice under Section 142 (1) would show the kind of documents asked for by the Department.
5. It is an admitted position that the petitioner filed her return for the Assessment Year 2014-15 pursuant to Annexure ‘P/1’ on 28.08.2021. This is the bone of contention between the petitioner and the Department.
6. Learned Senior Standing Counsel for the Department has taken a plea that because the return under Section 148 of the Act of 1961 was not filed within the prescribed period of 30 days, as contained in Annexure ‘P/1’, it would be non-est and the return filed on 28.08.2021 by the petitioner would not be a return within the meaning of Section 148 of the Act of 1961.
7. On the other hand, learned counsel for the petitioner submits that during the relevant Assessment Year 2014-15, there was no embargo on filing of the return. The amendment brought in the year 2023 in this regard would not govern this case. During the relevant assessment year, an assessee could have submitted his/her return till the end of the relevant assessment year or within the period prescribed for completion of the assessment i.e. one year after the end of the financial year in which the notice under Section 148 of the Act of 1961 was issued.
8. Having understood the same, learned Senior Standing Counsel for the Department does not contest this submission.
9. Learned counsel for the petitioner has further placed before this Court a copy of the order dated 02.08.2023 passed by a learned Co-ordinate Bench of this Court presided over by the then Hon’ble the Chief Justice in CIT v. Nagendra Prasad  (Patna)/ Miscellaneous Appeal No. 662 of 2014 (The . The attention of this Court has been drawn towards paragraphs ‘ 5′ & ‘6’ of the order of the Hon’ble Division Bench of this Court which we reproduce hereunder for a ready reference:-
“5. Admittedly, the notice was issued by the Assessing Officer under Section 148 of the Act on 14.07.2008 requiring the assessee to file a return within thirty days. A return was filed much later on 31.03.2009, after eight and a half months.
6. On identical facts, in M.A. No.239 of 2011 titled as Chand Bihari Agrawal v. Commissioner Of Income Tax, Central, Patna decided on 25.07.2023, this Court considered the issue and held against the revenue.”
10. This Court has also noticed Annexure ‘P/4’ which is a copy of the communication under sub-section (1) of Section 142 of the Act of 1961. It is dated 04.02.2022. The annexure to this notice is required to be gone into in order to understand how the Revenue Department has proceeded in this matter to make the assessment. The Annexure to Annexure ‘P/4’ reads as under:-
“In connection with the re-assessment proceedings for assessment year 2014-15, you were requested to furnish the return of income in response to notice u/s. 148 dated 28/03/2021. However, it is seen from the records that you have not filed return of income in response to notice u/s. 148 of the I.T. Act. In this regard, a notice u/s.142(1) dated 17/08/2021 was issued requesting you once again to file a return of income in response to notice u/s. 148. There is no response from you to this notice also.
Hence, you are once again requested to file a return in response to notice u/s.148 of the Act, dated 28.03.2021. Please note that failure to furnish the return of income by the date, the assessment will be completed ex-parte based on the materials available on record.”
11. Once learned Senior Standing Counsel for the Department has noticed the contents of the annexure to Annexure ‘P/4’, she is unable to contest the matter.
12. We, having gone through the annexure to Annexure ‘P/4’, understand that the authority, who issued this Annexure ‘P/4’, had not taken care to look into the return filed by the petitioner, otherwise this kind of notice with annexure could not have been issued.
13. Learned counsel for the petitioner has, therefore, argued before this Court that once a notice under sub-section (1) of Section 142 of the Act of 1961 was issued and pursuant to same, the petitioner had submitted her return and the documents required, the sub-section (2) of Section 143 would get attracted. Learned counsel has relied upon a decision of this Court in the case of Vandana Kumari v. Pr. CIT [CWJC No. 2317 of 2025, dated 6-8-2025] in which this Court has considered an identical matter of the Assessment Year 2013-14. Paragraphs ‘8’, ‘9’ & ’10’ of the judgment in the case of Vandana Kumari @ Bandana Kumari (supra) are being reproduced hereunder for a ready reference:
“8. Today, when the writ application has been taken up for consideration, learned Senior Standing Counsel for the Department has placed before us the proviso to subsection 2 of Section 143 which was existing in the statute book during the relevant year. We reproduce sub-section (2) of Section 143 with proviso herein for a ready reference:-

“(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.”

9. Learned Senior Standing Counsel has fairly submitted before this Court that in this case, the proviso to subsection (2) of Section 143 would not be applicable. The petitioner had already submitted her return on 28.08.2021 i.e. within five months from the date of issuance of notice under Section 148 (Annexure ‘P/1’ to the writ application), in such circumstance, a notice under sub-section (2) of Section 143 of the Act of 1961 was mandatory. It is submitted that admittedly in this case, no notice under subsection (2) of Section 143 of the Act of 1961 has ever been issued much less served upon the petitioner.
10. In its order dated 30.07.2025, this Court has taken note of the judicial pronouncements on the subject. The stand taken today on behalf of the Department would lead to conclude that the ratio of the judgment of the Hon’ble Supreme Court in the case of Assistant Commissioner of Income-Tax v. Hotel Blue Moon reported in (2010) 321 ITR 362 (SC) would be fully applicable in this case.”
14. Learned Senior Standing Counsel for the Department has, though, tried her level best at the initial stage to contest the writ application, but at the end, she had to give up her contest on the face of the Annexure to the notice (Annexure ‘P/4’).
15. This Court, therefore, sets aside the impugned orders in terms of prayer in paragraph no. 1 of the writ application.
16. This Writ Application stands allowed.