S. 292BB of Income Tax Act deals with failure of service of notice or failure to issue notice? Del HC explains

Delhi High Court: The Division Bench of Manmohan and Dinesh Kumar Sharma, JJ., addressed a matter wherein the decision of Income Tax Appellate Tribunal for the Assessment Year 2011-12 was challenged.

Appellant’s Counsel stated that the respondent-assessee had appeared and cooperated in the assessment proceedings and had not raised any objection about non-service of notice under Section 143(2) of the Income Tax Act, 1961 during the entire assessment proceedings and therefore, the assessee was precluded from taking any objection that the notice was not issued in time in accordance with Section 292BB of the Act.

Further, the appellant stated that the Tribunal had erred in ignoring Section 124(3) of the Act which mandated that issue regarding jurisdiction of Assessing Officer cannot be challenged after one month from the issuance of notice under Section 143(2) of the Act or after completion of assessment proceedings, whichever is earlier.

Supreme Court’s decision in Commr. Of Income Tax v. Laxman Das Khandelwal, [2019] 417 ITR 325 (SC) interpreted Section 292BB of the Income Tax Act.

High Court stated that it was in agreement with the Tribunal that Section 292BB does not give the power to condone the failure or delay in issuing the statutory notice required to be issued under Section 143(2) of the Act. Section 292BB deals with the failure of service of notice and not with regard to the failure to issue notice.

In the above-cited Supreme Court decision, it was clearly stated that the scope of Section 292BB is to make service of notice having certain infirmities to be proper and valid. However, the Section does not save the complete absence of notice. For Section 292BB to apply, the notice must have emanated from the Department. It is only the infirmities in the manner of service of notice that the Section seeks to cure.

Therefore, since the notice under Section 143(2) of the Act was not issued within the period of six months prescribed for the purpose, jurisdiction assumed by the Assessing Officer under Section 143(3) of the Act was assumed erroneously.

Settled Law

The issue of jurisdiction goes to the roots of the cause and such an issue can be raised at any belated stage of the proceedings including appeal.

In Court’s opinion, no substantial question of law arose for consideration in the present appeal, hence it was dismissed. [PR. Commissioner of Income Tax v. Consortium Nussli Comfort Net, 2022 SCC OnLine Del 895, decided on 25-3-2022]


Advocates before the Court:

For the Appellant:

Mr Sanjay Kumar, Advocate with Ms Easha Kadian, Advocate

For the Respondent:

Dr. Rakesh Gupta, Advocate with Mr Somil Agarwal and Mr Anshul Mittal, Advocates.

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