LexCOMMISSIONER OF INCOME TAX versus LAXMAN DAS KHANDELWAL
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A B C D E F G H 24 SUPREME COURT REPORTS [2019] 10 S.C.R. COMMISSIONER OF INCOME TAX v. LAXMAN DAS KHANDELWAL (Civil Appeal Nos. 6261-62 of 2019) AUGUST 13, 2019 [UDAY UMESH LALIT AND VINEET SARAN, JJ.] Income Tax Act, 1961: s. 143(2) – Absence of notice u/s. 143(2) – However, assessee participated in the assessment proceedings – Effect of, on re-assessment proceedings – Impact of s. 292 BB – Held: Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was not served upon him; or not served upon him in time; or served upon him in an improper manner – Scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee – However, the Section does not save complete absence of notice – For s. 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 – On facts, since no notice u/s. 143(2) was ever issued by the Department, the High Court and the tribunal rightly quashed the reassessment proceedings since the same stood vitiated as the Assessment Officer lacked jurisdiction in the absence of notice u/s. 143(2) of the Act. Dismissing the appeals, the Court HELD: A closer look at Section 292BB of the Income Tax Act, 1961 shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was not served upon him; or not served upon him in time; or served upon him in an improper manner. According to Section 292BB, if [2019] 10 S.C.R. 24 24 A B C D E F G H 25 the assessee had participated in the proceedings, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite participation on part of the assessee. It is, however, to be noted that the Section does not save 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. The Section is not intended to cure complete absence of notice itself. Since the facts on record are clear that no notice under Section 143(2) of the Act was ever issued by the Department, the findings rendered by the High Court and the Tribunal and the conclusion arrived at that the reassessment proceedings are quashed since the same stood vitiated as the Assessment Officer lacked jurisdiction in the absence of notice u/s.143(2) of the Act, were correct. [Para 7, 9, 10, 3] [29-F; 30-C-E] ACIT v. Hotel Blue Moon (2010) 321 ITR 362 ; Assistant Commissioner of Income Tax and Another v. Hotel Blue Moon (2010) 3 SCC 259 : [2010] 2 SCR 282 - referred to. Case Law Reference (2010) 321 ITR 362 referred to Para 3 [2010] 2 SCR 282 referred to Para 4 CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6261- 6262 of 2019. From the final Judgment and Order dated 27.04.2018 and 14.09.2018 of the High Court of Madhya Pradesh at Gwalior in ITA No.97 of 2018 and RP No.1289 of 2018 respectively. Mahabir Singh, Sr. Adv., S.A. Haseeb, Ms. Swati Gildyal, Vikas Bansal, Mrs. Anil Katiyar, Advs. for the Appellant. Ankit Vijaywargiya, Aditya Verma, Shrey Patnaik, Advs. for the Respondent. COMMISSIONER OF INCOME TAX v. LAXMAN DAS KHANDELWAL A B C D E F G H 26 SUPREME COURT REPORTS [2019] 10 S.C.R. The Judgment of the Court was delivered by UDAY UMESH LALIT, J. 1. Delay condoned. Leave granted. 2. These Appeals are directed against the judgment and final order dated 27.04.2018 passed by the High Court1 in Income Tax Appeal No.97 of 2018 and against the order dated 14.09.2018 in Review Petition No.1289 of 2018 arising from said Income Tax Appeal No.97 of 2018. 3. The relevant facts leading to the filing of aforementioned Income Tax Appeal No.97 of 2018 before the High Court, as culled out from the judgment and order dated 27.04.2018 presently under appeal are as under:- “The assessee is an individual carrying a business of brokerage. Search and seizure operation was conducted u
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