Section 292BB Income Tax Act Does Not Save Complete Absence Of Notice, Holds Supreme Court [Read Judgment]
"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 Supreme Court has observed that Section 292BB of the Income Tax Act applies only to cure the infirmities in the manner of service of notice of assessment/reassessment, but not intended to cure complete absence of notice itself.
In this case [Commissioner Of Income Tax vs. Laxman Das Khandelwal], the High Court had held that since the issue of notice u/s 143(2) of the Income Tax for completion of regular assessment in the case of the assessee was a statutory requirement as per the provisions of the Act and non issuance thereof is not a curable defect.
Before the Apex Court, the IT Department represented by Senior Advocate Mahabir Singh, relying on Section 292BB, contended that, since the assessee had participated in the proceedings, the provisions of Section 292BB would apply. Section 292BB provides 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 (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. Advocate Ankit Vijaywargia, on the other hand, urged that since the issuance of notice under Section 143(2) of the Act being prerequisite, in the absence of such notice, the entire proceedings would be invalid.
Disagreeing with the contention based on Section 292BB of the Act, the bench comprising Justice Uday Umesh Lalit and Justice Vineet Saran said:
According to Section 292BB of the Act, if 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.
The bench upheld the High Court order observing that no notice under Section 143(2) of the Act was ever issued by the Department to the assessee.