Facts

A search and seizure operation was conducted at premises of the Assessee who  was carrying on brokerage business. He submitted his return and assessment was completed under section 143(3) making addition on account of unexplained cash.

On Appeal, the CIT(A) deleted the addition.

The Department filed an appeal to the Tribunal. The Assessee filed cross objections challenging the jurisdiction of the AO on the ground that notice under section 143(2) had not been issued.

The Tribunal allowed the cross objection filed by the Assessee. This view was upheld by the High Court.

Issue

Whether section 292BB seeks to  cure infirmities in  the manner of  service  of notices or whether the non-issuance of the notice can be cured by the participation of the Assessee in the proceedings?

Views

The provision only cures the infirmities in the manner of service of notice and  does not intended to cure complete absence of notice itself. The deeming fiction does not operate to save complete absence of notice.

Held

The failure to issue a notice under section 143(2) renders the assessment order  void even if the Assessee has participated in the proceedings. Section 292BB does not save complete absence of notice. For section 292BB to apply, the notice must have emanated fromthe department. (CA Nos. 6261-6262 of 2019 dt. 13-8-2019)

Editorial: CIT v. Laxman Das Khandelwal (2019) 108 taxmann.com 182 (MP) (HC) is affirmed. ACIT v. Hotel BlueMoon (2010) 321 ITR 362 (SC) is referred.

“You can chain me, you can torture me, you  can even destroy this body, but you will never imprison my mind.”

– Mahatma Gandhi