A Time-barred Notice cannot be deemed as valid u/s 292BB since it is a Jurisdictional Error: ITAT [Read Order]

The Hyderabad bench of Income Tax Appellate Tribunal (ITAT) has held that a notice issued after the period of limitation cannot be deemed to be valid by invoking section 292BB of the Income Tax Act, 1961 since there is a jurisdictional error.

In instant case the assessee, an individual filed his return of income declared as5,06,600/-  but the AO determined his income  at Rs. 89,81,600/ by making various additions.

The assessee contented that the AO has computed a wrong figure of investment amount and also made mistake in gift consideration. And also raised some additional ground of appeals. The assessment for previous year was completed u/s 143(3) r.w.s. 153A of the Income Tax Act, 1961. The AO had issued combined notices U/s 142(1) & 143(2) for making various additions in the lower income showed by the assessee.

The assessee also raised another legal ground of appeal  that the notice u/ s 143(2) issued is barred by limitation under proviso to Sec 143(2)(ii) of the Income Tax act ,according to which no notice shall be served u/ s 143(2) six months after the end of the previous year in which returns is filed. The notice was issued beyond the statutory period of six months.

The bench consists of Judicial Member P.Madavi Devi and Accountant Member S.Rifaul Rahman has observed that the AO has issued 153A notices and also issued 143(2) notices during the assessment year. To complete the assessment u/s143(3), the AO has to issue notice u/s 143(2) to get the jurisdiction to complete the assessment u/s 143(3). As per the provisions of the said section the AO has to issue the notice within six months from the end of the financial year in which the return is furnished. But the notice was issued by the AO was beyond the said period.

Hence the bench relied up on the decision of the Delhi High Court wherein it was held that a “reassessment order cannot be passed without compliance with the mandatory requirement of notice u/s 143(2) being issued as the requirement of issuance of such notice is a jurisdictional one and section 292BB cannot cure jurisdictional error”.