Validity of Notice: Section 143(2), Section 292BB and Curable Defects

Imagine a trader who files her return in good time and is later invited to a hearing. Questionnaires arrive, she replies, her accountant attends, and an assessment order follows with an addition she disputes. Only when the order is in her hands does her adviser notice that the one document which formally opens a scrutiny assessment, the notice under section 143(2) of the Income-tax Act, 1961, was either never issued, or was issued only after the period allowed by the statute had expired. The Revenue answers that she took part throughout and cannot now complain. She answers that a notice is not a courtesy but the source of the officer’s power. Which of them is right depends on a short and often misread provision, section 292BB, and on a distinction that the courts have drawn between a notice that is missing, a notice that is late, and a notice that was properly issued but imperfectly delivered.

Why The Section 143(2) Notice Matters

Under section 143(1) a return is processed without human scrutiny. If the Assessing Officer (AO, the tax official who examines a return) wants to go further and test the claims in it, section 143(2) requires that a notice be served on the assessee, so that she knows the return is under examination and can prepare to defend it. Only after that notice may the officer call for evidence under section 142 and make an assessment under section 143(3). The notice therefore performs two functions: it is the procedural trigger of scrutiny, and it is a fairness safeguard, because it tells the taxpayer what is coming.

Because the notice opens the door to the assessment, the courts have generally treated it as a condition of the officer’s jurisdiction rather than a mere formality. The Supreme Court said so in ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC), a case on block assessments under Chapter XIV-B (the special regime for search cases). The Court held that the omission to issue a notice under section 143(2) “cannot be a procedural irregularity”, that it is not curable, and that the requirement cannot be dispensed with (paras 15-16). It is important to be exact about what that case decided. It concerned a block period that pre-dated section 292BB, and the Court did not discuss that section. It is authority that a notice is indispensable; it is not authority on how far participation by the assessee can repair a defect in a notice that does exist.

Time Limit for Issuing a Section 143(2) Notice

The proviso to section 143(2) fixes an outer date by which the notice must be served, and that date has been tightened over the years. The position, as best it can be stated from the materials consulted, is set out below.

Two points of detail recur in litigation. First, the date from which the period is counted is the date on which the original return was furnished under section 139(1), not the later date on which a defect in the return was cured. The Delhi High Court so held in SMC Comtrade Ltd. v. ACIT (2024) 296 Taxman 214 (Del), decided on 6 November 2023, and the Gujarat High Court took the same view earlier in Kunal Structure (India) (P.) Ltd. v. DCIT [2020] 113 taxmann.com 577 (Guj), decided on 24 October 2019. Second, the three-month limit introduced in 2021 operates from the date of amendment, and a practitioner should confirm against the transitional wording of the Finance Act 2021 which assessment years it governs before relying on it.

Section 292BB of the Income-tax Act: Scope and Applicability

Section 292BB of the Income-tax Act was inserted by the Finance Act 2008 with effect from 1 April 2008. It addresses the consequences of an assessee participating in assessment or reassessment proceedings despite defects in the service of a notice. In substance it provides that where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, any notice required to be served on him is deemed to have been duly served in time and in accordance with the Act, and he is precluded from objecting that the notice was (a) not served upon him, (b) not served upon him in time, or (c) served upon him in an improper manner. A proviso excepts the case where the assessee raises the objection before the assessment or reassessment is completed.

The provision is a deeming rule. It exists because tax administration is full of technical misadventures: a notice posted to an old address, an e-mail that bounced, a notice served through a mode the rules do not quite sanction. Where the taxpayer in fact turned up and answered, it would be unreasonable to unravel an entire assessment because of how the paper reached her. The section is directed at that mischief, and its protection of the Revenue is real, but it has two built-in limits that the courts have been quick to enforce: the participation must be genuine, and the objection must not have been taken before the assessment was finished.

Absence, Lateness And Bad Service: The Three Categories

The cases are best understood by sorting the possible defects into three boxes.

The first box holds the case where no notice was issued at all. Here the authorities are consistent. In CIT v. Laxman Das Khandelwal (Civil Appeals 6261-6262 of 2019, decided 13 August 2019), the Supreme Court dismissed the Revenue’s appeals against orders quashing an assessment in which no section 143(2) notice had ever emanated from the department, even though the assessee had taken part in the proceedings. The Court read section 292BB as curing infirmities in the manner of service of a notice that has actually been issued by the department, and held that it is “not intended to cure [the] complete absence of notice itself”. The Delhi High Court had earlier reached the same conclusion in a reassessment setting in PCIT v. Jai Shiv Shankar Traders (P.) Ltd. (2015) 64 taxmann.com 220 (Del), holding that section 292BB covers a failure of service and not a failure to issue.

The second box holds a notice that was issued and served properly in the physical sense, but outside the statutory period. Here the law is less uniform in its reasoning, though the weight of authority points one way. In Alpine Electronics Asia Pte Ltd. v. DGIT (2012) 341 ITR 247 (Del), the High Court treated service within the prescribed time as mandatory in a section 147 reassessment, and added that section 292BB did not rescue the Revenue because the assessee had objected before the order was made. The Delhi High Court later applied the same approach in PCIT v. Silver Line (2016) 383 ITR 455 (Del), where participation in the reassessment proceedings was held not to dispense with a valid section 143(2) notice. The Karnataka High Court, in PCIT v. Cherian Abraham [2022] 137 taxmann.com 73 (Kar), a section 153C case, reasoned that section 292BB presupposes a notice that was issued within the limitation period and cures only defects of service. Recent High Court and Tribunal decisions reported in 2026 appear to follow the same line, though the reports we could access were secondary summaries.

The third box holds the notice issued in time but defectively delivered, which is exactly the situation section 292BB was written for. If the assessee participates and does not object before the assessment is complete, the objection is shut out.

The Argument For The Revenue, Fairly Stated

The Revenue’s position is not frivolous, and it deserves a fair account. Its first point is textual: clause (b) of section 292BB speaks of a notice “not served upon him in time”. If the Legislature wished to shield only defects of mode, the argument runs, it would not have mentioned time. A late notice that the assessee answered without protest therefore falls, on this reading, within the words of the section. Its second point is practical: the assessee who participates, files explanations and receives the benefit of a hearing has suffered no prejudice, and the purpose of a notice, which is to give an opportunity of being heard, has been met. Its third point is historical: some earlier decisions took a lenient view of a missing notice where the assessee participated. The Delhi High Court’s 2011 decision in CIT v. Madhya Bharat Energy Corporation Ltd. (2011) 337 ITR 389 (Del) is sometimes cited in this connection, for the view that in a reassessment under sections 147 and 148 a separate section 143(2) notice was not strictly required where questionnaires had afforded the assessee a full opportunity.

The Argument For The Assessee, Fairly Stated

The assessee’s answer begins with the structure of the Act. The proviso to section 143(2) fixes a time limit in terms that are prohibitory, and a limit of that kind marks the boundary of the officer’s authority; an officer who acts beyond it has no power to assess. Section 292BB, the argument continues, operates on a notice that has been validly issued and speaks of service, which is a different act from issue. A deeming provision, being an exception, is read narrowly, and it cannot be stretched to confer a jurisdiction that the proviso withholds. The proviso to section 292BB itself shows the same caution: an objection taken before the assessment is complete is never shut out. Finally, the assessee points to the weight of the case law set out above, in which the later and higher decisions of the Supreme Court and of several High Courts speak of the notice as mandatory. As to the 2011 Delhi decision, a careful reader should note that it has been described in later litigation as one in which the point about section 143(2) was not framed as a question of law at the time the appeal was admitted, and the same High Court later took a contrary view in Jai Shiv Shankar and Silver Line. It is therefore a thin foundation for the Revenue.

Can Section 292BB Cure a Late Section 143(2) Notice?

On a candid reading, the Supreme Court has settled two things: that the notice is indispensable, and that section 292BB does not make up for the complete absence of one. It has not, so far as the authorities consulted show, decided squarely whether a notice that is issued but out of time can be saved by participation under clause (b) of section 292BB. The High Courts that have addressed the question have largely answered in the negative, treating the time limit as part of what makes the notice valid. A taxpayer should therefore treat the point as strongly supported but not closed by a Supreme Court ruling, and the Revenue’s textual argument on the words “in time” is the main reason a careful practitioner would not call it concluded.

Section 143(2) Notice in Reassessment and Faceless Proceedings

In reassessment, the second return furnished in response to a notice under section 148 is treated, so far as may be, as a return under section 139, and that is the route by which section 143(2) is engaged. The post-2021 reassessment architecture, with its show-cause notice under section 148A, did not remove the need for the scrutiny notice, and decisions reported in 2026 from the Gujarat and Patna High Courts continue to apply the mandatory-notice reasoning to reassessments. Separately, a defect can arise because the notice was issued by an officer who did not hold jurisdiction over the assessee, and the Supreme Court dismissed the Revenue’s special leave petition in a case of that kind in July 2022 (ACIT v. S.K. Industries), though a dismissal of that sort is not a binding declaration of law. The wider question of which officer, the jurisdictional AO or the faceless one, may act in reassessment is under active litigation after the Finance Act 2026, and readers should consult the companion article on section 151A.

The Income-tax Act 2025

The Income-tax Act 2025 came into force on 1 April 2026 and re-enacts these rules. The scrutiny notice provision of old section 143(2) now appears in section 270, with the time limit in the same section, in substance unchanged at three months from the end of the financial year in which the return is furnished. Old section 292BB reappears as section 523, headed “Notice deemed to be valid in certain circumstances”, in substantially the same words, with minor changes of expression and the proviso set out as a separate sub-section. The neighbouring provision on technical defects, old section 292B, now section 522, was amended by the Finance Act 2026 to address DIN (document identification number) defects and to treat approvals as administrative, but we found no sign that section 292BB or section 523 was itself altered. For assessment years governed by the 1961 Act, the case law above continues to apply.

Practical Lessons

For an assessee, the safest course is to raise the objection on notice, in writing, before the assessment order is passed, because both the proviso to section 292BB and the reasoning in Alpine make the timing of the objection decisive. For the Revenue, the safest course is to keep proof of issue and service of the notice within the limit, since no later deeming rule is certain to rescue a notice that cannot be shown to have been issued in time. Both sides should keep in mind that the limitation runs from the original return and not from its correction.

Frequently Asked Questions

Can an assessment be challenged if no Section 143(2) notice was issued? Yes. An assessment made without issuing the mandatory notice under Section 143(2) can be challenged as invalid. Section 292BB does not cure the complete absence of a notice, even where the assessee participated in the proceedings. The Supreme Court affirmed this position in CIT v. Laxman Das Khandelwal (2019).

Can a late Section 143(2) notice invalidate an assessment? Not formally, since the notice exists, but the High Courts that have considered the point have mostly held that service within the statutory period is mandatory and that section 292BB does not save a notice served outside it (Alpine Electronics; Silver Line; Cherian Abraham). The Supreme Court has not squarely ruled on this.

What replaced Section 143(2) and Section 292BB under the Income-tax Act 2025? Section 143(2) of the Income-tax Act, 1961, corresponds to Section 270(8) and (9) of the Income-tax Act, 2025, while Section 292BB corresponds to Section 523. The provisions substantially retain the earlier legal framework.

Sources & Citations

• ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC), Civil Appeal 1198 of 2010, decided 2 February 2010 (parallel citation 188 Taxman 113 not independently verified).
• CIT v. Laxman Das Khandelwal, Civil Appeals 6261-6262 of 2019, Supreme Court, 13 August 2019; reported (2019) 417 ITR 325 (SC) (ITR citation not independently verified).
• PCIT v. Jai Shiv Shankar Traders (P.) Ltd. (2015) 64 taxmann.com 220 (Del), ITA 519/2015, 14 October 2015.
• Alpine Electronics Asia Pte Ltd. v. DGIT (2012) 341 ITR 247 (Del).
• PCIT v. Silver Line (2016) 383 ITR 455 (Del) (judgment text and date not retrieved).
• PCIT v. Cherian Abraham [2022] 137 taxmann.com 73 (Kar).
• SMC Comtrade Ltd. v. ACIT (2024) 296 Taxman 214 (Del), 6 November 2023.
• Kunal Structure (India) (P.) Ltd. v. DCIT [2020] 113 taxmann.com 577 (Guj), 24 October 2019.
• CIT v. Madhya Bharat Energy Corporation Ltd. (2011) 337 ITR 389 (Del).
• ACIT v. S.K. Industries (SC, SLP dismissed 19 July 2022) (single secondary source).
• Income-tax Act 1961, ss.143(2), 147, 148, 148A, 292B and 292BB (s.292BB inserted by the Finance Act 2008 w.e.f. 1 April 2008; s.143(2) proviso as amended by the Finance Acts of 2016 and 2021).
• Income-tax Act 2025, ss.270, 522 and 523 (in force 1 April 2026); Finance Act 2026 (Act 4 of 2026).

© Bhatt & Joshi Associates. This article is general information, not legal advice.

Related reading

• Reassessment under Sections 147, 148 and 148A: How the Law Reopens a Closed Year
• Section 151A and Faceless Reassessment: Who May Issue the Notice, the Jurisdictional or the Faceless Officer?
• Search Assessments under Sections 153A and 153C of Income Tax Act: The “Incriminating Material” Requirement