Section 143(2): when an assessment is void for want of notice

A reassessment notice under section 148 arrives. The assessee writes back that the return already filed under section 139 should be treated as the return in response. The Assessing Officer issues a questionnaire under section 142(1), the assessee answers it, hearings take place, and an order under section 143(3) read with section 147 follows. Nobody issued a notice under section 143(2), and nobody said anything about it until the appeal.

That is the fact pattern the Supreme Court decided on 28 October 2026 in Principal Commissioner of Income Tax, Bhubaneswar v. Orissa Mining Corporation Ltd. The Revenue’s case was that the assessee had appeared and cooperated, so section 292BB precluded the objection; that no notice was needed once the assessee adopted its existing return; and that the section 142(1) letter did the work anyway. All three arguments failed, and the appeals were dismissed.

The decision matters beyond its own facts because it settles, at the level of the Supreme Court, a question the High Courts had been answering for eleven years without review. It also has a boundary that is easy to miss. The rule rests on the words of the statute that applies, and the statute that applies to a search assessment under section 153A is not the statute that applied in Orissa Mining Corporation. That is why an assessee whose file is a reassessment and an assessee whose file is a search assessment are, on this point, in very different positions, and why the position changes again for a search initiated on or after 1 September 2024.

Key points

• A notice under section 143(2) is the statutory precondition of an assessment under section 143(3). The sub-section says the Assessing Officer or the prescribed income-tax authority “shall serve” it.
• In Orissa Mining Corporation the Supreme Court held at paragraph 13 that the notice is a sine qua non for a reassessment under section 147, and at paragraph 17 that participation in the proceedings does not confer jurisdiction to frame an assessment under section 143(3).
• Section 292BB deems service, not issue. Its three limbs are a notice not served, not served in time, and served in an improper manner. The Court held at paragraphs 15 and 16 that the deeming fiction can come into play only where a notice is alleged to have been sent.
• Asking that the earlier section 139 return be treated as the return in response to a section 148 notice does not absolve the Revenue. The assessee has furnished a return and remains bound by it, so the obligation under section 143(2) stands.
• A letter under section 142(1) is not compliance. A letter issued after the proceedings have commenced “would not cover up the lacuna and would not validate what is non est” (paragraph 22).
• Where no return is filed at all, section 143(2) has nothing to operate on and the route is section 144. That exception is real but narrow, and the Revenue has to establish it.
• In section 153A and section 153C assessments the position is different, because neither section incorporates section 143(2) as section 158BC(b) did. The High Courts are in conflict on section 153C.
• For searches initiated on or after 1 September 2024 the first proviso to section 158BC(1)(a) says the scrutiny notice “shall thereafter be issued”, unqualified. Section 294(1)(a)(i) of the Income-tax Act, 2025 is in the same terms from 1 April 2026.

What the Supreme Court decided

Principal Commissioner of Income Tax, Bhubaneswar v. Orissa Mining Corporation Ltd., 2026 INSC 1171, is a reportable judgment of Sanjay Kumar J and Sanjeev Sachdeva J, delivered by Sachdeva J on 28 October 2026. It disposes of a civil appeal arising out of Special Leave Petition (C) No. 14546 of 2023 together with appeals out of Special Leave Petitions (C) Nos. 25931 of 2026, 25932 of 2026, 3350 of 2024 and 25882 of 2026. For Orissa Mining Corporation Ltd. the assessment years are 2008-09, 2010-11 and 2011-12; for the other respondent, Bijoy Kishore Mohanty, they are 2009-10 and 2010-11.

The procedural history is uniform across the appeals. The assessees filed returns under section 139 which were assessed under section 143(3). The Revenue reopened under section 147 and issued notices under section 148 requiring returns in the prescribed form. Orissa Mining Corporation replied that its original return should be treated as the return in response; Bijoy Kishore Mohanty refiled the same return. No notice under section 143(2) was issued. Notices under section 142(1) went out seeking documents and stock information, and reassessment orders followed. The Commissioner (Appeals) rejected the objection on the ground that the assessees had participated after the section 148 and section 142(1) notices and could not raise the point at the appellate stage. The Tribunal held the proceedings vitiated and set the orders aside, and the High Court upheld the Tribunal.

The Court framed three questions at paragraph 3:

(i) Whether Section 292BB of the Income Tax Act, 1961 precludes an Assessee from raising an objection in any proceedings under the Act regarding non-service of a notice under Section 143(2) of the Act, if the Assessee had appeared and cooperated during the reassessment proceedings and had not raised any objection with regard to non-issuance of a notice under Section 143(2) of the Act? and

(ii) Whether an Assessee who requests that the earlier Return of Income filed under Section 139 of the Act be treated as the Return of Income filed in response to a notice under Section 148 of the Act is not required to be given a notice under Section 143(2) of the Act?, and

(iii) Whether a letter given by the Assessing Officer during the course of reassessment proceedings, requiring the Assessee to explain the grounds on which re-assessment of income was proposed, would tantamount to sufficient compliance of the provision of Section 143(2) of the Act?

All three were answered against the Revenue at paragraph 23. The reasoning repays reading in sequence, because each step is doing different work.

The notice is a condition of the jurisdiction, not a courtesy. At paragraph 13 the Court, after setting out Assistant Commissioner of Income Tax and Another v. Hotel Blue Moon, said that a notice under section 143(2) is mandatory because it grants the assessee an opportunity to produce the evidence on which he claims relief, that it is a sine qua non for a proceeding for reassessment under section 147, and that in its absence “no further proceedings can be undertaken by the Revenue”. At paragraph 17 it put the same point in jurisdictional terms: the Assessing Officer cannot undertake a reassessment under section 143(3) read with section 147 unless the notice has been issued, and “Mere participation of the Assessee in the assessment proceedings, in the absence of a notice under Section 143(2) of the Act, does not confer jurisdiction on the Assessing Officer”.

Section 292BB needs a notice to work on. The Court set out the section at paragraph 14 and analysed it at paragraph 15. The deeming fiction operates where an assessee has appeared or cooperated, and it precludes objections about service, timely service and proper service. Then the sentence that decides the appeal: “Such a deeming fiction can come into play only if notice is alleged to have been sent by the Revenue.” Paragraph 16 completes it. Only when the Revenue contends that a notice was sent is the participating assessee precluded. The fiction “cannot come into play where the Revenue has admittedly not even issued the notice”, and where the Revenue itself contends that no notice was sent, “the provision of Section 292BB will have no applicability”.

Adopting the earlier return is still furnishing a return. Paragraph 18 deals with the second question. In response to a section 148 notice the assessee has the option to file a fresh return. If he does not wish to, “it is open to the Assessee … to merely state that its earlier Return of Income be treated as the Return of Income in response to the notice and he remains bound by it”. It is then unnecessary to refile a copy. Because the assessees in these appeals had chosen that course and reiterated their returns, the obligation to issue a section 143(2) notice “cannot be dispensed with”.

A section 142(1) letter is not the notice. Paragraph 22 answers the third question. A letter under section 142(1) given during the reassessment, requiring the assessee to explain the grounds on which reassessment was proposed, “would not satisfy the requirements of a notice under section 143(2) of the Act”. The notice under section 143(2) is a sine qua non “for commencing the proceedings”, and “A letter issued after commencing the proceedings would not cover up the lacuna in the proceedings and would not validate what is non est.”

Two things about the judgment will matter to the way it is used. The first is that the Supreme Court’s treatment of section 292BB is its own addition rather than an affirmance. The Orissa High Court below, in a judgment of Dr. S. Muralidhar CJ and A. K. Mohapatra J in ITA No. 20 of 2017 dated 25 February 2022, reasoned from Hotel Blue Moon and held at its paragraph 8 that a belated letter from the Assessing Officer does not cure the omission; it never mentioned section 292BB at all. Paragraphs 15 to 17 of the Supreme Court judgment are therefore fresh reasoning, not a review of reasoning below.

The second is the Court’s own description of what it was doing at paragraph 23: it found “no infirmity in the view taken by the Income Tax Appellate Tribunal, as affirmed by the High Court”. The three answers are stated as answers to questions of law, which is how they will travel.

The sub-section, and the two words that decide most arguments

Section 143(2) of the Income-tax Act, 1961 reads, on the Department’s own current text:

(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return:

Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.

The grammatical oddity in “if, considers it necessary or expedient” is in the enacted text as the Department prints it, and should not be silently tidied in a submission that quotes the sub-section.

Four features of those words carry most of the litigation.

“Shall serve”, not “may serve”. The discretion sits in the condition, in whether the officer considers it necessary or expedient, and not in the verb. Once the officer decides to make an assessment under section 143(3), the notice is not optional.

The word is “serve”, here and in the proviso, but “issued” elsewhere. Section 143(3) speaks of “the notice issued under sub-section (2)”. So does section 144(1)(c), which makes a failure to comply with a notice “issued under sub-section (2) of section 143” a trigger for best judgment assessment. So does the first proviso to the substituted section 158BC(1)(a). The Act is not consistent, and the inconsistency is not academic: section 292BB cures defects in service only, so the whole battle over what that section can reach is fought on the gap between issue and service. Any passage in a submission that glides between the two will be attacked, and should be.

The limit runs from the financial year in which the return is furnished. Not the assessment year, and not from the date of the notice. Three months since 1 April 2021, when the Finance Act 2021 (Act No. 13 of 2021) substituted “three” for “six” with effect from that date. A notice served up to 31 March 2021 is tested against the proviso as it stood when it was served, which was six months from the end of the financial year in the later years and, in the years the Gujarat decisions below cover, twelve months. Because the proviso is keyed to the year of furnishing rather than to the date of the notice, a return furnished in financial year 2020-21 needs care.

The sub-section names two possible issuers, disjunctively. The Assessing Officer or the prescribed income-tax authority, “as the case may be”. The prescribed authority is prescribed by rule 12E and designated by notification, and in a case taken into faceless assessment the notice comes from the National Faceless Assessment Centre and names no rank. The provision page on section 143(2) sets out the designations and the gaps in them. In a faceless case the section 143(2) notice is generated and served through the National Faceless Assessment Centre under the procedure in section 144B, so an objection that the notice did not come from the jurisdictional Assessing Officer is met by section 144B itself and should not be pleaded as non-issuance.

The companion provision is section 142(1), headed “Inquiry before assessment”. It lets the Assessing Officer serve a notice on a person who has made a return, or whose time to file has expired, requiring him under clause (i), where he has not filed within time, to furnish a return; under clause (ii) to produce accounts or documents; and under clause (iii) to furnish information in writing, verified in the prescribed manner, in such form and on such points or matters as the Assessing Officer may require. It is an information-gathering power. Orissa Mining Corporation is the first Supreme Court decision to say in terms that exercising it is not compliance with section 143(2), and the reason is structural: the two sub-sections do different jobs. Section 142(1) obtains material from the assessee; section 143(2) tells the assessee that the Department proposes to go behind his return and invites him to support it with evidence. A questionnaire asking for stock statements is not an invitation to defend a return.

Where the rule came from: Hotel Blue Moon and legislation by incorporation

Everything in this area runs back to Assistant Commissioner of Income Tax and Another v. Hotel Blue Moon, decided on 2 February 2010 by S. H. Kapadia J and H. L. Dattu J, judgment by Dattu J, in Civil Appeal No. 1198 of 2010 with Civil Appeal Nos. 1199 to 1203 of 2010, reported at (2010) 3 SCC 259 and (2010) 321 ITR 362. The appeals came from the Gauhati High Court, which had decided for the assessee.

It was a block assessment under Chapter XIV-B, and the Court construed section 158BC(b). Sections 147 and 148 are nowhere construed in it. The question the Court framed for itself at paragraph 7 was whether service of a notice under section 143(2) within the prescribed period is a pre-requisite for a block assessment.

The then section 158BC(b) required the Assessing Officer to determine the undisclosed income of the block period in the manner laid down in section 158BB, and provided that “the provisions of section 142, sub-sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply”. The Department argued that “so far as may be” made the section 143(2) notice optional. At paragraph 15 the Court held that an Assessing Officer who rejects the section 158BC(a) return “must necessarily issue notice under Section 143(2) of the Act”, that “no assessment could be made without issuing notice under Section 143(2) of the Act”, and that the omission to issue it “cannot be a procedural irregularity and the same is not curable”. At paragraph 16 it added that where the officer repudiates the return and proceeds to enquire he must necessarily follow section 142 and sub-sections (2) and (3) of section 143, and rejected the Revenue’s reading of “so far as may be”, saying it saw no reason to restrict the scope and meaning of the expression. At paragraph 17 it relied on section 158BH, which applies the other provisions of the Act to block assessments save as otherwise provided in the Chapter.

The ratio is one of legislation by incorporation. Chapter XIV-B expressly pulled section 143(2) into the block assessment scheme, and the Court refused to read the incorporating words down. That is the whole of it, and it explains both why the rule travels where it does and why it does not travel where it does not.

Two qualifications in the judgment itself are routinely left out, and should not be.

The first is that Hotel Blue Moon is not an unqualified rule even within Chapter XIV-B. In the same paragraph 15 the Court observed that if the Assessing Officer finds the undisclosed income to be the same as the assessee returned, there is no reason to issue a notice under section 143(2); the notice is needed where the officer proposes to go behind the return and assess under section 143(3). The requirement is tied to an enquiry, not to the existence of a return.

The second is that paragraph 15 is a mixed paragraph. Its closing part records the department’s contention, introduced as “However, it is contended by Sri Shekhar, learned counsel for the department”, the authority the department cited on the meaning of “so far as may be”, and the authority the respondent cited in answer. A submission that quotes the whole of paragraph 15 as the Court’s holding is quoting the Revenue’s argument back at the Bench.

The extension of Hotel Blue Moon from section 158BC to reassessment under sections 147 and 148 was the work of the High Courts, not of Hotel Blue Moon itself, and it was made by treating the deeming in section 148 (which provides that the return furnished in response is treated as if it were a return required to be furnished under section 139) as the bridge that brings the section 143 machinery into the reassessment. Whatever the merits of that step, it is now authoritative: the Supreme Court proceeded on it in Laxman Das Khandelwal and has now stated it in its own voice in Orissa Mining Corporation at paragraph 13.

Section 292BB: what it cures, and the line it cannot cross

Section 292BB was inserted by the Finance Act, 2008 with effect from 1 April 2008. Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it deems any notice under any provision of the Act which is required to be served upon him to have been duly served upon him in time, and precludes him from objecting 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”. The proviso disapplies the section entirely where the assessee raised such objection before the completion of the assessment or reassessment.

Every limb is about service. The section deems a notice served; it does not deem a notice issued. That reading was settled by the Supreme Court in Commissioner of Income Tax v. Laxman Das Khandelwal, decided on 13 August 2019 by Uday Umesh Lalit J (author) and Vineet Saran J in Civil Appeal Nos. 6261 and 6262 of 2019. (The judgment is also reported at (2021) 18 SCC 691, which is how Orissa Mining Corporation cites it; 13 August 2019 is the date.) At paragraph 9, in the Court’s own words:

It is, however, to be noted that the Section does not save complete absence of notice itself. 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.

Orissa Mining Corporation adds the step that makes this operational. If section 292BB needs a notice that “emanated from the department”, then the question in every case is whether the Revenue says a notice was sent. Paragraph 16 draws the consequence: where the Revenue itself contends that no notice was sent, the section has no applicability. So the Revenue cannot plead section 292BB and simultaneously accept, as it did in these appeals, that no notice was issued. The two positions are inconsistent.

That is also the point at which the Revenue’s best practical answer has to be stated, because it is not an answer on the law at all. Orissa Mining Corporation decides a case in which the Revenue accepted that no notice had issued. Paragraph 15 makes the deeming depend on a notice “alleged to have been sent”, and paragraph 16 withdraws the section only where the Revenue itself contends that none was sent. Where the Department instead produces an order sheet entry, a system-generated despatch acknowledgment, or a register showing that something went out on a date, a notice is alleged to have been sent within paragraph 15, section 292BB is fully engaged, and the assessee is thrown back on the proviso and on the facts of service, where I-Ven Interactive is the governing authority and the record rather than the ratio decides the appeal. So the decision does not convert every missing notice into a win. Establishing non-issuance is still the whole of the work, and it is done on the Department’s own file.

The other half of the picture is what section 292BB does reach, and the answer is a good deal. Principal Commissioner of Income Tax, Mumbai v. I-Ven Interactive Limited, decided on 18 October 2019 by M. R. Shah J (author), Indira Banerjee J and Uday Umesh Lalit J in Civil Appeal No. 8132 of 2019 for assessment year 2006-07, is the counterweight. The notice had been sent within time to the address in the PAN database. The assessee said it had moved and pointed to the new address in its return of income and to a Form 18 filed with the Registrar of Companies. The Court held that mere mention of the new address in the return does not suffice, that filing Form 18 with the Registrar cannot be said to be an intimation to the Assessing Officer, that the PAN database must be updated, and that once the notice had gone to the PAN address within time the actual service upon the assessee thereafter “would be immaterial”. The High Court, Commissioner (Appeals) and Tribunal orders holding the assessment bad were set aside and the matter was remanded on merits.

Put the two together and the law on curability is reasonably clear at the poles. Non-issuance is fatal and uncurable. Defective service of a notice that did issue is curable, and timely issue to the address on the Department’s own record is enough. What is not clear is the middle, and anyone who draws a bright line between the two poles is overstating the position. A notice issued late, issued by an officer without authority, or issued with a compliance window so short as to be illusory sits between them, and the decisions are not consistent about which side of the line each falls on.

One structural point is often missed when section 292BB is pleaded. It travels with section 292B, and they do different jobs. Section 292B saves a return, assessment, notice or other proceeding from invalidity for a mistake, defect or omission in it, where it is in substance and effect in conformity with the intent and purpose of the Act. Section 292BB deems service. A notice naming the wrong assessment year is a section 292B question; a notice sent to the wrong address is a section 292BB question. Critically, section 292B has no proviso. An objection raised before completion of the assessment takes section 292BB out of the case entirely and leaves section 292B exactly where it was, so an assessee who wins on the proviso has not thereby disposed of the Revenue’s other curative argument.

The leading illustration of that boundary is a notice in the name of a company that had already ceased to exist. In Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Limited, Civil Appeal No. 5409 of 2019 arising out of Special Leave Petition (C) No. 4298 of 2019, decided on 25 July 2019 by Dr. Dhananjaya Y. Chandrachud J (author) and Indira Banerjee J for assessment year 2012-13, the amalgamating company had ceased to exist on the sanctioned scheme of amalgamation and the jurisdictional notice went out in its name. The Court held at paragraph 19 that such an entity cannot be regarded as a person under section 2(31) against whom an assessment can proceed and that initiating proceedings against it was void ab initio. It went on to hold, in its own voice, that the defect is “a substantive illegality and not a procedural violation of the nature adverted to in Section 292B”, so that section does not reach it, and that “Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law”. Those two sentences should be pinned by their words rather than by a paragraph number, because the Supreme Court’s own reproduction of them in Mahagun Realtors carries numbering that does not match the text in ordinary circulation. So a notice to a non-existent entity is not a notice with a defect in it. It is no notice at all, which is why the question is a section 292B question and not a section 292BB one, and why the proviso to section 292BB does nothing for the assessee: there is no deeming about service for the proviso to displace.

The qualification is Principal Commissioner of Income Tax (Central)-2 v. Mahagun Realtors (P) Ltd., decided on 5 April 2022 by Uday Umesh Lalit J and S. Ravindra Bhat J, judgment by Bhat J, in the appeal arising out of Special Leave Petition (C) No. 4063 of 2020 for assessment year 2006-07. The Court held at paragraph 42 that whether an assessment in the name of a dissolved amalgamating company is void “ordinarily cannot be determined on a bare application” of the winding up provisions, and that the answer turns on “the terms of the amalgamation and the facts of each case”. It distinguished Maruti Suzuki at paragraphs 33 to 35 and 40 on the ground that the assessee had given no intimation of the amalgamation for the year in question, had filed the return in the amalgamating company’s own name and under its permanent account number, and had answered the amalgamation query in that return “not applicable”, so the holding out was its own. At paragraph 43 it set aside the High Court’s order and restored the appeal to the Tribunal on the remaining issues. Mahagun Realtors therefore does not restore section 292BB to the argument. What it decides is that the factual premise, that the entity was dead and the Department had been told so, has to be established before Maruti Suzuki applies at all, and an assessee who held himself out as the dead company throughout will not establish it.

Mahagun Realtors also contains a reservation about the foundation of that line, and a Revenue representative will press it. At paragraph 32, in its own voice, the Court observed that although Saraswati Syndicate and the Spice line of decisions had been noticed, the legislative change introducing the definition of amalgamation had not been taken into account, and the tax treatment in the various provisions of the Act had not been brought to the Court’s notice in the previous decisions. The assessee’s answer is that the observation is not a holding, that the same Bench went on at paragraph 42 to state the test in terms that leave Maruti Suzuki intact wherever the factual premise is made out, and that no court has yet declined to follow Maruti Suzuki on the strength of paragraph 32. The Revenue’s answer is that a reasoned reservation by a later Bench of equal strength is not nothing, and that it invites a fresh look at whether corporate death by itself decides the question. Nobody has taken the point up.

Reassessment: the position after Orissa Mining Corporation

For a reassessment under section 147 the position is now as settled as it is likely to get.

The sequence is this. A notice under section 148 issues, requiring a return. Section 148(2) provides that the return so required shall be furnished in the prescribed form and verified in the prescribed manner, “and the provisions of this Act shall, apply accordingly as if such return were a return required to be furnished under section 139”. The proviso to that sub-section withdraws the deeming for a return furnished after the period specified in the notice. Once the return is in, section 143(2) operates on it, because a return deemed to be furnished under section 139 is a return “furnished under section 139” for the purposes of the opening words of section 143(2). That is the bridge, and it is the reason the rule reaches reassessment at all.

The High Courts had been applying it for years. The Delhi High Court in Principal Commissioner of Income Tax-08 v. Shri Jai Shiv Shankar Traders Pvt. Ltd., ITA 519/2015, decided on 14 October 2015 by Dr. S. Muralidhar J and Vibhu Bakhru J for assessment year 2008-09, decided the very question that became question (ii) in Orissa Mining Corporation. The assessee’s representative had stated on 16 December 2010 that the original return be treated as the return in response to the section 148 notice, and no section 143(2) notice followed. At paragraph 18 the Court held that section 292BB “would apply insofar as failure of ‘service’ of notice was concerned” and not to a failure to issue, and that failure to issue cannot be condoned by reference to section 292BB. At paragraph 19 it held the non-issue fatal to the reassessment. That Delhi High Court answer stood for eleven years and has now been confirmed in substance by the Supreme Court.

In Gujarat the line is equally settled and goes back further. In Commissioner of Income Tax, Ahmedabad-V v. Sukhini P. Modi, Tax Appeal No. 1353 of 2007 with Tax Appeals 1354 to 1357 of 2007, an oral judgment of Akil Kureshi J and Sonia Gokani J delivered by Gokani J on 10 March 2014 for assessment year 1996-97, the assessee had treated the original return as the response to the section 148 notice and the assessment was framed under section 143(3) read with section 147. The Court said at paragraph 7 that the issue was “no longer res integra” on Deputy Commissioner of Income-Tax v. Mahi Valley Hotels and Resorts, and at paragraph 9 that, the Revenue not having disputed that the section 143(2) procedure was not followed, the jurisdiction to proceed “would not be sustainable” for want of fulfilment of the mandatory requirement of issuance of notice. In Commissioner of Income Tax-III v. Nirali Specific Family Trust, Tax Appeal Nos. 112 and 113 of 2009, an oral order of Akil Kureshi J and Z. K. Saiyed J delivered by Kureshi J on 3 March 2016, the Court held, in an order that carries no internal paragraph numbers, that where no notice under section 143(2) was issued at all and the question was not one of the date of service, no error had been committed in annulling the proceedings. The Court recorded expressly that the case was not about the date of service, so Nirali should not be cited on the time limit.

The Ahmedabad Bench has applied the same rule repeatedly and, usefully, has decided what happens when the Department cannot produce the notice. In Chirag Ishwarbhai Patel v. ITO, Ward-3(3)(6), Ahmedabad, ITA Nos. 1182 and 1192/AHD/2019 for assessment year 2010-11, pronounced on 28 February 2022 by Waseem Ahmed AM and Madhumita Roy JM, the Bench recorded at paragraph 8.1 that on the original records produced by the Departmental Representative “we do not find any copy of the notice issued under section 143(2)”, and that this was not disputed. It held at paragraph 8.1, adopting the reasoning of the coordinate Bench in DCIT v. Specific Ceramics Ltd., ITA No. 121/Ahd/2019, order dated 8 June 2021, which it reproduced at paragraph 8, that the Assessing Officer was under an obligation to issue the notice, that the order under section 143(3) read with section 147 was accordingly not sustainable, and that section 292BB addresses defects in the service of a notice actually issued and cannot cure the defect. The penalty under section 271(1)(c) went with the assessment.

In Shri Mahesh P. Gandhi v. ACIT, Circle-10, Ahmedabad, ITA Nos. 1022 to 1025/AHD/2018 for assessment years 1992-93 to 1995-96, pronounced on 23 November 2022 by Waseem Ahmed AM and Siddhartha Nautiyal JM, the Bench reached the same conclusion at paragraph 13.12 on the footing that the Revenue did not produce the notice and the preserved order sheet recorded none. The order is also notable for what preceded the merits: a delay of about 2,337 days in filing was condoned, the Bench treating the cause as mattering more than the length and noting that the Revenue had filed no counter-affidavit.

The Gujarat High Court has recently confirmed a consequence of the rule that bites on a live file. In Principal Commissioner of Income Tax v. Shree Nilkanth Quarry Works LLP, R/Tax Appeal No. 159 of 2025, decided on 14 July 2026 by Bhargav D. Karia J and Pranav Trivedi J, the Court held at paragraph 10 that no interference was called for in the Tribunal’s view that, on the uncontroverted finding that no section 143(2) notice was issued, “in absence of notice under section 143(2) of the Act, there is no assessment order”, so a revision under section 263 of what is non est does not arise.

The honest counterweight is that there was once authority the other way, and why it failed is instructive. In Areva T&D India Limited v. Assistant Commissioner of Income Tax, Tax Case (Appeal) No. 2278 of 2006, decided on 8 November 2006 by R. Balasubramanian J and P. P. S. Janarthana Raja J for assessment year 1999-2000, the Madras High Court held at paragraph 6 that where the returns were identical and the assessee had participated, the reopening was valid and “only irregularities” had been committed, and at paragraph 11 remanded with a direction to issue a section 143(2) notice. In Commissioner of Income Tax, Hisar v. Ram Narain Bansal, Income Tax Appeal No. 814 of 2010, decided on 13 July 2011 by Adarsh Kumar Goel ACJ and Ajay Kumar Mittal J for assessment year 2002-03, the Punjab and Haryana High Court held at paragraph 12 that the assessee had attended on several dates and raised no objection regarding issuance and service of notice, and at paragraph 13 answered the question for the Revenue. The defect in the second of those is instructive: the Court never examined whether the notice had in fact been issued, and rested on section 292BB and the absence of a timely objection, which is exactly the conflation of issuance with service that Laxman Das Khandelwal and Jai Shiv Shankar reject. Areva T&D predates Hotel Blue Moon and was decided before the Supreme Court held the omission incurable, which is why it no longer stands as authority on curability.

When no return is filed at all

The opening words of section 143(2) are “Where a return has been furnished”. If nothing was furnished, there is nothing for the sub-section to operate on, and the Act provides a different route: section 144, whose clause (1)(a) is framed for a person who “fails to make the return required under sub-section (1) of section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section”. A best judgment assessment follows, after a show-cause notice under the first proviso unless a section 142(1) notice has already issued.

Two High Courts have held in terms that no section 143(2) notice is required where no valid return was filed in response to a section 148 notice.

In Commissioner of Income Tax, Trichur v. Shri V. R. Sreekumar, I.T.A. No. 52 of 2012, decided on 7 April 2014 by Antony Dominic J and Anil K. Narendran J for assessment year 2000-01, the Kerala High Court held at paragraph 10 that a return filed belatedly on 15 October 2007 was an invalid one, at paragraph 11 that section 142 does not come into operation in section 148 proceedings except to call for documents, and at paragraph 12 that because no valid return was filed no section 143(2) notice was required, so the Tribunal’s contrary view could not be sustained. In C. B. Srinivasan v. Deputy Commissioner of Income Tax, W.P. Nos. 1259 and 1260 of 2016, decided on 21 March 2016 by M. Duraiswamy J sitting singly, the Madras High Court held at paragraph 7 that the question of a section 143(2) notice arises only after a return is filed pursuant to the section 148 notice, and does not arise where the petitioner has not submitted a return.

Neither is strong authority, and the article would be misleading if it said otherwise. V. R. Sreekumar sits uneasily with itself: at paragraph 8, rejecting the Revenue’s first contention, the same Bench held that because the Department had accepted and acted on the old return, “the Department cannot now be allowed to contend that the assessee did not file a return”, while paragraphs 10 to 12 hold the resubmission of that same return on 15 October 2007 invalid for being outside the period the section 148 notice allowed. The Revenue’s answer is that the two findings operate at different stages, the first on the original assessment and the second on the reassessment, and the judgment does not reconcile them. C. B. Srinivasan is a single judge in writ jurisdiction with one paragraph of reasoning. There is no Gujarat High Court or Ahmedabad Bench decision on the point, so an Ahmedabad assessee facing the argument is not meeting jurisdictional authority.

The exception also has a practical boundary. Orissa Mining Corporation paragraph 18 holds that merely stating that the earlier return be treated as the return in response is a sufficient answer to the notice and binds the assessee to it, which means a case conducted on that footing is not a no-return case at all; where the Assessing Officer proceeded on that basis and never called for a fresh return, the Revenue cannot afterwards recharacterise the file.

Our view. The exception is real but it is narrow, and it is for the Revenue to establish. The question on a live file is not whether a fresh return was physically filed but whether the assessee put a return into the reassessment at all, by filing one, by adopting the earlier one in writing, or by conduct that the Assessing Officer accepted as doing so. Where any of those happened, the obligation under section 143(2) attaches and Orissa Mining Corporation applies. Where the assessee genuinely filed nothing and adopted nothing, the jurisdictional ground is not available and the arguments lie elsewhere, in the validity of the reopening and in the first proviso to section 144(1).

A notice served late

A notice issued but served outside the proviso is a different defect from a notice never issued, and it has its own line of authority.

The foundational Gujarat decision is Deputy Commissioner of Income-Tax v. Mahi Valley Hotels and Resorts, decided on 31 August 2005 by D. A. Mehta J sitting singly for assessment year 1997-98, reported at [2006] 287 ITR 360 (Guj). The return had been filed on 30 March 1997 and the section 143(2) notice first issued on 20 August 1998, beyond the then twelve month period. At paragraph 6 the Court held that because the proviso is framed in negative terms “the limitation prescribed therein is mandatory”, and that neglect of a mandatory requirement “will invalidate the whole proceeding”. Two further holdings in that judgment are useful. At paragraph 3 the Court held that the objection could be raised for the first time before the Commissioner (Appeals), whose powers are co-extensive with the Assessing Officer’s, because it is a pure question of law which the assessee can raise at any stage. At paragraph 4 it rejected the argument that participation amounted to acquiescence or waiver, though briefly. At paragraphs 7 and 8 it set out CBDT Circulars Nos. 549 of 1989 and 621 of 1991 and at paragraph 9 held that they support the mandatory reading and bind the Revenue.

Deputy Commissioner of Income Tax v. Maxima Systems Limited, Tax Appeal Nos. 386 and 387 of 1999, a common order of D. A. Mehta J and H. N. Devani J delivered by Devani J on 13 April 2010 for assessment year 1995-96, followed Mahi Valley on facts where a notice issued on 29 November 1996, a day before the twelve month period expired on 30 November 1996, was served on 2 December 1996, and rejected the Revenue’s waiver and acquiescence argument. The judgment is not internally numbered, so it should be cited without paragraph numbers.

The Gujarat chain is complete and recent. In Rameshkumar Kanaiyalal Patel, Mehsana v. ITO, Ward-2, Mehsana, ITA No. 208/Ahd/2024 for assessment year 2017-18, the Ahmedabad SMC Bench (Suchitra Kamble JM) held at paragraph 7, in an order pronounced on 19 September 2024, that the notice was due by 30 September 2019, that the notice issued in November 2019 was out of time, and that the assessment was accordingly null and void. The Gujarat High Court affirmed in Principal Commissioner of Income Tax-3 v. Rameshkumar Kanaiyalal Patel, R/Tax Appeal No. 179 of 2025, decided on 30 June 2026 by Bhargav D. Karia J and Pranav Trivedi J, holding at paragraph 9 that the notice “was not issued within the prescribed period” so the Tribunal was justified in holding the assessment null and void, and at paragraph 10 that no substantial question of law arose.

Two qualifications belong here, and both cut against the assessee.

The first is that the Gujarat line decides the timing point without engaging section 292BB at all. In Rameshkumar Kanaiyalal Patel the Revenue’s questions of law raised section 292BB and cited Laxman Das Khandelwal, and the Court did not discuss either. Mahi Valley, Maxima Systems and Nirali do not mention section 292BB. So there is no Gujarat High Court holding that section 292BB cannot save a time-barred notice, and a submission that there is would not survive the Revenue reading the judgments.

The second is that Gujarat has one decision in which a notice served after the proviso’s last day was upheld, and it is worth knowing why. In Gujarat State Plastic Manufacturers Association v. Deputy Director of Income Tax (Exemption), Special Civil Application No. 4003 of 2013, decided on 25 June 2013 by M. R. Shah J and Sonia Gokani J for assessment year 2010-11, the last date fell on a Sunday that was also a postal holiday and the notice was served on the Monday. Applying the logic of section 10 of the General Clauses Act by analogy, and the rule that law does not compel the performance of an impossibility, the Court held at paragraphs 6.01 to 6.04 that there was sufficient compliance with the proviso and dismissed the petition; at paragraph 6.05 it distinguished Mahi Valley and Maxima Systems on their facts rather than departing from them, so the decision qualifies the proviso at its margin and does not contradict the mandatory reading.

The one decision that engages both the time limit and section 292BB is Alpine Electronics Asia Pte Ltd. v. Director General of Income Tax and Others, W.P. (C) No. 7932 of 2010, decided on 24 January 2012 by Sanjiv Khanna J (author) and R. V. Easwar J for assessment years 2003-04 to 2006-07. The section 143(2) notice had been issued beyond the then six month proviso, which the Revenue admitted. At paragraph 21 the Court took as settled, on Lunar Diamonds and Vardhman Estate, that service within the statutory time limit “is mandatory and is not a procedural requirement”. At paragraph 24 it held that section 143(2) applies to section 147 and 148 proceedings. On section 292BB it reasoned at paragraphs 26 to 28 that the section incorporates an estoppel which the proviso excludes where the assessee objects before the assessment or reassessment is completed, and that since only a draft order under section 144C had been passed, which is not a final assessment order, “The proviso to section 292BB is applicable”. So Alpine got to the right answer through the proviso, not by holding that the body of section 292BB can never reach a late notice.

Our view. The interaction between section 292BB and a time-barred notice is genuinely open, and a submission that treats it as closed invites the Revenue to supply the missing authority. The argument we would advance is that the proviso to section 143(2) is a bar on the Department’s power, framed negatively, and that a deeming fiction about how a notice reached the assessee cannot create a power the proviso has withdrawn: section 292BB answers the question “was it served properly”, not the question “could it be served at all”. Mahi Valley paragraph 6 supports that reading. The Revenue’s answer, which has to be met and not ignored, is that a late notice has “emanated from the department” in the sense Laxman Das Khandelwal requires, so the complete absence carve-out does not apply to it, and that limb (b) of section 292BB, “not served upon him in time”, is on its face about exactly this. The practical conclusion is the same either way: take the objection in writing before the assessment is completed, because the proviso to section 292BB then removes the section from the case and the argument never has to be had.

Searches between 1 April 2021 and 31 August 2024

Between the two search regimes there is a window of three years and five months, and a great many search files now reaching first appeal fall inside it. Sections 153A and 153C reach only a search initiated under section 132, or a requisition made under section 132A, on or before 31 March 2021. Chapter XIV-B revives only for a search initiated on or after 1 September 2024. A search in between runs through the ordinary reassessment machinery: a notice under section 148, a return, and an assessment under section 143(3) read with section 147.

That makes this the regime in which Orissa Mining Corporation applies at full strength, because the file is simply a reassessment. The bridge is the section 148(2) deeming, exactly as it was in that case, and there is no incorporating-clause argument to be had, because no incorporating clause is needed. The Revenue cannot run the section 153A answer, that no provision prescribes the notice, and cannot run the section 158BC answer about “so far as may be”. It is left with the facts of issue and service.

Two sub-sections of the 1961 Act should be read alongside that. Section 152, headed “Other provisions”, preserves the pre-2024 reassessment provisions on two independent tracks. Sub-section (3) applies sections 147 to 151 as they stood before the Finance (No. 2) Act, 2024 to a search initiated, a requisition made, or a survey of the kind it specifies conducted, between 1 April 2021 and 31 August 2024. Sub-section (4) does the same for any other case in which a notice under section 148 was issued, or an order under section 148A(d) was passed, before 1 September 2024. So the question which version of the reassessment provisions governs a file in this window is answered by sub-section (3) on the date of the search and by sub-section (4) on the date of the notice, and on most files the two routes point to the same answer.

Search assessments: sections 153A and 153C

This is where the law parts company with itself, and where an assessee needs to know which regime his file is in before he reaches for Orissa Mining Corporation.

Section 153A governs searches initiated under section 132, and requisitions under section 132A, after 31 May 2003 but on or before 31 March 2021. Its sub-section (1) opens with a non-obstante clause, and the clause is worth reading closely: it overrides “section 139, section 147, section 148, section 149, section 151 and section 153”. Section 143 is not in that list. Clause (a) requires the Assessing Officer to issue a notice calling for returns for the relevant years, “and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139”.

So on the text there are two arguments pointing in opposite directions. Section 153A nowhere mentions section 143(2), and contains no clause like section 158BC(b) incorporating it; but the section 139 deeming in clause (a) is the same bridge that carries section 143(2) into a reassessment, and the non-obstante clause conspicuously does not displace section 143.

The courts have gone with the first of those.

The leading decision is Ashok Chaddha v. Income Tax Officer, ITA No. 271/2011, decided by the Delhi High Court on 27 July 2011 (reserved 5 July 2011) by A. K. Sikri J and M. L. Mehta J, judgment by Mehta J, for assessment year 2004-05. (There is a second Delhi High Court judgment of 2011 with the identical cause title, ITA 274/2011 decided on 5 July 2011, which is a jewellery addition case for assessment year 2006-07 and does not mention section 143(2) at all. Citing that one for this proposition is an error.) The reasoning is textual and twofold. At paragraph 9 the Bench held there is no specific provision in the Act requiring a section 153A assessment to be completed after a section 143(2) notice, and distinguished Hotel Blue Moon as a section 158BC case whose clause (b) expressly applied section 143(2) and (3), so “The law laid down in Hotel Blue Moon, is thus not applicable”. At paragraph 11 it noted that sub-section (1) starts with a non-obstante clause and that the clause nowhere prescribes for issuance of a section 143(2) notice. At paragraph 13, the core holding, it held that the words “so far as may be” cannot be stretched to the extent of mandatory issue of a section 143(2) notice, because the section 153A(1)(a) notice to file a return is the specific notice the statute requires, so “no further notice under Section 143(2) could be contemplated”. At paragraph 14 it held that the section 153A notice and the two questionnaires issued were sufficient.

That view has been followed. The Madras High Court applied it in B. Kubendran v. The Deputy Commissioner of Income Tax, Central Circle 2(1), Chennai (Investigation Wing), W.P. Nos. 3023, 3031, 3032, 3033, 3036 and 3037 of 2020, decided on 9 April 2021 by Dr. Anita Sumanth J. The Court held at paragraph 17 that Hotel Blue Moon arises under Chapter XIV-B and does not aid the petitioner; at paragraph 22 that the difference between the language of section 158BC and that of section 153A “must be attributed sufficient weightage”; at paragraph 23 that natural justice is satisfied by either a section 143(2) notice or a section 142(1) questionnaire; and at paragraph 24 it answered the issue in favour of the Revenue. (The petitioner nevertheless succeeded on separate natural justice grounds, so B. Kubendran should not be described as a case the Revenue won outright.) The Kerala High Court took the same view for section 153C in The Commissioner of Income Tax (Central), Cochin v. Shri. Promy Kuriakose, ITA Nos. 296, 301, 309, 314 and 315 of 2013, decided on 14 July 2016 by Antony Dominic J and Dama Seshadri Naidu J, holding at paragraph 16 that “there is no requirement of a notice under section 143(2)” and, in its own voice, that the then twelve month proviso has no relevance to a section 153C assessment. The Pune Bench has followed the same line: in Rajnish Bhandari, L/H of Late Shri Maneklal B. Bhandari v. ACIT, Circle-3, Pune, IT(SS)A Nos. 17, 18 and 19/PUN/2020 for assessment years 2001-02, 2002-03 and 2003-04, pronounced on 28 September 2022 by S. S. Viswanethra Ravi JM and G. D. Padmahshali AM, the Bench at paragraph 12 distinguished Laxman Das Khandelwal on the express ground that section 158BC refers to section 143(2) while section 153A does not.

Two things weaken that line.

The first is a crack in the foundation. At paragraph 10 Ashok Chaddha relied on the Delhi High Court’s own decision in CIT v. Madhya Bharat Energy Corporation Ltd., decided 11 July 2011, sixteen days earlier. That decision was reviewed on 17 August 2011 in Review Petition No. 441 of 2011, three weeks after Ashok Chaddha was delivered, on the footing that the appeal had been admitted without any question on the mandatory section 143(2) requirement, and the Delhi High Court in Jai Shiv Shankar Traders recorded at paragraph 9 that it is “not of any assistance” to the Revenue. So one of Ashok Chaddha’s props has fallen away. In fairness the point does not touch the primary textual ground at paragraphs 9, 11 and 13, which is what every later court has actually followed, and no reported decision has treated the review of Madhya Bharat Energy Corporation as displacing Ashok Chaddha.

The second is that the Delhi High Court has since confined Ashok Chaddha to its own territory. In Shaily Juneja v. ACIT Circle 34-1, W.P. (C) 10298/2022 heard with W.P. (C) 9705/2023, decided on 27 August 2024 by Yashwant Varma J and Ravinder Dudeja J, the Revenue relied on Ashok Chaddha in a reassessment. The Bench distinguished it at paragraphs 6 to 8 because it was “principally concerned with an assessment which was predicated upon a search”, and held at paragraph 13 that in a section 147 reassessment the failure to comply with section 143(2) was fatal. The Revenue’s own leading authority is therefore confined by the court that gave it, which cuts both ways: it protects Ashok Chaddha within search assessments at the price of conceding that the obligation is scheme-specific.

Section 153C deserves separate treatment, because the conflict is real. Section 153C is headed “Assessment of income of any other person”. Sub-section (1) opens with the same non-obstante clause as section 153A and directs that where the Assessing Officer is satisfied that seized money or valuables belong to, or seized books or documents pertain to or contain information relating to, a person other than the searched person, the material shall be handed over to the Assessing Officer having jurisdiction over that other person. That officer “shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A”. So section 153C routes the other person into section 153A, and takes its section 139 deeming from section 153A(1)(a) rather than containing one of its own.

Section 153C does mention section 143(2), but only as a trigger. Sub-section (2)(b) is a condition that applies where the material reaches the other person’s Assessing Officer after the due date for the return: it is satisfied where a return has been furnished “but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired”. That is a test for whether the section 153C machinery may be used at all, not a power carried into the section 153C assessment, and it should not be cited as if it were the second.

Against the Kerala and Madras view stands the Bombay High Court in Ashok Commercial Enterprises v. Assistant Commissioner of Income Tax, Central Circle 2(4), Mumbai, nine writ petitions of 2021 led by No. 2595, reserved 21 July 2023 and pronounced 4 September 2023 by K. R. Shriram J (author) and Firdosh P. Pooniwalla J, covering assessment years 2011-12 to 2019-20. At paragraph 17, which contains the Court’s own conclusions, sub-clause (e) holds that the order could at most have been passed under section 153C read with section 143(3), and that “It is a jurisdictional condition precedent to passing an order under Section 153C” that a notice under section 143(2) must be issued as held in Hotel Blue Moon, reproducing paragraphs 15 and 16 of that judgment and adopting the holding. Sub-clause (g) makes the rule absolute on that prayer “on this ground alone”, so the holding is operative and not obiter. The judgment goes on to independent grounds on the absence of a Document Identification Number and the absence of incriminating material.

Care is needed in citing it. The phrase “jurisdictional condition precedent” appears twice in the judgment. Its first appearance is at paragraph 15(a), which opens “Mr. Mistri submitted as under”, and is counsel’s submission. The holding is at paragraph 17(e).

What makes the conflict unsatisfactory is that neither side has engaged the other. Ashok Commercial Enterprises never mentions Ashok Chaddha or Laxman Das Khandelwal; Promy Kuriakose and B. Kubendran predate it. The Tribunal has begun to resolve it the way Tribunals do. In the common order in ITA Nos. 211 and 212/RPR/2026, pronounced on 25 September 2026 by R. K. Panda VP and Partha Sarathi Chaudhury JM, the Raipur Bench followed Ashok Commercial Enterprises at paragraph 17, quoted Laxman Das Khandelwal at paragraph 19, and at paragraph 20 recorded that there is no decision of the jurisdictional High Court, acknowledged the contrary Delhi view that the Departmental Representative had pressed at paragraph 14, and applied CIT v. Vegetable Products to adopt the view favourable to the assessee, holding the assessment a nullity at paragraph 24. What the Bench did not do is answer Ashok Chaddha’s textual point.

Where Gujarat and Ahmedabad stand. There is no Gujarat High Court decision on whether a section 143(2) notice is required in a section 153A or section 153C assessment, and none from the Ahmedabad Bench either. The Ahmedabad decision most often offered for the proposition is SBG Infrastructure LLP, Vadodara v. DCIT, Central Circle-2, Baroda, IT(SS)A Nos. 145, 146, 1206 and 1286/Ahd/2018, pronounced on 13 July 2021 by Rajpal Yadav VP and Amarjit Singh AM. It will not bear the weight. Its section 143(2) holding, at paragraphs 29 and 31, is given for assessment year 2014-15, which the Bench itself describes at paragraph 18 as a regular ex parte assessment under section 144 rather than one under section 153C, the search year being treated under section 153B(1)(b) at paragraph 22. The years actually assessed under section 153C, 2012-13 and 2013-14, were quashed on the section 153C jurisdiction ground, not on section 143(2). The Bench relied for the section 143(2) point on Hotel Blue Moon, Mahi Valley and Sukhini P. Modi, the last of which is itself a section 147 reassessment case. So for an Ahmedabad file the position is that the Bench has held a section 143(2) notice mandatory in a search-year regular assessment, and will not accept a section 142(1) notice as a substitute, but has not decided the section 153A or section 153C question.

Our view. For a section 153A assessment the honest advice is that the point is currently lost on authority and should be taken only to preserve it, with the real grounds lying in incriminating material, satisfaction and approval under section 153D. That redirection is not a consolation prize. The Orissa High Court in ACIT, Circle-1(2), Bhubaneswar v. Serajuddin & Co., I.T.A. Nos. 39 to 45 of 2022, decided on 15 March 2023 by Dr. S. Muralidhar CJ and M. S. Raman J for assessment years 2003-04 to 2009-10, held at paragraphs 15 and 25 that the prior approval under section 153D is mandatory and is not to be granted mechanically, at paragraph 22 that rubber stamping does not satisfy it, and at paragraph 17 that the Revenue was wrong to say the approval is not justiciable; it dismissed the Revenue’s appeals against the Tribunal’s orders setting the assessments aside. That is the same analytical move this article makes about section 143(2), treating a step the statute makes a condition of the officer’s power as something the record cannot be made to absorb. For a section 153C assessment outside Delhi, Madras and Kerala, the point is live and we would take it. The first argument is that Ashok Chaddha’s reasoning does not transfer cleanly to section 153C. Section 153C contains no notice of its own and borrows section 153A’s, and sub-section (2)(b) shows that Parliament had section 143(2) in mind when it wrote the section. The second is that the Bombay High Court has held the notice a jurisdictional condition precedent in a reasoned and operative holding; the third is that where coordinate High Courts differ and the jurisdictional High Court is silent, Vegetable Products applies. We would also put Orissa Mining Corporation in front of the Bench, not as deciding section 153C, but because two of its three answers destroy the planks the Revenue’s line rests on: that the section 153A notice and the questionnaires “were sufficient” (Ashok Chaddha paragraph 14) and that natural justice is satisfied by a section 142(1) questionnaire (B. Kubendran paragraph 23). After 28 October 2026 a section 142(1) questionnaire is not compliance with section 143(2) and participation does not confer jurisdiction, and a court asked to reaffirm Ashok Chaddha will have to say why those propositions do not apply.

Searches from 1 September 2024: the argument reverses

For searches initiated, and requisitions made, on or after 1 September 2024, Chapter XIV-B is back and search cases are assessed under the block assessment scheme. The provision that matters is section 158BC, headed “Procedure for block assessment”.

Clause (1)(a) requires the Assessing Officer to issue a notice to the searched person requiring a return of undisclosed income for the block period within a period not exceeding sixty days. Then comes the first proviso:

Provided that such return shall be considered as if it was a return furnished under the provisions of section 139 and notice under sub-section (2) of section 143 shall thereafter be issued:

That is a free-standing, mandatory command, and it is not qualified by “so far as may be”. Separately, clause (1)(b) provides that the Assessing Officer shall determine the total undisclosed income in the manner laid down in section 158BB “and the provisions of section 142, sub-sections (2) and (3) of section 143, section 144, section 145, section 145A and section 145B shall, so far as may be, apply”. That clause is the old section 158BC(b) carried forward and widened: sections 145A and 145B are new to the list, and “sub-sections (2) and (3) of section 143” survive unchanged.

So the scrutiny notice is now commanded twice over in a block assessment: once by an unqualified proviso and once by the incorporating clause that Hotel Blue Moon construed. Two further features of the substituted section bear on the same question. Sub-section (2) provides that section 143(1) does not apply to a return furnished under the section, so the processing route is closed and the only route is section 143(3). Sub-section (3) requires prior approval of an Additional or Joint Commissioner, or an Additional or Joint Director, before the clause (1)(a) notice issues. Section 158BD, which brings in the undisclosed income of any other person, works by directing that Assessing Officer to “proceed under section 158BC”, so the proviso and the clause (b) list reach a section 158BD case too.

The consequence is that the Revenue’s entire answer in search cases for fifteen years, that the incorporating words are missing, is no longer available. The strongest argument left is the narrow one, and it is Hotel Blue Moon’s own: where the block return is accepted as it stands and the Assessing Officer makes no enquiry under section 143(3), the Supreme Court itself saw no reason for a notice. That argument now has to contend with an express statutory command in the proviso, and with sub-section (2), which by switching off section 143(1) suggests that Parliament did not contemplate a block return being accepted without the section 143(3) route being taken at all.

Two further arguments remain available to the Revenue, and both should be met rather than ignored. The first is structural. The first proviso is in form a deeming about the character of the block return, that it “shall be considered as if it was a return furnished under the provisions of section 139”, with the notice clause attached as the consequence of that deeming; so on the Revenue’s reading it presupposes an assessment under section 143(3) and states what follows once the officer takes that route, rather than commanding him to take it. The second is that section 292BB continues to apply to a block assessment, because it reaches a notice “under any provision of this Act”, so a notice generated and not served remains curable in a block assessment exactly as it is elsewhere, and an assessee who pleads the first proviso still has to establish that no notice issued rather than that none arrived.

There is one textual wrinkle with no 1961 Act analogue. The first proviso says the section 143(2) notice “shall thereafter be issued”, while section 143(2) itself and its proviso say “serve” and “served”. A block assessment where the notice was issued inside the time limit but served outside it is a case the statute now describes in two different vocabularies, and nobody has litigated it.

No decision on any of this has yet been given, and in the ordinary course the first considered orders are some years away, because a search on or after 1 September 2024 has to produce a block assessment, a first appeal and then a Tribunal appeal. A writ could get there sooner.

Our view. For every search from 1 September 2024 the absence of a section 143(2) notice after the block return is a ground we would take as a matter of course, and it is materially stronger than the same ground was under section 153A. We would plead the proviso first and clause (b) second, because the proviso is unqualified and clause (b) invites the “so far as may be” argument that Hotel Blue Moon rejected but that the Revenue will run again. The section 158BC(3) prior approval, and whether it was obtained before the notice rather than after it, should be called for in the same letter.

Proving it, and when to take the point

A jurisdictional ground is only as good as the record that supports it.

The burden in practice falls on the Department’s file. The Ahmedabad Bench in Chirag Ishwarbhai Patel decided the point by examining the original records produced by the Departmental Representative and recording at paragraph 8.1 that no copy of a section 143(2) notice was in them. In Mahesh P. Gandhi the Bench relied at paragraph 13.12 on the Revenue’s failure to produce the notice and on the preserved order sheet recording none. So the practical step is to ask, in writing and early, for the notice, the dispatch record and the order sheet, and to put the absence of an answer on the record. An assessee who asserts non-issuance and asks for nothing has done half the work.

Distinguish non-issuance from non-service before pleading. The two grounds are won differently. Non-issuance is proved from the Department’s own record and is met by Laxman Das Khandelwal and Orissa Mining Corporation. Non-service, or late service, is proved from the dispatch and delivery record, and runs straight into section 292BB unless the objection was taken before the assessment was completed. I-Ven Interactive shows how little the assessee’s own knowledge of the new address is worth if the PAN database was not updated.

A notice without a Document Identification Number may be a notice that was never issued. This is the ordinary modern route into the holding in Orissa Mining Corporation, and it belongs in the pleading rather than in a footnote. CBDT Circular No. 19/2019 of 14 August 2019 directed that from 1 October 2019 no communication of an income-tax authority, notices and orders included, should issue without a computer-generated Document Identification Number quoted in its body. It permitted a manual communication only in the stated exceptional situations, only after reasons recorded in writing in the file, only with the prior written approval of the Chief Commissioner or Director General, and only with the prescribed endorsement on its face recording that it issues manually without such a number. Paragraph 4 supplies the consequence: a communication not in conformity with those directions “shall be treated as invalid and shall be deemed to have never been issued”. Paragraph 5 required a manual communication in the three permitted situations to be regularised within fifteen working days of issue, by uploading it on the system, generating the number on the system, and communicating the number to the assessee. So a section 143(2) notice that the Board’s own circular deems never to have been issued falls on the non-issuance side of Laxman Das Khandelwal: nothing emanated from the department, and section 292BB has nothing to work on. It is not a defect in service at all.

The Revenue has three answers and none of them is weak. The first is that a circular is administrative, cannot add to or take from the statute, and cannot make void what the Act leaves valid. The second is section 292B, which saves a notice or proceeding from invalidity for a mistake, defect or omission where it is in substance and effect in conformity with the intent and purpose of the Act. The third is the amendment, and it is the strongest: section 292BA of the 1961 Act, inserted by the Finance Act 2026 with retrospective effect from 1 October 2019, provides that an assessment shall not be invalid, and shall not be deemed to be invalid, for a mistake, defect or omission in quoting a computer-generated Document Identification Number, provided the assessment order is referenced by that number; and section 522 of the Income-tax Act, 2025 does the same prospectively. The third answer is narrow and can be met: section 292BA and section 522 both address a mistake, defect or omission in quoting the number, and neither addresses the absence of a number altogether, which is what the circular was aimed at. The first two have to be met differently, and neither is closed. Against the administrative-circular point the assessee’s case is that the circular does not create an invalidity but regulates the manner in which the authority’s own power is to be exercised, so a communication issued outside it is not an exercise of that power at all; the Revenue’s answer is that a circular binds the Department and not the statute, and that nothing in section 282A makes the number a condition of a valid notice. Against section 292B the assessee’s case is that a communication the Board directs shall be deemed never to have been issued is not a notice with a defect in it, and that section 292B presupposes something in existence to save; the Revenue’s answer is that section 292B reaches any mistake, defect or omission and is not confined to quoting, so it is wider than the amendment and meets the point directly.

The dates decide which circular the argument is made under. Circular No. 19/2019 governed communications issued from 1 October 2019, and the Board withdrew it with effect from 31 March 2026, when Circular No. 4/2026 took its place. The replacement does not carry the consequence forward. It requires referencing by a Document Identification Number, lists the exceptional situations, and requires post facto approval within fifteen days of issue with a System upload inside fifteen working days for three of them, but it contains nothing answering to paragraph 4 of the earlier circular. So the deeming is available for a communication issued between 1 October 2019 and 30 March 2026, and for anything issued on or after 31 March 2026 the argument has to be put on section 282A and on the statute rather than on the circular.

Take the objection early, in a separate letter. The proviso to section 292BB disapplies the section where the assessee raised “such objection” before the completion of the assessment or reassessment. The Revenue’s position is that it must be the same objection, specific and identifiable, so a general reservation of rights or a line inside a reply on the merits will not do. The cheapest insurance is a letter with its own subject line and an acknowledgment.

But the point is not lost by being taken late. The Gujarat High Court in Mahi Valley held at paragraph 3 that the objection is a pure question of law which the assessee can raise at any stage, and allowed it before the Commissioner (Appeals) for the first time. The Ahmedabad Bench in Mahesh P. Gandhi entertained it after condoning a delay of about 2,337 days. Orissa Mining Corporation paragraph 17 now adds that participation does not confer jurisdiction, which is the strongest answer to a waiver argument there has been.

But an objection to the officer’s jurisdiction is a different objection, and section 124(3) times it out. The rule that the point may be taken at any stage belongs to non-issuance of a section 143(2) notice. It does not belong to a complaint that the officer who made the assessment had no jurisdiction over the assessee, which section 124 bars by reference to the very notices this note is about. Where the assessee has made a return under section 139(1), clause (a) of section 124(3) shuts out a challenge to the Assessing Officer’s jurisdiction after the expiry of one month from the date on which he was served with a notice under section 142(1) or section 143(2), or after the completion of the assessment, whichever is earlier. Where no return has been made, clause (b) runs the window to the expiry of the time allowed by the notice under section 142(1) or section 148, or of the time allowed by the show cause notice under the first proviso to section 144, whichever is earlier; the opening words, “after the expiry of the time allowed by”, govern both limbs, so it is the expiry of that notice and not its issue that closes the window. Section 124(4), which is itself expressly subject to sub-section (3), then requires the Assessing Officer, where he is not satisfied that the claim is correct, to refer the question for determination under section 124(2), which puts it to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, and to the Board where officers in different charges do not agree, and to do so before the assessment is made. Because sub-section (4) is subject to sub-section (3), the reference machinery goes with the objection: once the one month has run there is nothing left to refer. The consequence for pleading is that the two objections have to be kept apart. Non-issuance of the scrutiny notice is not caught by section 124(3) at all, because it is not a claim that the officer lacked jurisdiction over the assessee; a claim that the wrong officer assessed has to be made inside the one month, and taken for the first time in appeal it will meet section 124(3) rather than Mahi Valley.

What has not been worked out by any court is how those two propositions fit together: an objection that is a pure question of law raisable at any stage, in a statute whose curative provision is disapplied only where the objection came before completion. On the Revenue’s reading, an assessee who says nothing until the Tribunal has not triggered the proviso and the deeming stands. On the assessee’s reading, there is nothing for the deeming to operate on where no notice was issued, so the proviso never needs to be reached. Orissa Mining Corporation supports the second, and paragraph 16 is the reason: where the Revenue itself says no notice was sent, section 292BB “will have no applicability”, full stop, without reference to when anyone objected.

What follows from the defect

The orthodox consequence is annulment, not remand, and the language of the authorities is consistent. Hotel Blue Moon paragraph 15: not a procedural irregularity and not curable. Mahi Valley paragraph 6: will invalidate the whole proceeding. Nirali: no error in annulling the proceedings. Shree Nilkanth Quarry Works paragraph 10: “in absence of notice under section 143(2) of the Act, there is no assessment order”. Orissa Mining Corporation paragraph 22: a later letter “would not validate what is non est”.

Three consequences follow downstream and should be pleaded in the same breath.

Penalty goes with the assessment. In Chirag Ishwarbhai Patel the Bench quashed the penalty under section 271(1)(c) once the assessment fell, in the companion appeal, without further argument.

A revision under section 263 does not lie. Shree Nilkanth Quarry Works holds that a revision of an order that is non est does not arise. That is a useful shield where the Commissioner moves under section 263 against an assessment the assessee is separately attacking.

But the Revenue is not necessarily out of time. What the Supreme Court has never addressed is whether, limitation permitting, a fresh notice could issue and the proceeding resume. The older line treated the defect as an irregularity curable by remand: Areva T&D remanded with a direction to issue the notice, and Ram Narain Bansal remanded on the merits. Neither survives as authority on curability, but neither has been expressly overruled on the question of relief. The sub-section to read is sub-section (3) of section 153. It operates notwithstanding the ordinary limits in sub-sections (1) and (2) and allows an order of fresh assessment in pursuance of an order under section 254, section 263 or section 264 setting aside or cancelling an assessment. The period runs from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, or in which the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner. It is nine months, and twelve months where the order under section 254 is received, or the order under section 263 or section 264 is passed, on or after 1 April 2019. Two extensions sit alongside it and should be checked before the limitation position is treated as settled: a further twelve months where a reference is made to the Transfer Pricing Officer, and, from 1 April 2023, where an assessment was pending when a search was initiated or a requisition made.

Whether an annulment is a “setting aside or cancelling” within that sub-section is open, and it is what decides whether a win is final. For the assessee: the premise of the ground is that there never was an assessment, so there is nothing to set aside and nothing to cancel, and a sub-section that presupposes an assessment capable of being cancelled cannot be engaged by an order holding that none was ever made; on that reading the Department is thrown back on the ordinary limitation in section 153(1), or on a fresh notice under section 148 with its own limit under section 149. For the Revenue: the sub-section is engaged by the form of the appellate order and not by its theory, the word “cancelling” is wide enough to take in an order holding the assessment bad in law, and section 254(1) empowers the Tribunal to pass such orders thereon as it thinks fit, which has always been read as including an order setting the assessment aside and restoring the matter, so the Revenue’s course is to invite an order in that form and then take the fresh period. The practical step follows from the question rather than from its answer: ask for annulment in the prayer, in terms.

A second round raises the same question in another form. Where the assessment is set aside rather than annulled, the Revenue’s case is that the original notices under section 148 and section 143(2) stand, because what was set aside was the assessment and not the notices that founded it, so the fresh assessment continues the same proceeding and no further section 143(2) notice is called for; the assessee’s case is that an assessment framed without the notice cannot be cured by continuing the proceeding, so the officer has to issue one in the second round and has to be in time to do it. Where the assessment is annulled, the positions move in the assessee’s favour, because if the order was non est there was no proceeding to continue and nothing to restore; but the Revenue’s answer is that an annulment disposes of the order and not of the section 148 notice, which remains a validly issued notice on which a fresh assessment can be framed if section 153 or section 149 leaves the time.

The Income-tax Act, 2025

The Income-tax Act, 2025 comes into force on 1 April 2026, by section 1(3). It does not disturb anything above for the files now in hand, and that is the first thing to say.

Section 536(2)(c) provides that the repealed Act continues to apply to any proceeding pending at commencement and to any proceeding initiated on or after 1 April 2026, “(including notices, assessment, reassessment, recomputation, rectification, penalty, reference, revision and appeals)”, in respect of any tax year beginning before 1 April 2026, and that such proceedings “shall be carried out as per the procedure specified in the repealed Income-tax Act”. So for assessment year 2026-27 and earlier, section 143(2), its proviso, section 144, section 158BC and section 292BB of the 1961 Act continue to govern, procedure included, including for a reassessment notice issued in 2027. Section 536(2)(v) separately keeps every search initiated under section 132, and every requisition under section 132A, made before commencement, under the 1961 Act “as if this Act has not been enacted”.

For tax year 2026-27 onwards the architecture is this.

The scrutiny notice becomes section 270(8), and the time limit and the serve or issue split come with it. Section 270 is headed “Assessment”. Sub-section (8) applies where a return has been furnished under section 263 or in response to a notice under section 268(1), and requires the Assessing Officer or the prescribed income-tax authority, considering it necessary or expedient to ensure that the assessee has not understated the income, has not computed excessive loss or has not under-paid the tax, to “serve on the assessee a notice”. The three grounds are broken out as clauses (a) to (c) and the two alternatives as (i) and (ii), but the substance is the 1961 sub-section and the verb is still “serve”. The time limit moves out of a proviso and into a free-standing sub-section (9), which provides that no notice under sub-section (8) shall be served after the expiry of three months from the end of the financial year in which the return is furnished; the period and the verb are identical to the 1961 proviso, and the 2025 Act does not switch to its defined term “tax year” here. That structural change matters for one kind of argument, because Mahi Valley’s reasoning rests on the proviso being framed in negative terms as a condition attached to the power, and under the 2025 Act it is an independent prohibition; the negative framing survives, so the argument survives, but it has to be recast. The asymmetry on which the whole of this jurisprudence turns survives as well, word for word: section 270(8) says “serve”, section 270(9) says “served”, and section 270(10), the assessment sub-section, says “the notice issued under sub-section (8)”.

Section 292BB becomes section 523, in Chapter XXIII, headed “Notice deemed to be valid in certain circumstances”. Sub-section (1) carries the same deeming and the same three limbs, (a) not served upon him, (b) not served upon him in time, (c) served in an improper manner. The proviso is recast as sub-section (2), so “the proviso to section 523” is a wrong reference. The deeming still reaches only service, so Laxman Das Khandelwal and Orissa Mining Corporation carry across unchanged.

Section 292B is widened, and that is the development to watch. It becomes section 522, headed “Circumstances in which return of income, assessment, approvals, etc., not to be invalid”, and it consolidates three 1961 provisions into one. It keeps the section 292B rule that a return, assessment, notice, summons or other proceeding is not invalid for a mistake, defect or omission if it is in substance and effect in conformity with the intent and purpose of the Act. It adds that an assessment is not invalid for an error in quoting a computer-generated Document Identification Number provided the order refers to it. And it provides that approvals by income-tax authorities for assessment, reassessment or recomputation are administrative and supervisory, and are not invalid because the recorded reasons are insufficient or because of defects in form, authentication or communication, including approvals granted electronically without a digital signature. A “void for want of notice or sanction” argument under the 2025 Act therefore has to clear section 522 as well as section 523, and the curative apparatus is materially wider than section 292B alone ever was.

Best judgment becomes section 271, whose clause (1)(c) preserves the link: a person who, having filed a return, fails to comply with all the terms of a notice under section 270(8). The 1961 proviso and its exception become sub-sections (2) and (3).

Sections 153A and 153C have no counterpart at all. The 2025 Act abandons that regime and returns to block assessment, at sections 292 to 295 inside Chapter XVI. Section 292 is “Assessment of total undisclosed income as a result of search”, section 293 is the computation provision, section 294 is “Procedure for block assessment” and section 295 is “Undisclosed income of any other person”. Section 292(1) applies only where the search or requisition is on or after the commencement of the Act.

And section 294 settles the search question in terms. Clause (1)(a) requires the Assessing Officer to issue a notice calling for a block return within a period not exceeding sixty days, and sub-clause (i) provides that the return is treated as if furnished under section 263 and “thereafter notice under section 270(8) shall be issued”. Clause (1)(b) separately applies sections 268, 270(8), 270(10), 271, 276, 277 and 278 “so far as may be”. Sub-section (2) switches off section 270(1) for a block return, and sub-section (3) requires prior approval of an Additional or Joint Commissioner or Director. Section 295(1) routes the other person into section 294, so the scrutiny notice is mandatory in that case too. The reasoning in Ashok Chaddha, that no provision requires the notice in a search assessment, has no application to a search initiated on or after 1 April 2026.

One asymmetry is carried over from the 1961 substituted text and deserves notice: section 294(1)(a)(i) says the section 270(8) notice “shall be issued”, while section 270(8) and (9) command service and fix a service deadline.

Open questions

Each of these is genuinely open. Where we would take a position on a live file, it is stated.

1. Does Orissa Mining Corporation reach a section 153A assessment? For the assessee: the Supreme Court has now held, in its own voice, that a section 142(1) questionnaire is not compliance and that participation does not confer jurisdiction, and those are precisely the two planks of Ashok Chaddha paragraph 14 and B. Kubendran paragraph 23. For the Revenue: the decision construes section 147 and reasons from a section 158BC case, and the answer on section 153A was never textual about participation in the first place; it was that no provision prescribes the notice, and that remains true of section 153A whatever the Supreme Court says about reassessment. Shaily Juneja, a Delhi decision, itself treats the two schemes as different. Our view: the point is arguable but we would not advise an assessee to rest a section 153A appeal on it. Orissa Mining Corporation weakens the sufficiency reasoning in the section 153A line without touching its textual core.

2. Section 153C: which High Court is right? For the assessee: the Bombay High Court’s holding in Ashok Commercial Enterprises paragraph 17(e) is operative and reasoned, and section 153C has no notice of its own, borrowing section 153A’s, so the “the section prescribes its own notice” reasoning fits less well. For the Revenue: the Bombay Court adopted Hotel Blue Moon in a single step without confronting the absence of an incorporating clause, which is the whole basis of the contrary line, and the Kerala and Madras decisions addressed that question directly. Our view: outside Delhi, Madras and Kerala the point should be taken, with Vegetable Products as the tie-breaker, which is the route the Raipur Bench took on 25 September 2026. In Gujarat there is no jurisdictional decision either way, so the route is open.

3. Can section 292BB save a notice served out of time? For the assessee: the proviso to section 143(2) is a negative bar on the power, and Mahi Valley paragraph 6 treats it as mandatory, so there is no power for a deeming about service to validate. For the Revenue: limb (b) of section 292BB is “not served upon him in time”, which is this case in terms, and a late notice has “emanated from the department” so the complete-absence carve-out does not reach it. No court has held either way; Alpine Electronics decided it through the proviso. Our view: the Revenue’s textual point on limb (b) is better than the assessee’s side usually admits, which is why the objection should go on the record before completion and the argument avoided.

4. Annulment or remand? For the assessee: the orders are non est, so there is nothing to remand, and Shree Nilkanth Quarry Works says so; and the relief is one Parliament has named, because section 251(1)(a) lets the Commissioner (Appeals), in an appeal against an order of assessment, confirm, reduce, enhance or annul the assessment. For the Revenue: validity and relief are different questions, and a holding that the assessment cannot stand says nothing about what the appellate authority should then do; section 254(1) empowers the Tribunal to pass such orders thereon as it thinks fit, which has always been read as including an order setting the assessment aside and restoring the matter to the Assessing Officer; section 153(3) then supplies a fresh period running from the receipt of that order; and the power to annul says nothing about when it should be exercised, so section 251(1)(a) settles the availability of the relief and not the choice between annulling and setting aside. The older authorities remanded. Not resolved. Our view: ask for annulment in the prayer, in terms, and resist a consent order that merely sets the assessment aside.

5. How the “raise it at any stage” rule fits the section 292BB proviso. For the assessee: where no notice issued, section 292BB has no applicability at all (Orissa Mining Corporation paragraph 16), so the proviso and its timing are beside the point. For the Revenue: the proviso is how Parliament chose to regulate late objections, and reading it out of the section for one class of case makes it surplusage. Not worked out by any court.

6. What counts as “complete absence” of a notice? The formula is clean but the middle ground is not. A notice issued late, issued by an officer without authority, or allowing a compliance window of days is treated as fatal in some orders and as a service defect in others. For the assessee: Laxman Das Khandelwal requires that the notice have “emanated from the department”, and to emanate is to go out, so a notice that was never despatched, a notice the Board’s circular deems never to have been issued, and a notice from an officer with no jurisdiction over the assessee are absences rather than defects, and section 292BB has nothing to deem. For the Revenue, and the point is stronger than the assessee’s side usually allows: “emanated from the department” is a test of origin and nothing more, so a notice that was generated, entered in the order sheet or handed to the despatch section has emanated, whatever became of it afterwards; and once that is so, every remaining complaint is that it was not served, or not served in time, or served in an improper manner, which are the three limbs of section 292BB and are drafted for exactly those cases. Our view: plead the facts and let the characterisation follow; do not open on a bright line the authorities do not support. On a contested record the realistic case is not the characterisation but the Department’s evidentiary burden, because it has to produce the notice, the despatch record or the order sheet entry, and Chirag Ishwarbhai Patel and Mahesh P. Gandhi show what happens where it produces none of them.

7. Does Hotel Blue Moon’s own carve-out survive the new section 158BC? For the Revenue: the Supreme Court itself said that where the returned undisclosed income is accepted there is no reason for a notice, and that reasoning is unaffected by a proviso that assumes an assessment under section 143(3). For the assessee: the proviso is unqualified and sub-section (2) switches off section 143(1), so Parliament has left no route by which a block return is simply accepted. Undecided, and the first real battleground in the new regime.

8. Does section 523 of the 2025 Act reach a recomputation? Section 523 is confined to “an assessment or reassessment” and nowhere says “recomputation”, while the 2025 reassessment sections use the three-fold formula throughout, including section 280(1)(a) and the heading of section 286. The same gap exists in section 292BB, but Parliament has now used both formulas in the same Act, which makes the omission harder to call accidental. The Revenue’s answer is that “assessment” is used inclusively throughout the 2025 Act, so a recomputation is a species of assessment and not a third thing; that the identical gap has sat in section 292BB since 2008 without a single decision treating it as significant, which is thin evidence of a drafting intention; and that section 522 sits alongside section 523 in any event, so an assessee who gets past the deeming has still to clear the curative provision. Untested.

9. Does a system-generated and unsigned notice from the National Faceless Assessment Centre satisfy section 143(2)? For the Revenue: the faceless scheme routes the notice through the Centre, and the Revenue’s case is that a notice generated and authenticated in the manner the scheme prescribes is a notice validly issued by the prescribed income-tax authority, so neither the absence of a manuscript signature nor the absence of a named rank is a defect in issue at all. For the assessee: the Board’s own circular deemed a communication carrying no computer-generated Document Identification Number never to have been issued, which is an absence of the notice and not a defect in its service, and section 292BA of the 1961 Act and section 522 of the 2025 Act meet only an error in quoting the number. The Bombay High Court in Ashok Commercial Enterprises treated a missing Document Identification Number as a separate and independent ground at its paragraph 18 rather than as a section 143(2) point, so even that decision does not answer the question. No decision in this line has answered it either way.

On a live file

1. Identify the regime before anything else: scrutiny under section 143(3), reassessment under section 147, section 153A or 153C (search up to 31 March 2021), the reassessment machinery (search between 1 April 2021 and 31 August 2024), or block assessment under Chapter XIV-B (search from 1 September 2024). The answer to the section 143(2) question is different in each.
2. Ask the Assessing Officer in writing, early, for the notice under section 143(2), the dispatch record and the relevant pages of the order sheet. Keep the acknowledgment.
3. Test the notice itself before testing its service. Check the designation and the jurisdiction of the authority that issued it, whether it carries a computer-generated Document Identification Number, whether it is signed or digitally signed, the length of the compliance window it allows, and whether the entity it names was in existence on the date it issued.
4. Establish what return went into the proceeding and how: a fresh return, a letter adopting the earlier one, or nothing. Date it. The whole of the no-return exception turns on this.
5. Check the date of service against the proviso, computing three months from the end of the financial year in which the return was furnished, and, where service was up to 31 March 2021, the period the proviso carried at that time, six months in the later years and twelve months in the earlier ones.
6. Decide whether the complaint is non-issuance or defective service, and plead them in that order and in the alternative. They are proved from different documents.
7. Put the objection on the record before the assessment is completed, in a separate letter with its own subject line, so that the proviso to section 292BB removes that section from the case.
8. Do not rely on the proviso alone. It removes the deeming; it does not prove the defect. The facts of service still have to be made out, and section 292B has no proviso and survives an early objection.
9. In a search case from 1 September 2024, check compliance with the first proviso to section 158BC(1)(a) and call for the section 158BC(3) prior approval, confirming it preceded the notice.
10. In a section 153A or section 153C file, call for the approval under section 153D and the satisfaction note, and in a section 153C file the record of the handing over of the material to the Assessing Officer having jurisdiction over the other person. That is where such a file is ordinarily won.
11. Where the ground succeeds, take the consequential points in the same appeal: the penalty, and the answer to any revision under section 263.
12. On a second round after a remand, identify which notice the fresh assessment rests on, and whether a notice under section 143(2) issued in the second round at all.
13. Before treating the matter as closed, check the limitation position under section 153(3), because no court has decided that a fresh notice is barred.

Concordance: the 1961 Act and the Income-tax Act, 2025

Subject	Income-tax Act, 1961	Income-tax Act, 2025
Inquiry before assessment	s.142	s.268
Assessment	s.143	s.270
The scrutiny notice	s.143(2)	s.270(8)
Time limit for the scrutiny notice	proviso to s.143(2)	s.270(9)
Assessment order on scrutiny	s.143(3)	s.270(10)
Best judgment assessment	s.144	s.271
Faceless assessment	s.144B	s.273
Income escaping assessment	s.147	s.279
Issue of notice where income has escaped assessment	s.148	s.280
Procedure before issuance of notice	s.148A	s.281
Time limit for notice	s.149	s.282
Sanction for issue of notice	s.151	s.284
Time limit for completion of assessment	s.153	s.286
Assessment of undisclosed income after search	s.158BA	s.292
Computation of undisclosed income of the block period	s.158BB	s.293
Procedure for block assessment	s.158BC	s.294
Undisclosed income of any other person	s.158BD	s.295
Orders of the Appellate Tribunal	s.254	s.363
Revision by the Commissioner	s.263	s.377
Return of income	s.139	s.263
Mistake, defect or omission not to invalidate	s.292B	s.522
Notice deemed to be valid in certain circumstances	s.292BB	s.523
Repeal and savings	n/a	s.536

Two numerals do double duty and should be read with care. Section 263 of the 1961 Act is revision by the Commissioner, while section 263 of the 2025 Act is the return of income; section 271 of the 1961 Act is penalty for concealment, while section 271 of the 2025 Act is best judgment assessment. Every reference in this note is to the 1961 Act unless the Income-tax Act, 2025 is named.

Sections 153A and 153C have no counterpart in the Income-tax Act, 2025: search assessments return to the block assessment scheme at sections 292 to 295, which applies to searches initiated on or after 1 April 2026.

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This note states the law as at 31 October 2026. It is a general commentary and not advice on any particular file. Sunil Maloo & Co., Chartered Accountants, Ahmedabad.

This note is general commentary on the law as at 31 October 2026 and is not advice on any matter. The position in a particular case depends on its own facts.