Section 143(2)

What a section 143(2) notice is

Scrutiny. Your return has been picked for detailed examination. It is a high-severity notice in the assessment family under the Income Tax Act 1961.

If you ignore it: Assessment may be completed ex-parte u/s 144 on best judgment.

Time to reply: this notice type carries no standard period. The date is printed on the notice itself and you must read it off the document. Always read the date off the notice. Never assume a default here.

Under the Income Tax Act 2025: section 270(8). But read that as reference, not as the provision to cite. Under s.536(2) of the 2025 Act, a proceeding for any tax year beginning before 1 April 2026 stays under the Income Tax Act 1961 from the notice through to the appeal — so a notice arriving today for an earlier year is a 1961 Act matter, whatever today's date is.

Section 143(2) — the law in short

What the courts have decided on section 143(2), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• DIT v Mitsubishi Corporation Supreme CourtCuts both ways
  My Indian payer did not deduct tax at source and paid me gross. The Assessing Officer says I should have paid advance tax and has charged s.234B interest. Which years can he do that for?
  Only from financial year 2012-13 onwards. The Supreme Court held that for every assessment up to and including financial year 2011-12, s.209(1)(d) entitled the assessee to reduce, in computing its advance tax, the income-tax that WOULD BE deductible at source, even though it had in fact received the full amount without deduction — so no s.234B interest could be charged. The proviso to s.209(1)(d) inserted by the Finance Act 2012 with effect from 1 April 2012 reverses that, and from financial year 2012-13 the assessee cannot reduce tax that the payer failed to deduct.
• Vodafone Idea Ltd v ACIT Supreme CourtHelps departmentSuperseded by amendment
  My refund is being held back because scrutiny is pending. Can the officer simply sit on it?
  Not for AYs 2017-18 to 2022-23 without doing the statutory paperwork first. Section 241A required the Assessing Officer to separately record satisfaction that granting the refund would adversely affect the revenue, and to obtain the PCIT's previous approval with reasons in writing. On these facts the Court found that those steps had been taken — satisfaction recorded, approval obtained, order passed in time — so the withholding was upheld and the appeal was dismissed; the ₹733 crores the Court directed flowed from the final assessment order under s.143(3) for AY 2014-15, not from any failure under s.241A, and even that direction was made subject to any proceedings the Revenue might initiate, including set-off under s.245. For years before AY 2017-18 s.143(1D) governed, and issue of a s.143(2) notice was itself enough to hold back the refund until assessment was complete. Section 241A ceased to apply from 1 April 2023 (Finance Act 2023); for AY 2023-24 onwards the equivalent power, in the same terms, is s.245(2).
• Dalmia Power Ltd v ACIT Supreme CourtHelps taxpayer
  Our amalgamation was sanctioned long after the deadline for a revised return. Must the department accept revised returns filed to give effect to the scheme?
  Yes. The Supreme Court held that the department must receive the revised returns for assessment year 2016-17 and complete the assessment taking the sanctioned schemes into account. Section 139(5) did not apply, because the returns were not revised on account of an omission or wrong statement but because of the time taken to obtain the NCLT's sanction, and it was an impossibility to file them by the due date. Section 119(2)(b) and the Board's circular on condonation do not apply where the assessee has restructured with the prior approval of the NCLT and the department raised no objection. Section 170(1) required the successor to be assessed accordingly.
• PCIT v I-Ven Interactive Ltd Supreme CourtHelps department
  I moved my registered office and put the new address on my return and in Form 18 with the Registrar of Companies. The scrutiny notice went to the old address. Is the assessment bad?
  No. The Supreme Court held that a notice under section 143(2) sent within the prescribed time to the address in the PAN database is sufficient compliance, and actual service afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely showing the new address in the return is not enough. The assessee must apply to have the PAN database changed, because scrutiny notices are generated by an automated system that picks the address from PAN. The appeal was allowed and the matter remanded to the CIT (Appeals) to decide the other grounds on merits.
• CIT v Laxman Das Khandelwal Supreme CourtHelps taxpayer
  No s.143(2) notice was issued at all. Does s.292BB save the assessment?
  No. The notice is a jurisdictional requirement and its complete absence makes the assessment void. Section 292BB is a fiction about service — for it to apply, the notice must have emanated from the department in the first place.
• PCIT v Maruti Suzuki India Ltd Supreme CourtHelps taxpayer
  The notice names a company that has already merged into another. Does taking part in the proceedings fix that?
  No. Once a company amalgamates it ceases to exist, so a notice in its name is a jurisdictional illegality, not a clerical slip. Section 292BB cures defects in service — it cannot supply jurisdiction, and participation is not an estoppel.
• CIT v Tasgaon Taluka S.S.K. Ltd Supreme CourtCuts both ways
  The Assessing Officer has disallowed the whole difference between the statutory minimum cane price and the State advised price my sugar co-operative paid its members. Can he?
  No — not the whole difference. The Supreme Court held that only that component of the final or additional cane price fixed under Clause 5A of the Sugarcane (Control) Order 1966 which represents profit is an appropriation of profit; the rest is deductible expenditure. The Assessing Officer must actually do the exercise of identifying the profit component from the accounts and the material supplied to the State Government, and all the orders below were set aside and the matters remitted for that purpose.
• ITO v Dharam Narain Supreme CourtHelps department
  The scrutiny notice was posted in time but the postman could not find me; it was handed to my representative instead. Can I say it was never served and the assessment is invalid?
  Not on these facts. The Supreme Court set aside the Allahabad High Court's order quashing a section 143(2) notice. The notice was issued on 16 October 2006 and despatched by registered post on 18 October, the last date for service being 30 October. It could not be served twice because the assessee was not available, and was served on 19 October on his authorised representative, whom he later disowned. That was enough to draw an inference of deemed service and sufficient compliance with section 143(2). The Court expressly left open, for an appropriate case, the larger question whether the provision requires service or only issue.
• GKN Driveshafts (India) Ltd v ITO Supreme CourtCuts both waysSuperseded by amendment
  You get a s.148 notice. Can you ask why — and must the officer answer?
  Yes. Ask for the reasons in writing. The officer has to give them, and then has to deal with your objections in a reasoned order before going ahead with the reassessment.
• ACIT v Hotel Blue Moon Supreme CourtCuts both ways
  Is a notice under s.143(2) a jurisdictional precondition, or merely a procedural step the Assessing Officer can skip?
  The Revenue argued that in a block assessment under Chapter XIV-B the words 'so far as may be' in s.158BC(b) made the s.143(2) notice optional. The Supreme Court rejected this and held that where the Assessing Officer repudiates the return and proceeds to enquire, the s.143(2) notice must be issued within the prescribed time. Omission to issue it is not a curable procedural irregularity.
• BVR Projects v Assessment Unit High CourtHelps taxpayerValidity unconfirmed
  The faceless show-cause notice gave me four days to reply. Is that enough time?
  No. The CBDT's Standard Operating Procedure of 3 August 2022 for faceless assessment requires seven days to answer a show-cause notice. A notice issued on a Saturday with a deadline at 1.02 p.m. the following Friday gave four working days to respond to a proposed addition of over Rs. 5.22 crores, and the assessment order was set aside on that ground alone.
• Benteler Automotive India Pvt Ltd v Union of India High CourtHelps taxpayerValidity unconfirmed
  The DRP issued its directions years ago and the Assessing Officer has still not passed a final assessment order. Is the assessment now dead, or can he pass one whenever he likes?
  It is dead. Section 144C(13) requires the Assessing Officer, on receipt of the DRP's directions under s.144C(5), to complete the assessment in conformity with them within one month from the end of the month in which the directions are received, and he need not give any further hearing. Where that month passed — here even after the extension of the outer date under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020 — and no order was passed, the Bombay High Court held the assessment barred by limitation and quashed the pending proceedings on the assessee's writ petition.
• Mohammed Kaleem Ullah v Principal Chief Commissioner of Income Tax High CourtHelps departmentValidity unconfirmed
  My client's return has been picked up for scrutiny and he now wants to put things right by filing an updated return. Can he still do it?
  No. The Telangana High Court held that clause (b) of the third proviso to s.139(8A) means what it says: no updated return may be furnished for an assessment year where any proceeding for assessment, reassessment, recomputation or revision is pending or has been completed for that year in the assessee's case. The petitioner's case had been selected for scrutiny under CASS by a notice under s.143(2), so the Assessing Officer was right to reject his request to file an updated return, and the writ petition against the assessment order was dismissed with liberty to pursue the appeal.
• AMNS Gandhidham Ltd v ACIT High CourtHelps taxpayerValidity unconfirmed
  My client took over a company through an IBC resolution plan. The assessing officer has begun assessments for years before the takeover and says he will examine whether the brought forward losses survive the change in shareholding. Can he?
  On these facts, no. Where the resolution professional gave the jurisdictional Principal Commissioner the opportunity of being heard that s.79(2)(c) requires and the Principal Commissioner made no submissions before or at the approval of the resolution plan, the Bombay High Court held that the Revenue could not afterwards reopen the allowability of the carried forward losses, and quashed assessment proceedings relating to a period before the plan's implementation date.
• Columbia Global Center in India v ITO (Exemptions), Ward-1(2), Mumbai High CourtHelps taxpayerValidity unconfirmed
  My trust filed Form 10 only after the scrutiny notice came — 338 days after the due date. The Commissioner refused to condone under s.119(2)(b). Is that the end of the accumulation claim?
  No. Where the substantive conditions of s.11(2) are met — the accumulation is disclosed in the return, the Board resolution and the Form 10B audit report before the s.139(1) due date, the money is invested in a s.11(5) mode and is actually applied within the permitted period — the Bombay High Court held that a liberal view must be taken and the delay in filing Form 10 condoned. The refusal order under s.119(2)(b) was quashed and the delay condoned by the Court itself.
• CIT (International Taxation) v Oracle Systems Corporation High CourtHelps taxpayerValidity unconfirmed
  No s.143(2) notice was ever issued. Does s.292BB save the assessment because you took part?
  No. Failure to issue a s.143(2) notice is a fatal procedural defect. Section 292BB deals with an assessee who participated being precluded from objecting to service — it cannot cure the non-issuance of the notice itself.
• AMNS Khopoli Ltd v ACIT High CourtHelps taxpayerValidity unconfirmed
  Our company came out of the NCLT under an approved resolution plan. The department now says it will not recover anything but wants to complete the assessment for an earlier year to build a case against the old promoters. Can it?
  No. Once the resolution plan is approved, claims that are not part of it stand extinguished and no proceedings in respect of them may be initiated or continued for any period before the effective date - and that covers the assessment itself, not merely recovery. The Bombay High Court quashed notices under s.143(2) and s.142(1) even though the Revenue had accepted on the record that it would not enforce any resulting demand.
• PCIT v Jai Maa Jagdamba Flour Private Limited High CourtHelps taxpayerValidity unconfirmed
  After a search on or after 1 July 2012, can the officer levy penalty under s.271(1)(c) instead of s.271AAB?
  No, not for the specified previous year. The Jharkhand High Court held that s.271AAB opens with a non obstante clause and excludes s.271(1)(c) where the undisclosed income relates to the specified previous year. Where the search was on 3 September 2014 the penalty, if any, had to be levied under s.271AAB, and because the assessee had admitted nothing in a s.132(4) statement and paid no tax on admitted income, the case fell under clause (c) of s.271AAB(1). The penalty actually levied under s.271(1)(c) could not stand. The Court also held it immaterial that no incriminating document had been found, because the statute keys the choice of section to the date of the search.
• Virdichand Bawandas HUF v National e-Assessment Centre High CourtHelps taxpayer
  You asked for time to reply to the draft order and were refused. Is the final order safe?
  No. The scheme requires an opportunity to respond to the modifications proposed in the draft order. Refusing time and then finalising was held wrong, and the assessment and the penalty notice were set aside.
• Symphony Limited v ACIT High CourtHelps taxpayerValidity unconfirmed
  The faceless unit finalised your assessment without issuing a draft order. Is that order good?
  No. Under s.144B, a show cause notice issued along with the draft assessment order is a sine qua non. Without it the final order was passed without jurisdiction and was quashed.
• Sanjay Aggarwal v National Faceless Assessment Centre High CourtHelps taxpayerValidity unconfirmed
  You asked for a personal hearing and the faceless unit ignored it. Does 'may' mean they can?
  No. Section 144B(7) uses 'may', but that usage cannot absolve the Revenue of the obligation to consider a request for a personal hearing. The assessment order was set aside.
• GE Capital Mauritius Overseas Investments v DCIT High CourtHelps departmentSuperseded by amendment
  The s.241A order gives detailed reasons I say are legally wrong. Will the High Court quash it in a writ?
  Usually not. The Delhi High Court dismissed this petition, holding that in a challenge to a s.241A order the writ court will not determine the tax liability that the pending scrutiny is meant to determine. Its scrutiny is confined to whether there is any basis at all for the opinion that granting the refund would adversely affect the revenue; only in a gross case, where nothing at all controverts the return, will it quash the order. The year was AY 2018-19 and the provision was s.241A, which ceased to apply from 1 April 2023; for AY 2023-24 onwards the withholding power is s.245(2), and this reasoning about the limits of writ review reads across to an order under that provision.
• Vrinda Sharad Bal v ITO High CourtHelps taxpayerValidity unconfirmed
  CPC keeps adjusting my refunds against a demand that is under appeal, and says the Centralised Processing Scheme requires it. Does that scheme override the CBDT's stay instructions?
  No. Clause 10 of the Centralised Processing of Return of Income Scheme, 2011 cannot be read in isolation; the power to set off a refund against an outstanding demand is circumscribed by the provisions of the Act and by the CBDT's subsisting instructions, circulars and office memoranda. The Court restrained recovery beyond what those instructions permit and directed that the excess already recovered be returned with interest, and that refunds not be adjusted until the appeal is decided.
• Trust for Reaching the Unreached v CIT High CourtHelps taxpayer
  Our audit report was not e-filed with the return and exemption was denied. Can the delay be condoned?
  Yes. The requirement to furnish the audit report with the return is procedural and directory, so exemption under ss.11 and 12 cannot be refused merely for late filing. The Commissioner's refusal to condone was set aside because the s.119(2)(b) discretion must be exercised equitably and judiciously, not on an exclusively pro-revenue view.
• Jayesh T Kotak v DCIT High CourtHelps taxpayerValidity unconfirmed
  A company in which my client holds shares lent money to two other companies in which he also holds shares. He received nothing. Can the reassessment stand?
  No, on these reasons. The Gujarat High Court quashed a s.148 notice issued more than four years after the assessment year, holding that where the reasons recorded show only that the lender advanced unsecured loans to sister concerns, and contain no information that the payment was made for the benefit of the petitioner, no obligation lay on him to disclose those transactions. Without a finding that income had accrued to him, the first proviso to s.147 was not satisfied.
• Kunal Structure (India) Pvt Ltd v Dy CIT High CourtHelps taxpayer
  My return was defective and I cured the defect ten months later. Does the s.143(2) clock run from the original filing or from the day I removed the defect?
  From the original filing. Where the defect is removed within the time the Assessing Officer allowed, the return relates back to the date on which it was originally furnished, and the six-month limitation for a s.143(2) notice is counted from the end of the financial year in which that original return was filed. On the facts the scrutiny notice was issued nearly a year after that period had run out and was held barred. The Revenue's special leave petition was dismissed.
• Maple Logistics P Ltd v Pr Chief CIT High CourtHelps taxpayerSuperseded by amendment
  My refund is being withheld under s.241A because my case is in scrutiny. Is a scrutiny notice enough?
  No — but fix the year first. For AYs 2017-18 to 2022-23 the return had to be processed and the refund determined, and s.241A was the only route to hold it back: it needed a written, reasoned, approved order showing why paying THIS refund was likely to hurt the revenue, and repeating the words of the section, or pointing to the s.143(2) notice, is not a reason. Section 241A ceased to apply from 1 April 2023 (Finance Act 2023) and the withholding power now sits in s.245(2), which requires the same written reasons and the same previous approval of the Principal Commissioner or Commissioner. The reasoning below transfers, but for AY 2023-24 onwards the order to demand, and to attack, is a s.245(2) order.
• PCIT v Ritu Singal High CourtHelps departmentValidity unconfirmed
  I told the search party the money was my unaccounted income. Is that enough to escape s.271AAA penalty?
  No, not by itself. The Delhi High Court held that all three conditions in s.271AAA(2) must be fulfilled before the escape route opens. The assessee had said the amounts advanced were her unaccounted income for the year, but did not specify how she had derived that income or what head it fell under - rent, capital gain, professional income, business income out of money lending, or the source of the money. Unless such facts are given with some specificity the requirement of substantiating the manner is not met. The appellate authorities had misdirected themselves and the penalty was restored.
• Lalitamba Pattina Souharda Sahakari Niyamita v ITO High CourtHelps taxpayerValidity unconfirmed
  The Tribunal refused my society's s.80P(2)(a)(i) claim on bank fixed deposit interest saying it had already been given s.80P(2)(d). Can the two clauses be treated as interchangeable, and if the interest really is income from other sources, what happens to my cost of funds?
  No, they cannot. The Karnataka High Court held that s.80P(2)(a)(i) and s.80P(2)(d) are entirely different and distinct provisions, that a deduction given under (d) does not disentitle a society from claiming under (a)(i), and that the authorities cannot reject an (a)(i) claim by mixing up the two. It further held that even if the interest is assessable under s.56, the Tribunal, as the last fact finding authority, was obliged to examine the proportionate cost of funds and administrative expenses deductible under s.57, and it remanded the matter to the Assessing Officer.
• Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd v DCIT High CourtHelps departmentValidity unconfirmed
  The department has attached my bank account under s.226(3) because I did not pay the 20%. I say I have already paid more than that. Will the High Court interfere?
  Not if the payment you point to was self-assessment tax paid against your own returned income, and not against the assessment demand. The Court upheld the garnishee notice to the bank: the assessee was obliged under the CBDT circulars to pay 20% of the outstanding demand, it had not done so, and the department was therefore justified in proceeding under s.226(3).
• Flipkart India Private Limited v ACIT High CourtHelps taxpayerValidity unconfirmed
  Did the 2016 Office Memorandum wipe out Instruction No. 1914 and its hardship tests?
  No. The 2016 memorandum only partially modifies Instruction No. 1914; both must be read together. The tests of an unreasonably high-pitched assessment and of genuine hardship survive, and a mechanical demand for a percentage without reasons will not stand.
• DIT (International Taxation) v. GE Packaged Power Inc. — filing a NIL return at reassessment does not make a non-resident liable to s.234B interest for a pre-2012 year High CourtHelps taxpayer
  My non-resident client filed a NIL return after a s.148 notice, the Assessing Officer found a permanent establishment and charged s.234B interest for years before 2012. Does the fact that he denied taxability defeat the s.209(1)(d) argument?
  The Delhi High Court held that it does not. For assessment years before the Finance Act, 2012 proviso, s.209(1)(d) allowed the non-resident to reduce his advance tax by the tax that was deductible at source from the remittances, whether or not it was actually deducted, so no advance tax was payable and no s.234B interest could be charged — and the Court held that this remained so 'even though they filed returns declaring NIL income at the stage of reassessment'. It read the earlier decision in DIT v. Alcatel Lucent USA Inc. as turning on that assessee's initial denial of permanent establishment status followed by its volte face admitting it, not on the mere filing of a NIL return.
• Rajendra Kumar Dwivedi v CIT, Kanpur High CourtHelps departmentValidity unconfirmed
  I sold my agricultural land in small plots over several years, leaving roads and drains. The Assessing Officer has taxed part as business income and part as capital gains and invoked s.45(2). Can he split it like that?
  Yes, on facts like these. The Allahabad High Court upheld a finding that land held in an urban area as a capital asset, carved into 43 plots of 60 to 1,815 sq. mtrs. and sold over seven years with roads and drainage provided, had been converted into stock-in-trade, so that s.45(2) applied and the profits on sale were business income. Both substantial questions were decided in favour of the Revenue and the appeals were dismissed.
• CIT v. N. Sundarraman (Madras High Court) — deposits funded by convertible foreign exchange routed through NRE accounts later redesignated as NRNR keep the s.115E rate, and a wrong 'resident' description in the return does not alter the assessee's real status High CourtHelps taxpayer
  My client remitted his overseas salary into NRE accounts, later had them redesignated as NRNR deposits, and described himself as 'Resident' in his return by mistake while claiming section 115H. The assessing officer says he is a resident, that no valid section 115H declaration was filed with the return, and has denied the twenty per cent rate. Is there anything in this?
  Yes, on two grounds the Madras High Court accepted. First, on the facts found by the Tribunal the redesignation of the NRE accounts into NRNR accounts had been made only out of the convertible foreign exchange lying to the assessee's credit in accounts opened with the inflow of the original foreign exchange transferred to India as approved by the Reserve Bank of India, so the deposits remained foreign exchange assets. Second, the Court held that the assessee's real status cannot be denied merely because he made a wrong declaration when he satisfied all the conditions, and that being 'not ordinarily resident' he was not a 'resident' and so fell within the definition of non-resident Indian in section 115C(e) and was entitled to section 115E in its own right, with no obligation to file any declaration under section 115H.
• Spice Entertainment Ltd v Commissioner High CourtHelps taxpayer
  The assessment order is in the name of a company that had already amalgamated and ceased to exist. The department says s.292B cures it because we participated. Is the order void?
  It is void. Framing an assessment against a non-existing entity goes to the root of the matter: it is a jurisdictional defect, not a procedural irregularity, and s.292B cannot cure it. Participation by the amalgamated company makes no difference, because there is no estoppel against law.
• Ashok Chaddha v Income Tax Officer High CourtHelps department
  My post-search assessment under section 153A was completed without any notice under section 143(2). Does Hotel Blue Moon make that fatal?
  No. The Delhi High Court held that there is no specific provision in the Act requiring an assessment under section 153A to be preceded by a notice under section 143(2). Hotel Blue Moon turned on clause (b) of section 158BC, which expressly applies sub-sections (2) and (3) of section 143 to a block assessment; section 153A contains no such provision. The words 'so far as may be' in clause (a) of section 153A(1) cannot be stretched to make a section 143(2) notice mandatory, because a specific notice is already required under that clause calling for the return. In any event the two detailed questionnaires issued here served the purpose. The appeal was dismissed.
• Tamil Nadu Magnesite Ltd v CIT High CourtHelps taxpayerValidity unconfirmed
  The Assessing Officer has rectified my old s.143(1)(a) intimation under s.154 after already completing a s.143(3) assessment. Can he do that?
  No. Once a notice under section 143(2) has gone out and a regular assessment has been made under section 143(3), the earlier intimation under section 143(1)(a) merges into that assessment and no longer stands as an order of its own. There is then nothing left for section 154 to rectify. The Madras High Court set aside a rectification made in December 1998 on an intimation of 7 March 1994, which had charged additional tax of Rs 4,70,346 more than three years after the scrutiny assessment of 22 November 1995 was over, and set aside the revisional order that had confirmed it. The rectification was held to be wholly without jurisdiction.
• CIT v Dwarkadhish Investment (P) Ltd High CourtHelps taxpayerValidity unconfirmed
  I gave the officer the share applicants' PAN, incorporation papers, affidavits and bank statements, but he could not find them at their addresses and has added the money under section 68. Is that right?
  No. The Delhi High Court held that the onus under section 68 is not static. The initial burden is on the assessee, but once he proves the identity of the share applicants by furnishing a permanent account number or assessment particulars and shows the genuineness of the transaction by producing the money received through account payee cheque, draft or other traceable mode, the onus shifts to the Revenue. That the applicants could not be found at the addresses given does not by itself let the officer invoke section 68 - it is the Revenue that has the power and the machinery to trace people. The assessee need not prove the source of the source.
• Malik Packaging v CIT High CourtHelps taxpayerValidity unconfirmed
  The officer completed a best judgment assessment under s.144 because I did not attend in answer to the s.143(2) notice. Was he required to give me a separate show cause notice first?
  Yes. The proviso to s.144(1) requires that the opportunity of being heard be given by serving a notice calling on the assessee to show cause, on a date and time specified, why the assessment should not be completed to the best of the officer's judgment. Where the record showed no notice other than the s.143(2) notice had been issued, the Allahabad High Court held that no notice under the proviso had been issued, set aside the Commissioner's order refusing relief under s.264 and directed him to pass a fresh order in accordance with law.
• CIT v Smt. Premlata Jalani High CourtHelps taxpayerValidity unconfirmed
  My capital gain arose after 15 March, so I could not have paid advance tax on it in any instalment. The Assessing Officer has charged s.234C interest from the first instalment date. Can he?
  No. The Rajasthan High Court held that the liability to pay advance tax on a capital gain arises only once the gain has accrued, so interest under s.234C on the shortfall attributable to that gain can run only from the date the advance tax on it became payable, and not from any earlier instalment date. Where the gain arose after 15 March, the proviso required only that the tax be paid by 31 March, and interest ran for that period alone.
• CESC Ltd v DCIT High CourtHelps taxpayer
  The Assessing Officer has issued a section 154 notice to rectify my section 143(1)(a) intimation after a scrutiny notice under section 143(2) was already served. Can he do that?
  No. The Calcutta High Court quashed the section 154 notices. Once a notice under section 143(2) has been issued the department cannot fall back on the summary procedure of section 143(1)(a), and rectifying the intimation is only another way of activating that procedure, so it is equally impermissible. The Court added a second and independent reason: where a regular assessment under section 143(3) has been completed on the same item, the order under section 143(1)(a) ceases to be operative and merges in the final order, so there is nothing left to rectify. The notices for the four years before the Court were quashed.
• S.R.F. Charitable Trust v Union of India High CourtHelps taxpayer
  The department adjusted my return under section 143(1)(a) simply because I did not attach proof of my claims. Can it do that?
  No. The Delhi High Court held that an adjustment under the first proviso to section 143(1)(a) can be made only where the claim is prima facie inadmissible on the information available in the return, the accounts or the accompanying documents. The conclusion must flow from the return as filed. No power is given to disallow a claim merely because proof has not been furnished. If the officer wants proof he must ask for it, which means issuing a notice under section 143(2). The intimation was quashed.
• PCIT v Jai Shiv Shankar Traders High CourtCuts both ways
  If the assessee says its original return should be treated as the return in response to s.148, must the Assessing Officer still issue a fresh s.143(2) notice?
  The assessee told the Assessing Officer that its original return be treated as filed in response to the s.148 notice. The officer then completed the reassessment without issuing any notice under s.143(2). The Delhi High Court held the omission fatal and held that s.292BB cures defective service of a notice, not the failure to issue one at all.
• Cyberstar Infocom LLP v ITO ITATHelps taxpayer
  My company became an LLP and I told the officer, but he still issued the notice and passed the assessment in the old company's name. Is that just a clerical slip he can correct?
  No. The Bangalore Tribunal quashed the assessments as void ab initio. The company converted to an LLP on 27 April 2018 and the LLP wrote to the Assessing Officer on 31 May 2018 enclosing the Ministry of Corporate Affairs certificate and asking him to take the change of status on record. He nonetheless issued the section 143(2) notices and passed the orders under section 143(3) read with section 147 in the name of the company. Following Maruti Suzuki, the Tribunal held that an assessment in the name of a non-existent entity is a substantive illegality and not a defect curable under section 292B.
• Standard Chartered Bank v ACIT (Mumbai Tribunal, 2026) ITATCuts both waysValidity unconfirmed
  The officer has treated expatriate salaries paid by our London head office as head office expenditure and capped them under s.44C. Is that correct, and does the treaty's non-discrimination article get me out of s.44C altogether?
  On the first question, no. Section 44C restricts only executive and general administrative expenditure incurred outside India in connection with the management of the non-resident's affairs; salary of expatriate employees deputed to and working exclusively for the India branch is not head office expenditure merely because the head office paid it first. On the second, the Tribunal declined to hold that Article 26(2) of the India-UK treaty knocks out s.44C in every case — that has to be decided on the nature of the expenditure and the facts, read with Article 7(4).
• Balaka Cold Storage v ACIT ITATHelps taxpayerValidity unconfirmed
  Was the officer who assessed you even authorised to, given the amount involved?
  Pecuniary jurisdiction is a real limit. Where the assessed income crossed the monetary threshold fixed for that officer, the assessment was held to be by a non-jurisdictional officer and was quashed.
• ACIT v JD Ispat Pvt Ltd ITATHelps taxpayerValidity unconfirmed
  Same point, at Tribunal level: can taking part in a reassessment cure a missing s.143(2) notice?
  No. Section 292BB cures defects in service of notice but does not cure the complete absence of the notice. The reassessment was quashed and a Rs 2.33 crore s.68 addition went with it.
• ACIT v Md. Illyas Hussain — the section reads "issue", not "serve": the Revenue's side of the section 143(2) point in a block assessment ITATHelps departmentValidity unconfirmed
  The Commissioner (Appeals) annulled the block assessment because no section 143(2) notice was served. Can the department save it by showing the notice was issued?
  The Patna Tribunal held that it could. It read section 158BC as requiring only the ISSUE of a notice under section 143(2) and not its service, found on the record that a notice had been issued on 20 August 1999 and received at the assessee's address, and added that in any event the assessee's block return, filed after the time allowed, was an invalid return so that no section 143(2) notice was required at all. It set aside the annulment and restored the appeal to the Commissioner (Appeals) to be decided on the merits.
• Sonaj And Company v DCIT — a belated block return under the 1995 Chapter is still a valid return, and the 2024 amendment proves it ITATHelps taxpayerValidity unconfirmed
  The block return was filed after the time given in the section 158BC notice and the notice under section 143(2) came more than twelve months later. The department says the return was non est. Is it?
  For a search governed by the 1995 Chapter XIV-B, no. The Pune Tribunal held that there was no provision in the erstwhile section 158BC making a block return filed beyond the time specified in the notice non est, so the belated return was a valid return, the notice under section 143(2) had to issue within twelve months of the end of the month in which it was filed, and a notice issued later made the block assessment null and void. The Tribunal reached that conclusion partly BECAUSE the amended section 158BC, applicable from 1 September 2024, now says expressly that a return furnished beyond the period allowed shall not be deemed to be a return under section 139 — a provision it treated as absent from the earlier law.
• 360 One Distribution Services Ltd v DCIT — s.80A(5) kills a s.80JJAA claim first made before the Commissioner (Appeals) ITATHelps departmentValidity unconfirmed
  We missed the s.80JJAA claim in the return and raised it for the first time in appeal, with the Form 10DA report in hand. Can the Commissioner (Appeals) or the Tribunal still allow it?
  No. The Mumbai Tribunal held that s.80A(5) disentitles an assessee from claiming a deduction under s.80JJAA where the claim was not made in the return of income, and that this disposes of the matter without going into any other aspect. It was no answer that the chartered accountant's Form 10DA had been issued, because the Tribunal found nothing on record that prevented the assessee from raising the claim and filing Form 10DA before the Assessing Officer during the scrutiny proceedings, which ran on until the assessment order was passed. The appeal was dismissed.
• Balakumar Anusia v ACIT, International Taxation Circle, Madurai ITATHelps departmentValidity unconfirmed
  My client answered neither the section 143(2) notice nor the section 142(1) notice, and the Assessing Officer has levied Rs 20,000 — Rs 10,000 for each. Is there any answer to that on appeal?
  On these facts, no. Where the assessee simply did not respond to either notice, the Chennai Bench held that the Assessing Officer had rightly levied Rs 10,000 for each default under section 272A(1)(d) and dismissed the appeal — the section's own charging words are 'a sum of ten thousand rupees for each such default or failure'.
• Amit Jain v DCIT, Circle (International Taxation), Jaipur ITATHelps taxpayerValidity unconfirmed
  I asked the Assessing Officer for more time on a section 142(1) notice and then filed the reply within the time I had asked for. He has still levied Rs 10,000 under section 272A(1)(d). Is that sustainable?
  No, on these facts. Where the assessee answered the notice by filing an adjournment request, and the Assessing Officer never rejected that request by a speaking order, the notice was attended to and there is no 'failure to comply' at all — the Tribunal deleted the Rs 10,000 penalty without needing to reach section 273B.
• Rashmi Subhash Jha v ITO — 'consultancy' is not 'technical consultancy', and deduction under s.194J does not make the receipt professional ITATHelps taxpayerValidity unconfirmed
  The CPC has re-cast my client's s.44AD return as a s.44ADA return under s.143(1)(a) because her clients deducted tax under s.194J. Is a consultant a professional for this purpose?
  No, on this order. The word 'consultancy' does not appear in s.44AA(1), which speaks of 'technical consultancy', and technical consultancy means the rendering of technical services; a consultant is therefore carrying on a business and may return income under s.44AD. The rate at which a client deducts tax while paying the assessee is of absolutely no relevance to the character of the receipt in the recipient's hands, and the adjustment made by the Assessing Officer and the CPC under s.143(1)(a) was held bad in law.
• M/s. Jayanti Botanical Gardens v ITO, Bangalore ITATHelps departmentValidity unconfirmed
  I run a nursery. Explanation 3 to s.2(1A) says income from saplings or seedlings grown in a nursery is agricultural income. The Assessing Officer has treated half my receipts as business income because my contracts also cover planting and landscaping at the customer's site. Can he?
  Yes. The Bangalore Tribunal held that by virtue of Explanation 3 to s.2(1A) only income derived from the sale of saplings and seedlings grown in the assessee's OWN nursery is deemed to be agricultural income, and that receipts under a composite contract that also covers preparing the client's site, supplying soil and fertiliser, making pits, planting, engaging horticulturists and insuring the plants are not. The ad hoc split of 50 per cent made by the Assessing Officer and confirmed by the Commissioner (Appeals) was upheld and the appeal was dismissed.
• Vatsalabai Karbhari Deore v ACIT ITATHelps taxpayerValidity unconfirmed
  You missed the notices and got a best judgment assessment. Is the officer's estimate final?
  Not if it is arbitrary. An 8% net profit estimate was set aside as lacking proper substantiation, and the matter was remanded so the audited books and supporting evidence could be produced.
• In re Mustaq Ahmed (admission) Advance RulingHelps taxpayer
  The Department says my advance ruling application is barred because scrutiny of my return had already begun. Does a section 143(2) notice issued before I applied shut me out?
  No, on these facts - and this decision goes no further than that. The Authority allowed the application under section 245R(2) and posted it for hearing; it did not rule on whether the applicant's income from buying gold jewellery in India for export is taxable. The applicant, resident in Singapore, had filed returns for assessment years 2005-06 and 2006-07 claiming no exemption, applied to the Authority on 26 March 2007, and only then filed revised returns on 30 March 2007 claiming the exclusion in Explanation 1 to section 9(1)(i). The Authority held that no question was pending on the date of the application, and that claiming a statutory exemption is not a design for avoidance.
• Mustaq Ahmed v DIT (International Taxation) Advance RulingHelps taxpayer
  I applied to the Authority on 26 March and filed a revised return claiming an exemption on 30 March. The Department says my question was already pending. Was it?
  No. The Authority allowed the application under section 245R(2), rejecting the Department's objection under clause (i) of the proviso. The applicant, resident in Singapore, had filed returns for assessment years 2005-06 and 2006-07 on 30 October 2005 and 31 October 2006 which claimed no exemption; he applied to the Authority on 26 March 2007; and he filed revised returns claiming the exclusion in Explanation 1 to section 9(1)(i) only on 30 March 2007. The Authority held that pendency is judged as on the date of the application, so nothing was in issue on 26 March 2007. It also rejected the objection that the transaction was designed for avoidance.
• In re Rotem Company and Mitsubishi Corporation Advance RulingHelps taxpayer
  We are in a consortium supplying rolling stock to Delhi Metro. Our returns are filed and a writ about the TDS rate is pending. Can we still get an advance ruling?
  Yes. The Authority held the applications maintainable and allowed them so that rulings could be pronounced. On the bar in clause (i) of the proviso to section 245R(2) it held that the mere filing of returns by the applicants would not fall within the mischief of that clause, no notice under section 143(2) having been issued to them before the date of the applications. The proceedings that were on foot - applications under section 197 for determination of the rate of deduction, an appeal against the order on them and a writ petition - concerned the rate of tax for deduction at source, and did not involve the questions the Authority was being asked to decide.
• Statutory position — section 158BC: the sixty-day notice, the two approvals, and the traps that kill a block assessment CBDT Circulars & InstructionsCuts both ways
  My client has a section 158BC notice for a March 2025 search. How long has he got, what happens if he files late, and is there a section 153D approval to attack?
  The notice must give a period not exceeding sixty days for the block return, and that period can be extended by a further thirty days only in the narrow audit case described in the fifth proviso. If the return goes in after the period allowed, the second proviso says in terms that it 'shall not be deemed to be a return under section 139' — so a late block return is non est, with consequences that run all the way to the notice under section 143(2). There is no section 153D approval in a block assessment; the approvals are elsewhere — section 158BC(3) requires the prior approval of the Additional or Joint Commissioner or Director BEFORE the section 158BC notice is issued, and section 158BG requires the previous approval of the same rank BEFORE the assessment order is passed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.