Section 143(2) Notice Reassessment: SC Rules Absence Fatal
November 10, 2026 · Taxation
The Supreme Court rules that omitting a Section 143(2) notice after a Section 148 return invalidates reassessment. Section 292BB cannot cure this defect.
"A notice under section 143(2) of the Act is sine qua non for a proceeding for reassessment under Section 147 of the Act." (Para 13)
No section 143(2) notice after a section 148 return means no valid reassessment. The Supreme Court said so on October 28, 2026 in PCIT, Bhubaneshwar v. Orissa Mining Corporation Ltd. , 2026 INSC 1171, dismissing the Revenue's appeals.
The reportable judgment, written by Justice Sanjeev Sachdeva for a bench with Justice Sanjay Kumar, reaffirms existing law rather than making new law. It applies ACIT v. Hotel Blue Moon , (2010) 3 SCC 259.
Key takeaways
A notice under Section 143(2) is a mandatory condition precedent for completing reassessment under Section 147 once a return is furnished.
Section 292BB cures only defective or delayed service; it cannot cure a complete failure to issue a Section 143(2) notice.
Assessee participation in assessment proceedings or requesting the original return be treated as a Section 148 return does not waive statutory notice requirements.
A questionnaire or letter issued under Section 142(1) cannot substitute or cure the omission of a Section 143(2) notice.
What happened in the Orissa Mining files
The reopened years were AY 2008-09, 2010-11 and 2011-12 for Orissa Mining, and AY 2009-10 and 2010-11 for Bijoy Kishore Mohanty. Orissa Mining asked that its original return be treated as the section 148 return; Mohanty filed the same return again.
The department admittedly issued no section 143(2) notice, only section 142(1) notices seeking documents. The ITAT set the reassessment orders aside, and the High Court rejected the Revenue's challenge.
Three questions the Revenue lost
Does section 292BB cure the defect?
The Revenue argued that because the assessees cooperated, section 292BB barred the objection. The Court: the provision covers defects in service and applies only where a notice is alleged to have been sent (para 15). Where the Revenue admits it never issued one, it has no application (para 16). CIT v. Laxman Das Khandelwal , (2021) 18 SCC 691, was relied on: section 292BB saves infirm service, not a complete absence of notice (para 21).
Do participation and a reiterated return excuse the notice?
The Revenue's case was that a section 143(2) notice was not required and its absence was not fatal (para 14). The second question was whether that holds where the assessee asks that its earlier return be treated as the section 148 return (para 3(ii)). The Court: mere participation does not confer jurisdiction on the Assessing Officer (para 17), and such a request does not free the Revenue from issuing the notice (paras 18 and 23(ii)). The omission is not curable (para 20).
Is a section 142(1) letter enough?
The third question was whether a section 142(1) letter asking the assessee to explain the proposed grounds for reassessment was enough (para 3(iii)). The Court: "A letter issued after commencing the proceedings would not cover up the lacuna in the proceedings and would not validate what is non est." (para 22).
Illustration: Reassessment addition without Section 143(2) notice
Consider an assessee who files a return for AY 2020-21 declaring income of INR 12,00,000/-. The Assessing Officer reopens the assessment under Section 148 alleging escaped income of INR 45,00,000/- on unexplained share investments. The assessee responds on 15 May 2023 requesting that the original return be treated as the return filed under Section 148.
The Assessing Officer issues a questionnaire under Section 142(1), gathers bank statements, and passes a reassessment order adding INR 45,00,000/- to the total income along with penalty notice under Section 270A. However, the officer never issues a notice under Section 143(2). Following this Supreme Court ruling, the entire reassessment addition of INR 45,00,000/- is void ab initio, and the consequential penalty proceedings under Section 270A also collapse.
Where the Supreme Court's section 143(2) ruling stops
This section is our analysis. In this section 143(2) notice reassessment decision, the ruling strictly covers situations where the department admitted it never issued the statutory notice. Late service, disputed service and the time limit for issuing a notice are different questions, and the judgment decides none of them.
The case concerned AY 2008-09 to 2011-12 under the Income-tax Act, 1961. It does not discuss section 148A or the Income-tax Act, 2025, nor whether the Revenue could start again. Our analysis of Finance Bill 2026 procedural changes covers the Bill's reassessment proposals.
Section 536(2)(c) of the 2025 Act keeps the 1961 Act applying to proceedings pending on its commencement, and to proceedings initiated on or after April 1, 2026 (including reassessment), in respect of any tax year beginning before April 1, 2026. So the ruling speaks to those years directly. The 2025 Act has parallel wording in sections 270(8), 280(2) and 523, but we have not seen any court apply this ruling to them yet.
One check for every reopened file
For each reopened 1961-Act year still pending or under appeal, open the e-proceedings record and look for a section 143(2) notice issued after the section 148 return. A section 142(1) letter is not that notice.
The visual case note on the missing section 143(2) notice sets out the ruling.
The ruling helps only where the record shows no notice at all, so the record is where to start.
Sources
Supreme Court of India, PCIT, Bhubaneshwar v. Orissa Mining Corporation Ltd., 2026 INSC 1171, October 28, 2026
Income-tax Act, 2025, as amended by the Finance Act, 2026, sections 270, 280, 523 and 536
This article is for general information only and does not constitute professional advice. Position as of November 10, 2026.