S. 292BB does not have retrospective effect

CIT vs. Salman Khan (Bombay High Court)

 

The AO issued a notice u/s 148 to make a reassessment. However, as a notice u/s 143(2) was not issued, the Tribunal quashed the reassessment. The Department filed an appeal before the High Court where it relied on s. 292BB (which provides that the failure to issue notice cannot be objected to if the assessee has appeared in the proceeding), inserted by the Finance Act 2008 w.e.f. 1.4.2008 and argued that the said provision was retrospective in operation and the reassessment was valid. HELD by the High Court dismissing the appeal:

The issue of a notice u/s 143(2) is mandatory. The failure to do so renders the reassessment void (J.M.Scindia 300 ITR 193 (Bom) followed). S. 292BB was inserted w.e.f. 1.4.2008 and came into operation prospectively for AY 1999-2000 and onwards.