2004 (8) TMI 85 - HC - Income Tax

Assessment made under section 143(3) limitation - Whether the Tribunal was justified in holding that the assessment made under section 143(3) read with section 143(2)(b) of the Income-tax Act, 1961, was barred by limitation in view of section 153(2) when the return was b filed in response to notice under section 148 served on September 29, 1983? - We are not inclined to subscribe to the view taken by the Tribunal when it held the assessment to be barred. We, however, hold that the assessment in question for the year 1982-83 made pursuant to section 148 notice was within limitation and it be given effect to - Accordingly and in view of the aforesaid discussion, we answer the question referred to us in the affirmative, i.e., in favour of the Revenue

Summary

Issues:
1. Interpretation of section 153(2) of the Income-tax Act, 1961 regarding the limitation period for assessment.
2. Determining whether the assessment made under section 143(3) read with section 143(2)(b) was within limitation or barred by limitation.
3. Questioning the Tribunal's decision on the assessment's limitation period based on the notice served under section 148.

Analysis:
The High Court of MADHYA PRADESH addressed an income-tax reference concerning the interpretation of section 153(2) of the Income-tax Act, 1961. The core issue revolved around whether the assessment made under section 143(3) read with section 143(2)(b) was within the prescribed limitation period. The Tribunal's decision, which was under question, was based on the notice served under section 148 of the Act. The Tribunal had held that the assessment completed by the Assessing Officer was barred by limitation. The court examined the timeline of events, noting that the notice under section 148 was served on September 29, 1983, and the assessment was completed on March 25, 1988.

The court delved into the provisions of section 153(2) of the Act applicable at the time of the notice issuance and assessment completion. Section 153(2) imposed a limitation of four years from the end of the assessment year in which the notice under section 148 was served. In this case, the end of the assessment year was determined to be March 31, 1984. Therefore, the four-year period would have expired on March 31, 1988. Since the assessment was completed on March 25, 1988, it was deemed to be well within the stipulated limitation period as per section 153(2). The court emphasized that the assessment was made in accordance with the requirements of the Act and was not barred by limitation as contended by the Tribunal.

Consequently, the court disagreed with the Tribunal's view that the assessment was time-barred. The judgment favored the Revenue and ruled in favor of the assessment being within the limitation period. The court's decision was based on a meticulous analysis of the relevant statutory provisions and the timeline of events leading to the assessment. As a result, the question posed in the reference was answered in the affirmative, supporting the Revenue's position and rejecting the assessee's claim. The judgment concluded without imposing any costs on either party.