2000 (11) TMI 56 - HC - Income Tax

Summary

Issues:
1. Validity of notice requiring statement of assets and liabilities under section 142(1) of the Income-tax Act, 1961.
2. Competency of the Income-tax Officer to make assessment under section 144 in the absence of fresh notice after the assessee filed a revised return.

Issue 1:
The dispute in this case revolves around the assessment year 1970-71 and the interpretation of sections 142(1), 142(2), and 144 of the Income-tax Act, 1961. The Income-tax Appellate Tribunal referred two questions to the High Court regarding the validity of a notice requiring the statement of assets and liabilities under section 142(1) of the Act. The Income-tax Officer had directed the assessee to submit these statements, but the assessee failed to comply despite reminders. The Income-tax Officer proceeded with an ex parte assessment under section 144, which was challenged in appeal. The Appellate Assistant Commissioner and the Tribunal upheld the assessment. The High Court, after considering the arguments, including the contention that the notice was vitiated, held that the authorities were justified in making the ex parte assessment due to the lack of response from the assessee. The High Court answered the first question in favor of the Revenue.

Issue 2:
The second question referred to the High Court concerned the competency of the Income-tax Officer to make an assessment under section 144 without issuing a fresh notice after the assessee filed a revised return. The assessee argued that the notice under section 142(1) became inoperative after the revised return was filed. However, the Tribunal rejected this argument, citing a decision of the Andhra Pradesh High Court and a combined reading of sections 142(1) and 144. The High Court agreed with the Tribunal's reasoning and held that the authorities were justified in proceeding with the ex parte assessment due to the lack of response to the notice under section 142(1). Therefore, the High Court answered the second question in favor of the Revenue.

In conclusion, the High Court disposed of the references by affirming the validity of the notice requiring the statement of assets and liabilities under section 142(1) and upholding the competency of the Income-tax Officer to make the assessment under section 144 without issuing a fresh notice after the assessee filed a revised return.