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Issues Involved:
1. Validity of the second notice u/s 148 issued on March 25, 1997. 2. Jurisdiction and legality of reassessment proceedings initiated by the respondent. Summary: Issue 1: Validity of the second notice u/s 148 issued on March 25, 1997 The petitioners, partners in the firm "Kerala Hides and Skins," challenged the second notice u/s 148 issued on March 25, 1997, for the assessment years 1986-87 and 1988-89. The firm had previously filed a settlement petition before the Settlement Commission, which determined the firm's income on an estimated basis. The Assessing Officer issued the first set of notices u/s 148 on March 21, 1994, which were not responded to by the petitioners, and no assessments were completed before the due date, March 31, 1996. Subsequently, a second set of notices u/s 148 was issued on March 25, 1997, after obtaining due sanction from the Additional Commissioner of Income-tax. The court held that the second notice u/s 148 for the year 1986-87 was beyond the time limit provided u/s 149(1) of the Act, making it invalid. However, the notice for the assessment year 1988-89 was within the time limit. The court further stated that the Assessing Officer could issue multiple notices u/s 148 provided the conditions stipulated in section 147 are satisfied and within the period specified u/s 149 read with section 151. However, if an assessment is pending, either by way of original assessment or reassessment proceedings, a notice u/s 148 cannot be issued. Issue 2: Jurisdiction and legality of reassessment proceedings initiated by the respondent The petitioners argued that the reassessment proceedings initiated by the respondent were illegal and without jurisdiction. The court examined the relevant provisions of the Income-tax Act, including sections 139, 142, 143, 144, 147, 148, 149, 151, and 153. It was found that the first notice u/s 148 issued on March 21, 1994, had not been acted upon, and the time limit for completion of the assessment pursuant to the said notice had expired. The court concluded that the second notice u/s 148 issued on March 25, 1997, was invalid because the assessments for the two years were still pending on the date of issuance of the second notice. Consequently, the notices dated March 25, 1997 (exhibits P-9 to P-12), and the further notices (exhibits P-13 to P-16) issued by the respondent were quashed as invalid and without jurisdiction. Conclusion: The original petition was allowed, and the second notice u/s 148 issued on March 25, 1997, along with subsequent notices, were declared invalid and without jurisdiction. No order as to costs was made.
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