2008 (6) TMI 585 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order due to non-service of notice u/s 143(2) within the prescribed time.
2. Applicability of Section 292BB of the IT Act, 1961.

Summary:

Issue 1: Validity of the Assessment Order due to Non-Service of Notice u/s 143(2) within the Prescribed Time

The assessee argued that the CIT(A) erred in not quashing the assessment order as the notice u/s 143(2) was not served within the statutorily prescribed time, constituting a jurisdictional default. The CIT(A) held that the notice was issued within time and that the provisions of s. 143(2) were not mandatory but obligatory, and non-compliance did not render the assessment null and void. The Tribunal found no evidence that the notice dated 11th/13th Nov., 1997, was served on the assessee before 30th Nov., 1997, as required. The Tribunal concluded that the assessment was invalid due to the failure to serve the notice within the prescribed time, supported by the decision in CIT vs. Vardhman Estate (P) Ltd. (2007) 208 CTR (Del) 251.

Issue 2: Applicability of Section 292BB of the IT Act, 1961

The Tribunal noted that Section 292BB, which came into effect from 1st April, 2008, was not applicable to the assessment year 1996-97. The provision would apply to hearings conducted on or after 1st April, 2008, where the assessee participated, or to proceedings for the assessment year 2008-09 and subsequent years. Therefore, this provision did not advance the case of the Revenue.

Conclusion:

The Tribunal allowed the appeal of the assessee on the preliminary ground of non-service of notice u/s 143(2) within the prescribed time, leading to the cancellation of the assessment. Consequently, the appeal of the Revenue was dismissed.