2011 (6) TMI 799 - HC - Income Tax

Summary

Issues involved: Challenge to order u/s 260-A of the Income Tax Act, 1961 regarding validity of assessment order u/s 158BC for the block period 1989-90 to 1998-99 and 1.4.98 to 3.9.98 due to non-issuance of notice u/s 143(2) within one year from the date of filing of the return.

The High Court of Gujarat dismissed the appeal challenging the order made by the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot. The substantial question of law formulated by the Court was whether the assessment order u/s 158BC for the block period was invalid due to non-issuance of notice u/s 143(2) within one year from the date of filing of the return. The controversy was settled by the Supreme Court in the case of Assistant Commissioner of Income Tax v. Hotel Blue Moon, [2010] 321 ITR 362 [SC], favoring the assessee.

The Court noted that as per the Supreme Court decision in the case of Assistant Commissioner of Income Tax v. Hotel Blue Moon, notice u/s 143(2) must be issued within one year from the date of filing of the block return for completing the assessment under Section 143(3) read with Section 158-BC. The failure to issue such notice is not a procedural irregularity and cannot be cured, thus making it a mandatory requirement. Consequently, the appeal was dismissed in favor of the assessee and against the revenue, with no order as to costs.