2010 (3) TMI 1135 - AT - Income Tax

Summary

Issues Involved:
1. Validity of notice u/s 143(2) issued beyond the mandatory period.
2. Jurisdiction of the Tribunal to entertain new grounds raised orally by the assessee.

Summary:

1. Validity of Notice u/s 143(2):
The assessee argued that the notice u/s 143(2) was issued after more than 12 months from the date of filing the block return, making the assessment time-barred. The notice was issued on 15/10/2001, while the return was filed on 19/7/2000. The Department contended that the notice was issued within one year, citing a typographical error in the assessment order. The Tribunal verified the records and confirmed that the notice was indeed issued on 15/10/2001, thus beyond the mandatory period, rendering the assessment invalid.

2. Jurisdiction of the Tribunal to Entertain New Grounds:
The Department argued that the Tribunal could not entertain the new ground as it was not raised before the AO, nor was it part of a written ground or cross-appeal. The Tribunal referred to the judgment of the Jurisdictional High Court in B.R. Bamasi vs. CIT, which allows the assessee to raise a new ground of law orally, provided it does not require additional evidence. The Tribunal admitted the plea, emphasizing that it serves as a defense against the appeal and does not necessitate setting aside the entire assessment.

Conclusion:
The Tribunal dismissed the revenue's appeal, holding that the AO erred in not issuing the notice u/s 143(2) within the mandatory period of 12 months from the date of filing the block return. The decision was supported by the Supreme Court ruling in ACIT vs. Hotel Bluemoon. The appeal was dismissed without addressing other issues.

Order Pronounced:
The order was pronounced on the 23rd day of March, 2010.