2007 (11) TMI 661 - HC - Income Tax

Summary

Issues involved: Challenge to assessment order for the assessment year 1989-90 based on the limitation period u/s 148 of the Income Tax Act.

Summary:
The appellant challenged the assessment order for the assessment year 1989-90, questioning the validity of the order based on the limitation period u/s 148 of the Income Tax Act. The key issue raised was whether the assessing Officer's failure to pass an order within two years from the date of issuing the notice under Section 148 of the Act rendered the assessment barred by limitation.

The High Court noted that a notice under Section 148 of the Act was issued on 10.6.1991 and served on the assessee on 11.6.1991. Despite subsequent notices and summons, the assessment order was completed on 29.3.1996, exceeding the two-year limitation period. The Court emphasized that the subsequent notice issued on 22.3.1993 did not extend the limitation period, as there is no provision under the Act for issuing notices after Section 148 notices. The Court held that the assessment should have been completed within two years of the initial notice, and the additional notice did not save the limitation. As this legal issue was not considered by the lower authorities, the Court allowed the appeal in favor of the assessee, setting aside the orders of the Income Tax Appellate Tribunal, Commissioner of Income Tax (Appeals), and the Assessing Officer.