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Issues involved: Assessment under Section 143, reopening of assessment under Section 148, validity of reassessment proceedings, mandatory notice under Section 143(2).
Summary: The appellant, engaged in the business of manufacture and sale of Urea, maintained books of account as per Section 209 of the Companies Act and accounting guidelines by the Institute of Chartered Accountants of India. The appellant's return for Assessment Year 1997-98 was processed under Section 143(1)(a) and a regular assessment order under Section 143(3) was passed. Subsequently, the assessment was reopened by the Assessing Officer under Section 148, leading to a series of notices and objections by the appellant. The appellant filed a petition under Section 144-A requesting the proceedings under Sections 142, 143, 147, 148 to be dropped. Despite repeated notices and objections, the Assessing Officer passed the assessment order without deciding on the objections raised by the appellant. The appellant then appealed the decision, which was partly allowed. The questions of law framed in the appeal included the validity of the reassessment order, the necessity of a notice under Section 143(2) after filing the return, and the requirement for the Assessing Officer to decide on objections raised by the appellant. The High Court, citing previous judgments, held that the provision of Section 143(2) is mandatory, and the Assessing Officer must issue a notice under Section 143(2) after the filing of the return in response to a notice under Section 148. As the Assessing Officer failed to issue such notice in this case, the reassessment proceedings were deemed invalid. Consequently, the Income-tax Appeal was allowed, the impugned order was quashed, and the Assessing Authority was directed to proceed in accordance with the law.
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