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Issues: Jurisdiction of Income-tax Officer to issue notice under section 148, validity of assessment under section 143(3), applicability of section 292B.
Analysis: The case involves a question of law referred by the Income-tax Appellate Tribunal regarding the jurisdiction of the Income-tax Officer to issue a notice under section 148 and the validity of the assessment under section 143(3) for the assessment year 1977-78. The key issue is whether the assessment made by the Income-tax Officer was valid under section 143(3) based on the return filed by the assessee or if the notice under section 148 was superfluous. The Tribunal observed that the assessment order clearly indicated it was passed under section 143(3) read with section 148, and the provisions of section 292B could not protect the illegalities committed by the Income-tax Officer. The Tribunal concluded that since the proceedings were initiated under section 148, the assessment had to be quashed, disagreeing with the Appellate Assistant Commissioner's reasoning. The Appellate Assistant Commissioner had held that the Income-tax Officer had the jurisdiction to issue a notice under section 148, but the Tribunal disagreed, stating that the notice under section 148 was wrongly issued and subsequently corrected by a notice under section 143(2) which led to the final assessment under section 143(3). The Tribunal emphasized that the correct notice under section 143(2) superseded the earlier notice under section 148, rendering the assessment under section 148 invalid. The Tribunal's decision was based on the fact that no return was submitted after the notice under section 148, and the assessment was not framed under section 144 due to non-compliance with the notice. The High Court, in its judgment, sided with the Revenue, disagreeing with the Tribunal's conclusion. The Court held that the assessment was indeed framed under section 143(3) and not under section 148. The Court rejected the Tribunal's technical interpretation, stating that the mere mention of section 148 in the assessment order did not shift the assessment basis from section 143(3). The Court emphasized that the notice under section 143(2) following the incorrect notice under section 148 led to the final assessment under section 143(3), and the provisions of section 292B were not applicable in this case. Consequently, the reference was answered in favor of the Revenue, and the assessment under section 143(3) was upheld.
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