1992 (9) TMI 55 - HC - Income Tax

Summary

Issues involved:
The judgment addresses the questions related to the assessment year 1969-70 under section 256(1) of the Income-tax Act, 1961. The issues are:
1. Interpretation of the provisions of section 144B as procedural in nature and the impact of non-compliance on the assessment order.
2. Validity of the Appellate Assistant Commissioner's decision to set aside the assessment order and direct a fresh assessment due to non-compliance with section 144B.

Issue 1:
The assessee contended that non-compliance with section 144B rendered the assessment order a nullity. The Appellate Assistant Commissioner found the provisions of section 144B were omitted by the assessing authority but considered it a procedural irregularity, not affecting the validity of the assessment order. The Appellate Tribunal upheld this view, stating that section 144B is procedural and non-compliance does not make the assessment order void. The court held that section 144B sets out a special procedure to prevent arbitrary assessments, and non-compliance does not affect the jurisdiction of the assessing authority. The court cited precedents to support the view that procedural irregularities are curable, unlike jurisdictional lapses.

Issue 2:
The Appellate Assistant Commissioner's decision to send the case back to the assessing authority for a fresh assessment was challenged by the assessee. The Appellate Tribunal affirmed this decision, emphasizing that section 144B is procedural and does not confer jurisdiction on the assessing authority. The court agreed with the Tribunal, stating that the procedure under section 144B is mandatory but non-compliance does not render the assessment order void. The court distinguished a procedural irregularity from a jurisdictional lapse, highlighting that the assessing authority had the jurisdiction to make the assessment despite not following the specific procedure outlined in section 144B.

Conclusion:
The court answered both questions in favor of the Revenue and against the assessee, affirming that non-compliance with section 144B does not invalidate the assessment order. The judgment clarified that while the procedure under section 144B is mandatory, its non-compliance does not render the assessment void. The court emphasized the distinction between procedural irregularities and jurisdictional lapses, supporting the view that procedural irregularities are curable.