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2010 (4) TMI 856 - HC - Income TaxService of notice u/s 143(2) - Was the unsigned notice under section 143(2) of the Act deemed to have been served on the assessee because it was posted within the prescribed period, though received by the assessee thereafter? - held that - he notice under section 143(2) which is the foundation for assuming jurisdiction to make an assessment in the case of an assessee under section 143(3), had been assumed by the Assess- ing Officer on the basis of a notice which though issued on November 29, 1996, fixing the date of hearing on December 19, 1996, was in fact sent by the registered post with A. D. and was served on the assessee on Decem- ber 2, 1996, which was not permissible in law. - Decided in favor of assessee.
Issues Involved:
1. Validity of unsigned notice under section 143(2) of the Income-tax Act, 1961. 2. Validity of notice served beyond the prescribed period under section 143(2) of the Income-tax Act, 1961. 3. Waiver of objection by the assessee by participating in the assessment proceedings. Detailed Analysis: 1. Validity of Unsigned Notice Under Section 143(2): The Tribunal held that the notice under section 143(2) was invalid as it was not signed by the Assessing Officer. The Revenue argued that the Tribunal failed to appreciate that the assessee had appeared pursuant to the notice and had not objected to the unsigned notice. The court noted that this issue was not formulated as a substantial question of law at the time of admission of the appeal, nor was it proposed by the Revenue in the memo of appeal. Hence, the court did not delve into the merits of this issue. 2. Validity of Notice Served Beyond the Prescribed Period: The Tribunal found that the notice under section 143(2) was served on the assessee on December 2, 1996, beyond the prescribed period of twelve months from the end of the month in which the return was furnished. The Tribunal held that this delay rendered the notice invalid, and consequently, the assessment framed under section 143(3) was also invalid. The court supported this view by citing the decision in Deputy CIT v. Mahi Valley Hotels and Resorts, which emphasized that the limitation period prescribed in the proviso to section 143(2) is mandatory. The court also referenced the Supreme Court decision in Asst. CIT v. Hotel Blue Moon, which held that the omission to issue notice under section 143(2) within the prescribed period is not a curable procedural irregularity. 3. Waiver of Objection by the Assessee: The Revenue contended that the assessee had waived the right to object to the delay in service by participating in the assessment proceedings. However, the court rejected this argument, reiterating the mandatory nature of the limitation period for serving notice under section 143(2). The court noted that the decision in Madanlal Mathurdas v. Chunilal, ITO, relied upon by the Revenue, was rendered in a different context and did not support the Revenue's case. Similarly, the decision in CIT v. Jai Prakash Singh was distinguished on its facts and found to be irrelevant to the present case. Conclusion: The court concluded that the Tribunal's decision was in line with the Supreme Court and High Court precedents, affirming that the notice under section 143(2) served beyond the prescribed period invalidates the subsequent assessment. The appeals were dismissed, and the question was answered in favor of the assessee and against the Revenue. The court did not address the issue of the unsigned notice as it was not part of the formulated question of law.
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