2013 (11) TMI 1046 - HC - Income Tax

Reassessment u/s 143(3)/147 Held that - The return was furnished on 1st May, 2000. The notice under section 143(2) of the act was served upon the assessee after twelve months from the date of filing of the return but before the expiry of the time limit for making the assessment/ reassessment as provided under section 153(2) The time limit for making reassessment was upto 31st March, 2002 - Notice u/s 143(2) of the act having been served before 31st March, 2002 and reassessment having been made before that date - In view of the newly inserted proviso to sub-section (1) of Section 148 of the Act, w.e.f. 1.10.1991, the notice issued under section 143(2) is a valid notice Decided in favour of Revenue.

Summary

Issues:
1. Validity of reassessment order under Section 143(3)/147 within two years of notice service
2. Justification of confirming order annulling reassessment due to absence of notice under Section 143(2)
3. Upholding order annulling reassessment ignoring previous legal precedents
4. Setting aside assessments due to absence of notice under Section 143(2)

Issue 1:
The appeal challenges the validity of a reassessment order under Section 143(3)/147 within two years of notice service. The Tribunal declared the assessment illegal for want of jurisdiction, as notice under Section 143(2) was not served within 12 months from the end of the month in which the return was furnished. The Tribunal's decision was based on the lack of jurisdiction by the assessing officer due to the absence of a timely served notice under Section 143(2).

Issue 2:
The second issue questions the justification of confirming the order annulling the reassessment due to the absence of a notice under Section 143(2). The Tribunal held that without the timely service of the notice, the assessing officer lacked jurisdiction to proceed with the assessment proceedings. This led to the assessment being declared illegal and bad in law, warranting its quashing.

Issue 3:
The third issue involves upholding the order annulling reassessment, disregarding previous legal precedents set by the Hon'ble Supreme Court and the jurisdictional High Court. The Tribunal's decision to annul the reassessment orders for assessment years 1989-90 to 1991-92 was based on the absence of a notice under Section 143(2), despite legal precedents cited by the appellant.

Issue 4:
The final issue revolves around setting aside assessments due to the absence of a notice under Section 143(2) prior to reassessment. The appellant argued that assessments should have been set aside instead of being annulled, citing legal precedents from the Gujrat High Court. However, the High Court determined that the notice under Section 143(2) was served before the time limit for reassessment, deeming it valid under the newly inserted proviso to Section 148(1) of the Act.

In conclusion, the High Court set aside the Tribunal's order and restored the appeal to be decided in accordance with the law. The decision was based on the interpretation of the newly inserted proviso to Section 148(1) of the Act, which deemed the notice under Section 143(2) valid despite being served after 12 months from the filing of the return but before the reassessment time limit.