1989 (2) TMI 44 - HC - Income Tax

Summary

Issues:
1. Competency of the appeal filed by the assessee challenging the assessment framed by the Income-tax Officer under section 144 of the Income-tax Act, 1961.
2. Whether the notice under section 143(2) of the Act was mandatory and if the absence of such notice rendered the assessment framed by the Income-tax Officer invalid.
3. Validity of the assessment framed under section 144 of the Act based on non-compliance with the notice issued under section 142(1) of the Act.

Analysis:

Issue 1:
The court discussed the competency of the appeal filed by the assessee challenging the assessment under section 144 of the Act. Referring to the case law in Gopal Singh v. CIT [1968] 70 ITR 840, the court established that without filing an appeal against the order passed under section 146 of the Act, an appeal against the assessment under section 144 is not maintainable. This principle was crucial in determining the validity of the appeal filed by the assessee.

Issue 2:
The court deliberated on whether the notice under section 143(2) of the Act was mandatory and if the absence of such notice rendered the assessment invalid. The Revenue contended that the notice served under section 142(1) of the Act, which the assessee failed to comply with, justified the framing of the assessment under section 144. The court upheld this argument, emphasizing that non-compliance with the notice under section 142(1) empowered the Income-tax Officer to proceed with the assessment under section 144. Consequently, the court ruled that the absence of notice under section 143(2) did not invalidate the assessment.

Issue 3:
The court addressed the validity of the assessment framed under section 144 based on non-compliance with the notice issued under section 142(1) of the Act. It was established that the Income-tax Officer had jurisdiction to frame the assessment under section 144 due to the assessee's non-compliance with the notice issued under section 142(1). The court concluded that the Tribunal erred in holding the assessment contrary to law. Consequently, the court answered the second question in the negative, favoring the Revenue. As a result, the other questions referred were deemed academic and left unanswered, and the reference was disposed of without costs.