2012 (7) TMI 1163 - AT - Income Tax

Summary

Issues involved:
The legal issues involved in this judgment are related to the validity of reassessment proceedings u/s 147/148 of the Income-tax Act, 1961 without serving notice u/s 143(2) of the Act during the pendency of reassessment proceedings.

Details of the Judgment:

Issue 1: Validity of reassessment proceedings without serving notice u/s 143(2) of the Act
- The assessee raised the legal issue that no notice u/s 143(2) of the Act was served during the reassessment proceedings u/s 147/148 of the Act.
- The Tribunal found that the AO had not issued notice u/s 143(2) of the Act, which was a mandatory requirement for framing the assessment.
- Citing the decision in the case of Sheela Chopra Vs. ITO, the Tribunal held that the absence of notice u/s 143(2) rendered the reassessment proceedings invalid.
- Referring to the decision in ACIT vs Hotel Blue moon, the Tribunal emphasized the mandatory nature of issuing notice u/s 143(2) for framing assessments.
- The Tribunal also highlighted the decision of the Hon'ble Madras High Court in the case of CIT vs C. Palaniappan, which supported the necessity of serving notice u/s 143(2) for reopening assessments u/s 147/148 of the Act.
- Based on the legal precedents and the absence of notice u/s 143(2), the Tribunal quashed the reassessment proceedings as being without jurisdiction.

Conclusion:
- The Tribunal allowed the Cross Objection of the assessee, leading to the dismissal of the revenue's appeal as infructuous.
- Consequently, the reassessment proceedings were quashed due to the absence of notice u/s 143(2) of the Act, and the assessee's Cross Objection was allowed.
- The appeal of the revenue was dismissed, and the order was pronounced in the open court on 31.07.2012.