2009 (6) TMI 20 - HC - Income Tax

Assessment under section 143 Issuance of notice after expiry of 12 months - the returns were all filed on 23.03.1998 17.03.1998 and 23.03.1998 for the assessment year 1997-98 whereas the notice under Section 143 (2) came to be issued on 17.08.1999 in respect of all the three returns Held that having regard to the specific stipulation in Section 143 (2) of the Act that the issuance of the notice under the said Section should be made within 12 months from the end of the month in which the return of income was filed it was legally obligated upon the appellant to have issued the said notice on or before 31.03.1999. The Tribunal s conclusion of having annulled the order of assessment on that score being valid in law the same cannot be found fault with. The question of law is answered against the appellant.

Summary

Issues involved:
- Interpretation of Section 143(2) of the Income Tax Act, 1961 regarding the timeline for issuing notices for assessment.

Detailed Analysis:

The judgment delivered by F. M. Ibrahim Kalifulla, J. addressed the common question of law regarding the issuance of notices under Section 143(2) of the Income Tax Act, 1961. The main issue was whether the Tribunal was correct in annulling the assessment due to the notice being issued after the statutory timeline. The returns for the assessment year 1997-98 were filed on 23.03.1998, but the notice under Section 143(2) was issued on 17.08.1999, which was beyond the stipulated time frame. The Court emphasized the specific provision in Section 143(2) which required the notice to be issued within 12 months from the end of the month in which the return was filed, i.e., by 31.03.1999. Despite attempts by the assessment officer to justify the delay, the Court held that such explanations were not acceptable. The Commissioner (Appeals) had disregarded this statutory discrepancy, leading the respondent to approach the Tribunal for relief. The Tribunal correctly intervened, noting that the appellant was legally obligated to issue the notice within the prescribed timeline. Consequently, the Tribunal's decision to annul the assessment was deemed valid in law, and the appeals were dismissed as a result.

In conclusion, the High Court of Madras, through the judgment delivered by F. M. Ibrahim Kalifulla, J., clarified the importance of adhering to the timeline set out in Section 143(2) of the Income Tax Act, 1961 for issuing notices for assessment. The Court highlighted that any delay in issuing such notices beyond the statutory limit could render the assessment null and void. The decision reinforced the legal obligation of the appellant to comply with the prescribed timelines, ultimately upholding the Tribunal's ruling in favor of the respondent. The judgment serves as a reminder of the significance of procedural requirements in tax assessments and underscores the consequences of non-compliance with statutory provisions.