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Issues:
1. Validity of the notice issued under section 148 of the Income Tax Act, 1961. 2. Determination of the assessment order for the assessment year 1959-60. 3. Jurisdiction of the Income Tax Officer to reopen the assessment under section 147. 4. Validity of the subsequent assessment made by the Income Tax Officer. Analysis: 1. Validity of the Notice under Section 148: The Income Tax Officer (ITO) issued a notice under section 148 of the Income Tax Act, 1961, to reopen the assessment for the assessment year 1959-60. The assessee contended that since the original return was pending, the notice under section 148 was invalid. The Assessing Officer had initially assessed the total loss at Rs. 8,851. However, the Appellate Authority found discrepancies in the assessment process, including the lack of a signed computation sheet and a formal assessment order. The Appellate Authority held that the notice under section 148 was invalid due to these irregularities. 2. Determination of Assessment Order: The Tribunal examined the provisions of the Income Tax Act, 1961, and emphasized the requirement for the ITO to pass a written order assessing the total income or loss of the assessee, along with determining the tax payable. It was noted that the computation sheet was not signed by the ITO, and no demand notice was served on the assessee. The Tribunal concluded that the entry in the order sheet could not be considered as an assessment order since there was no determination of income and tax payable. The lack of communication of the assessment to the assessee rendered the assessment invalid. 3. Jurisdiction to Reopen Assessment under Section 147: The Tribunal further deliberated on the jurisdiction of the ITO to reopen the assessment under section 147. It was highlighted that without a valid assessment order in place, the subsequent proceedings initiated under section 147 could not be sustained. The Accountant Member of the Tribunal concurred that the absence of a communicated assessment order rendered the reopening of assessment under section 147 invalid. 4. Validity of Subsequent Assessment: The Tribunal dismissed the departmental appeal, emphasizing that the entry made in the order sheet on 31st October, 1963, was not communicated to the assessee and therefore could not be deemed a valid assessment order. Consequently, the subsequent assessment made by the ITO was deemed invalid due to the lack of a proper assessment order. The Tribunal's decision was upheld by the High Court, ruling in favor of the assessee and declaring the assessment proceedings as null and void. In conclusion, the High Court held that the entry in the order sheet on 31st October, 1963, assessing the loss at Rs. 8,851 could not be treated as an assessment order. The Court also affirmed that the proceedings initiated under section 147 were illegal, and the consequent assessment made by the ITO was deemed invalid. The judgment highlighted the importance of adhering to procedural requirements and ensuring proper communication of assessment orders to maintain the validity of assessment proceedings.
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