1991 (6) TMI 98 - AT - Income Tax

Summary

Issues:
Validity of notice under section 139(2) for assessment year 1984-85.

Analysis:
The appeal pertains to the validity of the assessment order for the assessment year 1984-85, specifically focusing on the issue of whether the notice under section 139(2) was issued within the statutory period. The Commissioner of Income-tax(Appeals) annulled the entire assessment as ab initio void due to the notice being issued beyond the assessment year in question. The assessing authority determined the total income of the assessee at Rs. 44,500, primarily constituted of capital gains. The ld. CIT(A) held that the notice under section 139(2) issued on 4-7-1985 was beyond the relevant assessment year, rendering the assessment illegal. The Revenue challenged this decision.

Upon careful consideration, the Tribunal examined the legal provisions under section 139(2) of the Income-tax Act, which mandates the issuance of notice within the relevant assessment year. The notice in question was issued on 4-7-1985 for the assessment year 1984-85, falling outside the prescribed period. The Tribunal emphasized that no assessment can be made on an individual who fails to file a return under sub-section (1) without the service of an individual notice under sub-section (2). As the notice in this case was beyond the statutory period and no provisions under sections 147 and 148 were invoked, the assessment proceedings were deemed void ab initio. The Tribunal upheld the decision of the ld. CIT(A) that the assessment order was not in accordance with the law and rightly annulled it.

The Tribunal rejected the Revenue's arguments regarding the timeliness of notice service and the treatment of the return under section 139(4). It emphasized the importance of adhering to statutory timelines and procedures in conducting assessments. The Tribunal referenced the legal precedent set by the Hon'ble Supreme Court in emphasizing the proper discharge of duties by tax authorities. Ultimately, the Tribunal dismissed the appeal of the Revenue, affirming the decision to annul the assessment due to the jurisdictional issue with the notice under section 139(2) for the assessment year in question.