1994 (3) TMI 161 - AT - Income Tax

Summary

Issues:
1. Validity of assessment under section 147(a) due to the obligation to file a return of income under section 139(1A) of the IT Act.
2. Validity of notice issued under section 148 for assessment year 1983-84.

Analysis:
Issue 1: The appeal by the Revenue challenged the cancellation of assessment by the Deputy Commissioner (Appeals) based on the contention that the assessee had no obligation to file a return of income under section 139(1A) of the IT Act. The Income-tax Officer completed the assessment ex parte at Rs. 81,962, which was not disputed. The DC (Appeals) relied on a previous decision involving another ex-Minister to cancel the assessment. However, the Tribunal held that the obligation to file a return is based on assessable income, not the opinion of the assessee. Therefore, the cancellation of assessment was deemed improper as the income determined by the ITO was not in accordance with law.

Issue 2: The assessee's counsel argued that the notice under section 148 was vague and invalid as it did not specify the assessment year for which it was issued. The departmental representative contended that the notice was understood by the assessee to be for the relevant assessment year and that the mention of the assessment year in another notice validated it. However, the Tribunal held that the notice under section 148 must be clear and specific, independent of other notices. Citing various court decisions, including the Supreme Court and High Courts, the Tribunal concluded that a vague notice is invalid and cannot be cured by subsequent actions. Therefore, the Tribunal upheld the DC (Appeals) decision to cancel the assessment based on the invalid notice issued by the ITO.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the cancellation of the assessment on the grounds of both the lack of obligation to file a return under section 139(1A) and the invalidity of the notice issued under section 148.