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2012 (6) TMI 180 - AT - Income TaxReassessment u/s 147/148 read with section 143(3) - Held that - all the provisions of the income-tax that is applicable to the regular assessments that is subsequent to section 139 including that laid down by 144 has to be followed. - It has not been followed and this is clear violation of the mandatory requirement. - Violation of mandatory requirement cannot be cured by taking the shelter u/s.292B There was a return in response to notice u/s.148 before the Assessing Officer and the Assessing Officer also had acted upon such return, it is crystal-clear legal position that the Assessing Officer ought to have issued notice u/s. 143(2) before passing the order u/s. 143(3) r.w.s. 147.
Issues Involved:
1. Validity of assessment under section 143(3) read with section 147 without issuance of notice under section 143(2). Detailed Analysis: Issue 1: Validity of Assessment under Section 143(3) read with Section 147 without Issuance of Notice under Section 143(2) Facts and Procedural Background: - The assessee filed a return of income for the assessment year 2000-01 on 31-10-2000. - The return was processed under section 143(1) on 19-1-2001. - A notice under section 148 was issued on 7-4-2006, and the assessee filed a return on 22-5-2006. - The initial reassessment proceedings were dropped due to the lack of approval from the Joint Commissioner of Income-tax as required under section 151(2). - A fresh notice under section 148 was issued on 4-12-2006 after obtaining the necessary approval on 30-11-2006. - The assessee filed a copy of the original return along with statements of account on 15-10-2007. - The assessment was completed under section 143(3) read with section 147 on 28-12-2007 without issuing a notice under section 143(2). Assessee's Argument: - The assessee contended that the assessment was invalid due to the failure to issue a notice under section 143(2), which is mandatory for completing the assessment under section 143(3) read with section 147. - The assessee relied on the Supreme Court decisions in R. Dalmia v. CIT and ACIT v. Hotel Blue Moon, which emphasized the necessity of issuing a notice under section 143(2) for valid assessments under section 143(3). Revenue's Argument: - The Revenue argued that the omission to issue a notice under section 143(2) was a procedural irregularity curable under section 292B. - It was also contended that the assessee participated in the proceedings, and the assessment should not be invalidated due to such technical lapses. Tribunal's Decision: - The Tribunal noted that the issuance of a notice under section 143(2) is a mandatory requirement for completing the assessment under section 143(3) read with section 147. - The Tribunal observed that the failure to issue a notice under section 143(2) could not be cured under section 292B as it is a jurisdictional defect. - The Tribunal relied on the Supreme Court decisions in R. Dalmia v. CIT and ACIT v. Hotel Blue Moon to conclude that the assessment was non est in law due to the non-issuance of the mandatory notice under section 143(2). Dissenting Opinion: - The dissenting member argued that the assessment could be considered valid under section 144 as the assessee did not file a return in response to the notice under section 148 within the stipulated time. - It was contended that the assessment was validly made under section 144 read with section 147, and the mention of section 143(3) in the assessment order was a technical error curable under section 292B. Third Member's Decision: - The Third Member concurred with the Judicial Member, emphasizing that the Assessing Officer acted on the copy of the original return filed by the assessee. - It was concluded that there was a return before the Assessing Officer in response to the notice under section 148, and the Assessing Officer was duty-bound to issue a notice under section 143(2). - The Third Member held that the assessment was invalid due to the non-issuance of the notice under section 143(2). Final Outcome: - The majority view held that the assessment was without jurisdiction and a nullity due to the non-issuance of the mandatory notice under section 143(2). - The assessee's appeal was allowed, and the assessment was set aside. Conclusion: The Tribunal concluded that the assessment completed under section 143(3) read with section 147 without issuing a notice under section 143(2) was invalid and non est in law. The failure to issue the mandatory notice under section 143(2) could not be cured under section 292B, rendering the assessment a nullity. The assessee's appeal was allowed on this technical ground.
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