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2012 (10) TMI 798 - HC - Income TaxReopening of assessment - Held that - As decided in CIT Versus M. Chellappan And Another 2004 (11) TMI 17 - MADRAS HIGH COURT completion of the assessment proceedings under Section 143(3) read with 147 without issue of notice under Section 143(2) was bad in law. When there was failure on the part of the Revenue from complying with the procedure laid down under Section 143(2), the assessment had to fail. The facts of this case are no different from the case already discussed above as there was no notice issued under Section 143(2) no hesitation in confirming the order of the Tribunal cancelling the assessment - in favour of assessee.
Issues:
1. Jurisdictional aspect of not issuing notice under Section 143(2) of the Act. 2. Merits of the reassessment. Jurisdictional Aspect - Notice under Section 143(2) of the Act: The case involved two Tax Case (Appeals) concerning the jurisdictional aspect of not issuing a notice under Section 143(2) of the Act and the merits of reassessment for the assessment year 1994-95. The first appeal, T.C. (A). No. 1183 of 2006, focused on the jurisdictional aspect of not issuing a notice under Section 143(2) of the Act. It was observed that a notice under Section 148 of the Act was issued on 17.3.1997, followed by a notice under Section 142 of the Act on 26.11.1997. The assessee had filed letters requesting to treat the previously filed return as the correct one. However, the Assessing Officer proceeded with the assessment without issuing a notice under Section 143(2) of the Act. The Commissioner of Income Tax (Appeals) upheld the reopening of the assessment under Section 147, but the Tribunal, citing precedents, held that completion of assessment without issuing a notice under Section 143(2) was invalid. The Tribunal canceled the assessment, deciding in favor of the assessee. Merits of the Reassessment: The second appeal, T.C. (A). No. 1186 of 2006, dealt with the merits of the reassessment. The Tribunal dismissed the Revenue's appeal on the merits of the assessment, as the Assessing Officer had failed to issue a notice under Section 143(2) of the Act before completing the assessment. The Tribunal's decision was based on the mandatory nature of complying with the procedure laid down under sections 142 and 143(2) of the Act, as established in previous court decisions. The Court affirmed the Tribunal's decision, emphasizing that failure to comply with the procedure under Section 143(2) rendered the assessment invalid. Consequently, both appeals were dismissed without delving into the merits of the assessment, as the jurisdictional issue was decided in favor of the assessee. In conclusion, the High Court of Madras, in the judgment delivered by Mrs. CHITRA VENKATARAMAN and Mr. K. RAVICHANDRABAABU JJ., upheld the Tribunal's decision that completing the assessment without issuing a notice under Section 143(2) of the Act was invalid. The Court emphasized the mandatory nature of complying with procedural requirements and dismissed both appeals, affirming the cancellation of the assessment due to the jurisdictional issue.
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