2014 (12) TMI 930 - HC - Income Tax

Validity of assessment framed u/s 143(3) - no notice was issued under Section 143 (2) Held that - Following the decision in Harsingar Gutkha P. Ltd. Versus Commissioner of Income-tax 2008 (5) TMI 443 - Allahabad High Court - the service of the notice on the assessee within the period provided under the proviso is mandatory - In the absence of the notice being served within the stipulated period under section 143 (2) of the Act, the assessment proceeding comes to an end and is deemed to have become final since the assessment order was void ab initio, further dealing with the question of law as framed by the appellant does not arise for consideration - the order of the Tribunal is upheld Decided against revenue.

Summary

Issues involved:
Validity of assessment order under Section 143(3) of the Income Tax Act based on the issuance of notice under Section 143(2) - Applicability of previous court decisions - Additional substantial questions of law raised by the appellant.

Analysis:

The High Court examined the validity of an assessment order under Section 143(3) of the Income Tax Act based on the issuance of a notice under Section 143(2). The appellant contended that a notice was issued by speed post, but the court found that it was for penalty, not under Section 143(2). The court held that since no valid notice under Section 143(2) was issued, the assessment order under Section 143(3) could not have been passed. The Tribunal's decision to quash the assessment proceedings was deemed justified due to the absence of a valid notice to the assessee.

In a previous case, Harsingar Gutkha (P.) Ltd. v. Commissioner of Income-tax, the court emphasized the mandatory nature of serving the notice within the stipulated period under Section 143(2). Failure to do so results in the assessment proceedings ending and being deemed final. The court cited various decisions to support this interpretation, reinforcing the importance of timely notice service for assessment validity. The court applied this precedent to the present case, ruling against the appellant and in favor of the assessee.

The appellant sought consideration of three additional substantial questions of law, but the court determined that since the assessment order was void ab initio, further examination of the framed questions was unnecessary. Consequently, the appeal was dismissed based on the assessment's invalidity from the lack of a proper notice under Section 143(2).