2018 (10) TMI 614 - HC - Income Tax

Re-opening of the assessment u/s 147 - failure to provide reason to belief despite written request - failure to issue notice u/s 143(2) - Held that - t by taking note of the insertion of the new proviso with retrospective effect and noticing the law laid down in the case of C.Pananappan 2011 (3) TMI 589 - MADRAS HIGH COURT , the Substantial Question of Law has to be answered in favour of the Revenue and against the assessee. However, as inspite of request made by the deceased assessee, the reasons were not furnished. Therefore, at this distant point of time, we feel it will be inappropriate and inequitable to remand the matter to the Assessing Officer with a direction to furnish the reasons and to proceed in accordance with law. Assessment proceedings quashed on the ground of non-furnishing of reasons for re-opening of assessment and also taking note of the monetary limit involved in this appeal, which is less than ₹ 2 lakhs. - Decided against the revenue.

Summary

Issues:
Validity of re-assessment/re-opening proceedings under Section 147 without issuing notice under Section 143(2) within 12 months.

Issue 1: Validity of re-assessment proceedings under Section 147 without issuing notice under Section 143(2) within 12 months

The High Court considered the appeal challenging the order of the Income Tax Appellate Tribunal regarding the validity of re-assessment proceedings under Section 147 of the Income Tax Act, 1961. The substantial question of law was whether the re-opening of assessment under Section 147 without issuing notice under Section 143(2) within 12 months is valid. The Court proceeded with the case as the respondent/assessee was deceased, and despite notices to legal heirs, none appeared. The legal issue centered on the validity of re-assessment without the issuance of notice under Section 143(2) within the stipulated 12 months. The Court referred to a similar case and analyzed the relevant provisions of the Act, emphasizing the importance of timely notices for assessment procedures. The judgment highlighted the significance of the proviso to Section 148 and its impact on the limitation period for issuing notices under Section 143(2) in cases of re-assessment. The Court concluded that the re-assessment proceedings were invalid due to non-furnishing of reasons for re-opening the assessment, despite the legal position favoring the Revenue. The appeal was partly allowed, answering the substantial question of law in favor of the Revenue but quashing the re-assessment proceedings due to non-compliance with reason furnishing requirements and the monetary limit involved in the case.

This detailed analysis of the judgment provides a comprehensive overview of the legal issues involved, the relevant legal provisions, and the Court's reasoning leading to the decision.