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Court allows appeal, sets aside Tribunal's order, remands for reconsideration under amended tax law The Court allowed the appeal, setting aside the Tribunal's order and remanding the matter for reconsideration in light of the amended provision of section ...
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Court allows appeal, sets aside Tribunal's order, remands for reconsideration under amended tax law
The Court allowed the appeal, setting aside the Tribunal's order and remanding the matter for reconsideration in light of the amended provision of section 148 of the Income-tax Act, 1961. The Court found merit in the revenue's argument that notices issued under section 143(2) are valid if issued before the assessment time-limit, thereby deeming the assessment order invalid due to non-compliance with the notice issuance timeline.
Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal for the assessment year 1995-96.
Issue 1: Validity of notice u/s 143(2)(ii) in case of return filed in compliance with notice u/s 148. The Tribunal held the assessment order invalid due to notice u/s 143(2) not issued within prescribed time. The revenue argued that an amendment in section 148 by the Finance Act, 2006 deems such notices valid if issued before the time-limit for assessment. The Court found merit in the revenue's argument and referred to the amended section 148, remanding the matter to the Tribunal for fresh consideration.
Issue 2: Validity of assessments completed u/s 143(3)/147 without notice u/s 143(3). The Tribunal's decision was based on Nawal Kishor & Sons Jeweller case, stating non-issuance of notice u/s 143(3) is an irregularity, not a nullity. The Court, however, focused on the amended section 148, which deems notices u/s 143(2) valid if issued before assessment time-limit. Consequently, the Court allowed the appeal, setting aside the Tribunal's order and remanding the matter for reconsideration in light of the amended provision.
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