Timely notice under section 143(2) is mandatory; a delayed notice vitiates block assessment proceedings.

A notice under section 143(2) issued beyond the then applicable one-year limitation was held to be invalid in block assessment proceedings. The return had been filed on 04.05.1999, but the notice was issued on 09.08.2002, well after the prescribed period. Applying Hotel Blue Moon, the text states that service of notice within the statutory time was mandatory and that failure to do so was not a curable procedural irregularity. The assessment proceedings initiated on the basis of the belated notice were therefore vitiated.

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Issues: Whether the notice issued under section 143(2) of the Income-tax Act, 1961 was beyond the prescribed limitation period and, if so, whether the assessment proceedings stood vitiated.

Analysis: The return had been filed on 04.05.1999, while the notice under section 143(2) was issued on 09.08.2002. On the facts of the block assessment proceedings, the notice was clearly beyond the then applicable one-year period prescribed by the proviso to section 143(2). The rule stated in Hotel Blue Moon was applied to hold that issuance of notice within the prescribed time was mandatory and that omission or delay in issuing such notice was not a curable procedural irregularity.

Conclusion: The notice under section 143(2) was time-barred and the proceedings initiated pursuant to it were vitiated.

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