1991 (9) TMI 24 - HC - Income Tax

Validity of Second Notice Upheld After Earlier Notice Deemed Jurisdictionally Deficient

The court held that the second notice under section 147 was valid, as the earlier notice under section 148 was deemed without jurisdiction. The Tribunal's ... Notice, Reassessment Issues involved: Validity of notice under section 147 of the Income-tax Act, 1961 for the assessment year 1982-83.Summary:The petitioner, a partnership firm, received a notice under section 148 of the Income-tax Act, 1961 for the assessment year 1982-83. Subsequently, an assessment order was passed by the assessing authority. Upon appeal, the first appellate authority remanded the case back to the assessing authority. The petitioner then appealed to the Income-tax Appellate Tribunal, arguing that the initiation of proceedings under section 148 was without jurisdiction. The Tribunal allowed the appeal, stating that the notice served was illegal as the reasons were not on record. The Commissioner of Income-tax's reference application was rejected, and the legal position declared by the Tribunal prevailed. Another notice under section 147 was issued for the same assessment year, addressing the earlier defect. The petitioner challenged this notice in a writ petition.The petitioner contended that the second notice under section 147 was not sustainable due to the existence of the first notice under section 148. However, the court disagreed, stating that the Tribunal's final order rendered the first notice without jurisdiction. Referring to a Division Bench decision, the court clarified that since the Tribunal found the initial proceedings under section 147 to be without jurisdiction, they were not considered pending. The court noted that the second notice was served after the first proceedings were declared without jurisdiction, making the earlier proceedings non-subsisting. Ultimately, the writ petition was dismissed with costs.