Appeal Allowed: Assessment Nullified for Delayed Notice Issuance

The Tribunal allowed the appeal, declaring the assessment null and void due to the delayed issuance of the notice under section 143(2). It ruled that section 292BB of the Income Tax Act, 1961, cannot be applied retrospectively, emphasizing the significance of complying with procedural requirements and the impact of procedural amendments on pending assessments and appeals.

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Issues:
1. Validity of assessment due to non-issuance of notice under section 143(2) in time.
2. Applicability of section 292BB of the Income Tax Act, 1961.
3. Effect of retrospective application of procedural amendments on pending assessments and appeals.

Issue 1: Validity of assessment due to non-issuance of notice under section 143(2) in time:
The appeal was against the order of the CIT(A)-V, Hyderabad for the block period 1997-98 to 2003-04. The original appeal was filed against the assessment order dated 25.02.2005. The assessee contended that the assessment was void as notice under section 143(2) was issued late. The ITAT remitted the issue to the file of the CIT(A) for fresh adjudication as the failure to issue the notice was considered crucial.

Issue 2: Applicability of section 292BB of the Income Tax Act, 1961:
The CIT(A) held that the notice under section 143(2) was issued beyond the prescribed time limit. The CIT(A) observed that section 292BB of the Act, introduced from 01.04.2008, precludes an assessee from objecting to the late notice issuance if not raised during assessment proceedings. The CIT(A) concluded that section 292BB applies to pending assessments and appeals, including the current case.

Issue 3: Effect of retrospective application of procedural amendments on pending assessments and appeals:
The Managing Partner of the assessee argued that section 292BB should be applied prospectively and cited relevant case laws. The Tribunal held that section 292BB operates prospectively, as decided in the case of Kuber Tobacco Products Pvt. Ltd. vs. DCIT. Referring to the Bombay High Court decision in CIT vs. Mr. Salman Khan, the Tribunal ruled that section 292BB cannot be invoked for the relevant period, making the subsequent scrutiny proceedings null and void.

In conclusion, the Tribunal allowed the appeal, holding the assessment null and void due to the late issuance of the notice under section 143(2) and stating that section 292BB cannot be applied retrospectively. The judgment emphasized the importance of adhering to procedural requirements and the implications of procedural amendments on pending assessments and appeals.

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