Assessing officer lacks jurisdiction under Income Tax Act; reassessment proceedings stayed for 2011-12.

The High Court held that the assessing officer lacked jurisdiction to make the assessment under Section 143(3) of the Income Tax Act due to the failure to issue the necessary notice under Section 143(2). Regarding the validity of reassessment proceedings under Section 148, the Court found that the necessary material facts were disclosed in the original return, leading to a stay on further reassessment proceedings for the assessment year 2011-12.

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Issues:
1. Jurisdiction of assessing officer under Section 143(3) of the Income Tax Act.
2. Validity of reassessment proceedings under Section 148 of the Act.

Analysis:

Issue 1: Jurisdiction of assessing officer under Section 143(3) of the Income Tax Act:
The petitioner filed a return for the assessment year 2011-12, claiming exemption from income tax. However, the assessing officer made an assessment order under Section 143(3) of the Income Tax Act without issuing a notice under Section 143(2) of the Act, which is a mandatory requirement before making an assessment. The Tribunal allowed the petitioner's appeal, and the High Court affirmed the Tribunal's decision, holding that the assessing officer lacked jurisdiction to make the assessment under Section 143(3) due to the failure to issue the necessary notice.

Issue 2: Validity of reassessment proceedings under Section 148 of the Act:
Subsequently, the Department issued a notice under Section 148 of the Act for re-assessment of income for the same assessment year, alleging that the petitioner had not fully disclosed all material facts necessary for the assessment. The petitioner contested the reassessment, claiming that all required information had been disclosed during the original filing. The Court noted that the proviso to Section 147 mandates that if reassessment is initiated after four years, it must be based on the assessee's failure to disclose material facts. In this case, the Court found that the necessary material was indeed disclosed in the original return filed by the petitioner.

In conclusion, the Court directed the Income Tax Department's counsel to submit a counter affidavit, and the petitioner's counsel to file a rejoinder affidavit. The matter was listed for admission and final disposal on a specified date, and the Court ordered a stay on further reassessment proceedings for the assessment year 2011-12 under Section 148 of the Income Tax Act.

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