Tribunal allows rectification of non-issuance notice on revised return, remands matter for re-determination.

The Tribunal held that the non-issuance of a notice under section 143(2) on the revised return was an irregularity, not a fatal error, and could be rectified. The assessment order annulled by the CIT(A) was set aside, and the matter was remanded to the Assessing Officer to re-determine taxable income based on the revised return, granting the assessee a hearing opportunity. The Revenue's appeal was allowed for statistical purposes.

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Issues Involved:
1. Validity of the assessment order annulled by the CIT(A) due to non-issuance of notice under section 143(2) on the revised return.
2. Whether the non-issuance of notice under section 143(2) on the revised return is a fatal error or a mere irregularity.

Detailed Analysis:

1. Validity of the assessment order annulled by the CIT(A) due to non-issuance of notice under section 143(2) on the revised return:
The Revenue appealed against the CIT(A)'s decision to annul the assessment order based on the submission that no notice under section 143(2) was issued on the revised return. The CIT(A) found that the revised return was filed within the permissible time under section 139(5), and thus, the assessment should have been based on this revised return. The CIT(A) cited several judicial precedents which support the view that once a revised return is filed, the original return stands effaced, and the assessment must be based on the revised return. The CIT(A) concluded that the failure to issue a notice under section 143(2) on the revised return vitiated the assessment proceedings, rendering the assessment order invalid.

2. Whether the non-issuance of notice under section 143(2) on the revised return is a fatal error or a mere irregularity:
The Tribunal considered whether the non-issuance of a notice under section 143(2) on the revised return was a fatal error or a mere irregularity. The Tribunal noted that section 143(2) requires the Assessing Officer to issue a notice if it is necessary to ensure that the assessee has not understated income or claimed excessive loss. The Tribunal acknowledged that the courts have held that if no notice is issued within the prescribed time, the assessment proceedings would be void ab initio. However, in this case, a valid return was initially filed, and a notice under section 143(2) was issued within the time limit, setting the assessment proceedings into motion.

The Tribunal further observed that section 139(5) allows the assessee to file a revised return before the completion of the assessment. The key issue was whether the non-issuance of a notice under section 143(2) on the revised return rendered the assessment order void. The Tribunal distinguished the present case from the judicial precedents cited by the assessee, noting that none of those cases explicitly required a notice under section 143(2) on the revised return to validate the assessment proceedings. The Tribunal opined that the non-issuance of such a notice was an irregularity, not an illegality, and could have been rectified by the CIT(A) by calling for a remand report from the Assessing Officer.

Conclusion:
The Tribunal concluded that the non-issuance of a notice under section 143(2) on the revised return was an irregularity that could be cured, rather than a fatal error that nullified the assessment proceedings. The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer to re-determine the taxable income based on the revised return, after providing the assessee with an opportunity for a hearing. The appeal of the Revenue was allowed for statistical purposes.

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