Mandatory notice under section 143(2) in reassessment proceedings held essential; omission vitiated the reassessment.

In reassessment proceedings, once a return is filed in response to notice under section 148, issuance of notice under section 143(2) is mandatory before framing the reassessment order. Applying the principle in Hotel Blue Moon and an earlier decision on identical facts, the HC held that omission of such notice vitiates the reassessment. The reassessment was therefore unsustainable, and the Tribunal's order setting it aside was upheld.

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Issues: Whether, in reassessment proceedings initiated under section 148, a notice under section 143(2) of the Income-tax Act, 1961 was before framing the reassessment order.

Analysis: The assessee had filed the return in response to the notice under section 148, though belatedly. The Tribunal had set aside the reassessment by relying on the principle that, where a return is filed in response to a reassessment notice, the requirement of issuing notice under section 143(2) remains mandatory. The Court followed the earlier decision in an identical fact situation and applied the principle laid down in Hotel Blue Moon to hold that the reassessment could not be sustained without such notice.

Conclusion: The issue was answered in favour of the assessee and against the Revenue; the reassessment was held unsustainable for want of notice under section 143(2).

Final Conclusion: The appeal failed and the Tribunal's order setting aside the reassessment was upheld.

Ratio Decidendi: In reassessment proceedings, once a return is filed in response to notice under section 148, issuance of notice under section 143(2) is mandatory, and omission to do so vitiates the assessment.

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