2000 (10) TMI 174 - AT - Income Tax

Tax assessments invalidated for late notice; other challenges not addressed.

The Tribunal quashed the assessments made by the AO as the statutory notice under s. 143(2) was not issued within the prescribed time-limit, rendering the ... - Issues Involved:1. Validity of the assessment framed by the AO under s. 158BC r/w s. 143(3) due to issuance of notice under s. 143(2) beyond the prescribed time-limit.2. Various additions made by the AO on account of undisclosed investments, jewellery, valuable items, and interest not accounted for.3. Rebate under s. 88 of the Act.4. Initiation of penalty proceedings under s. 158BFA(2)/158BFA(3).Summary:1. Validity of the Assessment:The assessees contended that the AO erred in making block assessments without jurisdiction due to the issuance of notice under s. 143(2) beyond the prescribed time-limit of one year provided in the proviso to s. 143(2). They argued that the assessments framed under s. 158BC r/w s. 143(3) are invalid and without jurisdiction. The CIT(A) dismissed this ground, but the Tribunal held that the assessments made by the AO were barred by limitation as the statutory notice under s. 143(2) was not issued within the prescribed period. Consequently, the assessments were quashed.2. Additions Made by the AO:The assessees challenged various additions made by the AO on account of undisclosed investments in jewellery, valuable items found during the search, and interest not accounted for. The CIT(A) allowed partial relief but sustained several additions. The Tribunal did not adjudicate on these grounds as the assessments were quashed on the legal ground of being time-barred.3. Rebate under s. 88 of the Act:The assessees contended that the CIT(A) erred in not allowing the rebate under s. 88 of the Act. This issue was not adjudicated by the Tribunal due to the quashing of the assessments on the primary legal ground.4. Initiation of Penalty Proceedings:The assessees argued that the initiation of penalty proceedings under s. 158BFA(2)/158BFA(3) was erroneous. This issue was also not adjudicated by the Tribunal as the primary ground of the validity of the assessments was decided in favor of the assessees.Conclusion:The Tribunal quashed the assessments framed by the AO in all three cases due to the failure to issue the statutory notice under s. 143(2) within the prescribed time-limit, rendering the assessments without jurisdiction. Consequently, the other grounds raised by the assessees were not adjudicated.