2012 (9) TMI 504

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....rs, had filed its return for the impugned assessment year on 31.10.2002, declaring a loss of Rs. 80,720/-. This was processed under Section 143(1) of the Act on 1.7.2003. Thereafter, a notice under Section 148 of the Act was issued to the assessee on 28.2.2007 proposing a re-assessment for a reason that overdraft write-backs on settlement with Indian Bank, was omitted to be considered as a part of the income. Pursuant to such notice, assessee filed a return on 19.12.2007. Assessing Officer was of the opinion that the return filed pursuant to notice under Section 148 of the Act was belated since it was beyond the period mentioned in the said notice. He, therefore, proceeded to complete the assessment on best-of-judgment basis under Section 1....

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....t in the case of Asstt. CIT v. Hotel Blue Moon [2010] 321 ITR 362/188 Taxman 113 (SC) had held that omission to issue notice under Section 143(2) was not procedural and was not curable. As per the CIT(Appeals), the said requirement could not be dispensed with. CIT(Appeals) also referred to a judgment of Hon'ble jurisdictional High Court in the case of CIT v. M. Chellappan [2006] 281 ITR 444 (Mad.) in which it was held that when notice under Section 143(2) was not served on the assessee within stipulated period of twelve months, proceedings under Section 143 of the Act came to an end and it became final. He thus held the re-assessment not valid. 5. Now before us, learned D.R., strongly assailing the order of CIT(Appeals), submitted that q....

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....the Assessing Officer from complying with the requirement of Section 143(2) of the Act. 7. We have perused the orders and heard the rival submissions. Undisputed facts are that assessee had filed return of income originally for impugned assessment year within the time allowed under the Act, viz. 31.10.2002 and such return was processed under Section 143(1) of the Act. It is also not disputed that notice dated 28.2.2007 was issued under Section 148 of the Act for reopening the assessment. Assessee had filed the return only on 19.12.2007 and such return was beyond the time period mentioned in the notice. Assessing Officer had, for this reason, considered this return as information on record and proceeded to complete the assessment on best ....

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.... with the terms of notice issued under Section 142(1) of the Act. Here it is to be noted that a notice under Section 142(1) was also not issued, and this position has not been disputed by the Assessing Officer in his remand report to CIT(Appeals). So, none of the three conditions which, would have given the Assessing Officer power to make a best judgment assessment, was satisfied. Further, the assessee had filed a return pursuant to the notice under Section 148 of the Act though beyond the period mentioned in the said notice, and this was done before the date of assessment. Assessment was completed on 27.12.2007 and return pursuant to notice under Section 148 of the Act was filed by the assessee on 19.12.2007. We are of the opinion that Ass....