2011 (5) TMI 1036

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....egal and without jurisdiction, the assessment based on such notice was illegal and requires to be cancelled. 2. In view of the above and others that may be urged at the time of hearing, appellant prays that notice issued on 30.09.08 being bad and illegal, the assessment based on such notice be cancelled." 2. During the appellate proceedings, additional ground:- notice u/s 143(2) of the IT Act issued and served on 30-09-2008 in respect of return of income filed on 4-7-2007, being invalid was also taken. The assessee's contention is that the proviso to section 143(2) (ii) of the IT Act as amended w. e. f. 1-4-2008, as per which period for issue of notice u/s 143(2) of the IT Act was made six months from the end of the financia....

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....-08 on 4.7.2007 would be governed as substituted by Finance Act, 2008, w.e.f. 1.4.2008 or stood before that. The matter is amply clarified in pare Circular No. 1 of 2009 dated 27.3.2009 reproducing Explanatory notes on provisions relating to Direct Taxes in Finance Act, 2008 as under:- "42.8. Similarly the amended provision of sub- section (2) of section 143 shall apply to all such returns (irrespective of the assessment year to which the returns pertain) where notice under sub- section (2) of section 143 can still be issued on 1st April, 2008 under the pre-amended provision. 42.9. For example, assessee "A" files his tax return on 31st March 2007, assesses "B" files his tax return on 15th April, 2007 and assessee "C" files....

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.... 292BB. The decision in the case of Kuber Tobacco Products Pvt. Ltd. cannot therefore, be applied for interpreting applicability of Proviso below section 143(2)(ii). In any case, the position is amply clarified in the Explanatory notes to the Finance Act, 2008 issued by the Finance Ministry. In view of this, this ground of appeal is dismissed." 4. The learned Counsel for the assessee reiterated the submissions made before the learned CIT(A) and relied upon the decision of the Hon'ble Gujarat High Court in the case of DCIT Vs Maxima System Ltd. 40 DTR 49. On the other hand, the learned DR relied upon the order of the learned CIT(A). 5. We have considered the rival submissions. It is not in dispute that the assessee filed return of ....

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....) having been served beyond the statutory period of 12 months, the Tribunal was correct in holding that the assessment was invalid." 7. Considering the facts of the case in the light of the relevant provision of proviso to section 143(2) of the IT Act in the light of the decision of the Hon'ble Gujarat High Court in the case of Maxima Systems Ltd. (supra) we are of the view that as per proviso to section 143(2) of the IT Act, no notice u/s 143(2) can be served upon the assessee after expiry of 12 months from the end of the month in which the return is furnished. From the language used in the proviso, it is clear that jurisdiction to frame assessment u/s 143 (3) of the IT Act pursuant to notice u/s 143(2) IT Act can be assumed only if....